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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>/in/edgar/work/0000950130-00-003865/0000950130-00-003865.txt : 20000714
<SEC-HEADER>0000950130-00-003865.hdr.sgml : 20000714
ACCESSION NUMBER:		0000950130-00-003865
CONFORMED SUBMISSION TYPE:	N-14 8C/A
PUBLIC DOCUMENT COUNT:		6
FILED AS OF DATE:		20000713

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			DEBT STRATEGIES FUND II INC
		CENTRAL INDEX KEY:			0001051003
		STANDARD INDUSTRIAL CLASSIFICATION:	 [
]		IRS NUMBER:				223564108
		FISCAL YEAR END:			1231
</COMPANY-DATA>

		FILING VALUES:
			FORM TYPE:		N-14 8C/A
			SEC ACT:		
			SEC FILE NUMBER:	333-37384
			FILM NUMBER:		672347
</FILING-VALUES>

			BUSINESS ADDRESS:	
				STREET 1:		MERRILL LYNCH ASSET MANAGEMENT
				STREET 2:		PO BOX 9011
				CITY:			PRINCETON
				STATE:			NJ
				ZIP:			08543-9011
				BUSINESS PHONE:		6092823087
</BUSINESS-ADDRESS>

				MAIL ADDRESS:	
					STREET 1:		MERRILL LYNCH ASSET MANAGEMENT
					STREET 2:		PO BOX 9011 INFORMATION SYSTEMS SEC 2-B,
					CITY:			PRINCETON
					STATE:			NJ
					ZIP:			08543-9011
</MAIL-ADDRESS>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-14 8C/A
<SEQUENCE>1
<FILENAME>0001.htm
<DESCRIPTION>DEBT STRATEGIES FUND II, INC.
<TEXT>

<HTML>
<HEAD>
 <TITLE>DEBT STRATEGIES FUND II, INC.</TITLE>
</HEAD>
<BODY BGCOLOR="#FFFFFF">
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

 <B>As filed with the Securities and Exchange Commission on July 13,
   2000</B></FONT></DIV>



 <DIV ALIGN="right"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Securities Act
   File No. 333-37384</B></FONT></DIV>

 <DIV ALIGN="right"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Investment Company
   Act File No. 811-08603</B></FONT></DIV>
 <HR SIZE=2 NOSHADE> <HR SIZE=1 NOSHADE> <DIV ALIGN="center"><FONT
 SIZE="5" COLOR="#000000" FACE="'Times New Roman', Times"><B>SECURITIES AND
   EXCHANGE COMMISSION</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>WASHINGTON, D.C.
   20549</B></FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="5" COLOR="#000000" FACE="'Times New Roman', Times"><B>FORM
   N-14</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>REGISTRATION
   STATEMENT UNDER THE SECURITIES ACT OF 1933</B></FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>

 <TABLE ALIGN="center" WIDTH="0" CELLSPACING=0 CELLPADDING=0>
  <TR>
   <TD VALIGN="bottom" WIDTH="356" NOWRAP ALIGN="left"><FONT
   SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>PRE-EFFECTIVE
     AMENDMENT NO. 1&nbsp;&nbsp;</B></FONT><FONT
   SIZE="3" COLOR="#000000" FACE="Wingdings"><B>&#120;</B></FONT><FONT
   SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B></B></FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B>POST-EFFECTIVE
     AMENDMENT NO.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><FONT
   SIZE="3" COLOR="#000000" FACE="Wingdings"><B>&#168;</B></FONT><FONT
   SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"><B></B></FONT></TD>
  </TR>
 </TABLE>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>(Check Appropriate
   Box Or Boxes)</B></FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="6" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt Strategies
   Fund II, Inc.</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>(Exact Name Of
   Registrant As Specified In Its Charter)</B></FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>(609)
   282-2800</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>(Area Code And
   Telephone Number)</B></FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>800 Scudders Mill
   Road</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Plainsboro, New
   Jersey 08536</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>(Address Of
   Principal Executive Offices:</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Number, Street,
   City, State, Zip Code)</B></FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Terry K.
   Glenn</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt Strategies
   Fund II, Inc.</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>800 Scudders Mill
   Road, Plainsboro, New Jersey 08536</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Mailing Address:
   P.O. Box 9011, Princeton, New Jersey 08543-9011</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>(Name And Address
   Of Agent For Service)</B></FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B><I>Copies
   To:</B></I></FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" ALIGN="center" CELLSPACING=0 CELLPADDING=0>
  <TR>
   <TD VALIGN="top" WIDTH="41%" ALIGN="left"> <DIV ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Frank P. Bruno,
     Esq.</B></FONT></DIV>
   <DIV ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Brown &amp; Wood
     <SMALL>LLP</SMALL>
   </B></FONT></DIV>
   <DIV ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>One World Trade
     Center</B></FONT></DIV>
   <DIV ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>New York, NY
     10048-0557</B></FONT></DIV>
   </TD>
   <TD WIDTH="4%"></TD>
   <TD VALIGN="top" ALIGN="center"> <DIV ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Michael J.
     Hennewinkel, Esq.</B></FONT></DIV>


   <DIV ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Merrill Lynch
     Investment Managers, L.P.</B></FONT></DIV>

   <DIV ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>800 Scudders
     Mill Road</B></FONT></DIV>
   <DIV ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Plainsboro, NJ
     08536</B></FONT></DIV>
   </TD>
   <TD WIDTH="1%"></TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B><I>Approximate
   Date Of Proposed Public Offering:&nbsp;&nbsp;&nbsp;&nbsp;</B></I>As soon as
   practicable after the Registration Statement becomes effective under the
   Securities Act of 1933.</FONT></DIV>
 <DIV><FONT
 SIZE="6">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>CALCULATION OF
   REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933</B></FONT></DIV>
 <HR SIZE=1 NOSHADE> <HR SIZE=1 NOSHADE>
 <TABLE ALIGN="center" WIDTH="712" CELLSPACING=0 CELLPADDING=0>
  <TR>
   <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Title of
     Securities Being Registered</B></FONT></TH>
   <TH><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TH>
   <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Amount Being
   <BR>
   Registered(1)</B></FONT></TH>
   <TH><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TH>
   <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Proposed
   <BR>
   Maximum
   <BR>
   Offering Price
   <BR>
   Per Unit(1)</B></FONT></TH>
   <TH><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TH>
   <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Proposed
   <BR>
   Maximum
   <BR>
   Aggregate
   <BR>
   Offering Price(1)</B></FONT></TH>
   <TH><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TH>
   <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Amount of
   <BR>
   Registration Fee(2)</B></FONT></TH>
  </TR>
  <TR>
   <TD COLSPAN=10><HR SIZE=1 NOSHADE></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="324" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Common Stock ($.10
     par value)&nbsp;&nbsp;</FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">41,842,399</FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$8.30</FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">$347,291,911.70</FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$91,685</FONT></TD>
  </TR>
  <TR>
   <TD COLSPAN=10><HR SIZE=1 NOSHADE></TD>
  </TR>
 </TABLE>
 <HR SIZE=1 NOSHADE>
 <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1)</FONT></DIV>
   </TD>
   <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Estimated solely
     for the purpose of calculating the filing fee.</FONT></DIV>
   </TD>
  </TR>
 </TABLE>


 <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(2)</FONT></DIV>
   </TD>
   <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Previously paid by
     wire transfer to the designated lockbox of the Securities and Exchange
     Commission in Pittsburgh, Pennsylvania.</FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="18%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant hereby
   amends this Registration Statement on such date or dates as may be necessary
   to delay its effective date until the Registrant shall file a further
   amendment which specifically states that this Registration Statement shall
   thereafter become effective in accordance with Section 8(a) of the
   Securities Act of 1933 or until the Registration Statement shall become
   effective on such date as the Commission, acting pursuant to said Section
   8(a), may determine.</FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <HR SIZE=1 NOSHADE> <HR SIZE=2 NOSHADE> <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>DEBT STRATEGIES
   FUND, INC.</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT STRATEGIES
   FUND II, INC.</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT STRATEGIES,
   FUND III, INC.</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>P.O. Box
   9011</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Princeton, New
   Jersey 08543-9011</B></FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="21%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>NOTICE OF ANNUAL
   MEETINGS OF STOCKHOLDERS</B></FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="21%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>TO BE HELD ON
   AUGUST 23, 2000</B></FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">TO THE STOCKHOLDERS
   OF</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="2%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="98%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">DEBT STRATEGIES
     FUND, INC.</FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="2%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="98%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">DEBT STRATEGIES
     FUND II, INC</FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="2%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="98%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">DEBT STRATEGIES
     FUND III, INC.</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>


 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICE IS HEREBY
   GIVEN that the annual meetings of stockholders (the &#147;Meetings&#148;) of
   Debt Strategies Fund, Inc. (&#147;Debt Strategies&#148;), Debt Strategies
   Fund II, Inc. (&#147;Debt Strategies II&#148;) and Debt Strategies Fund III,
   Inc. (&#147;Debt Strategies III&#148;) will be held at the offices of
   Merrill Lynch Investment Managers, L.P., 800 Scudders Mill Road, Plainsboro,
   New Jersey on Wednesday, August 23, 2000 at 10:45 a.m. Eastern time (Debt
   Strategies), 11:00 a.m. Eastern time (Debt Strategies II) and 11:15 a.m.
   Eastern time (Debt Strategies III) for the following purposes:</FONT></DIV>

 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>


 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;To
     approve or disapprove an Agreement and Plan of Merger (the &#147;Agreement
     and Plan of Merger&#148;) whereby each of Debt Strategies and Debt
     Strategies III will be merged with and into Debt Strategies II in
     accordance with the General Corporation Law of the State of Maryland. Debt
     Strategies II will be the surviving corporation. A vote in favor of this
     proposal will constitute a vote in favor of the termination of Debt
     Strategies and Debt Strategies III&#146;s respective registrations under
     the Investment Company Act of 1940, as amended; and</FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;To
     elect a Board of Directors of each Fund to serve for the ensuing
     year;</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;&nbsp;To
     consider and act upon a proposal to ratify the selection of Deloitte &amp;
     Touche </FONT><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">LLP </FONT><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">to serve as
     independent auditors of each Fund for its current fiscal year;
     and</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;&nbsp;To
     transact such other business as properly may come before the Meetings or
     any adjournment thereof.</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Boards of
   Directors of Debt Strategies, Debt Strategies II and Debt Strategies III
   have fixed the close of business on June 27, 2000 as the record date for the
   determination of stockholders entitled to notice of, and to vote at, the
   Meetings or any adjournments thereof.</FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A complete list of
   the stockholders of Debt Strategies, Debt Strategies II and Debt Strategies
   III entitled to vote at the Meetings will be available and open to the
   examination of any stockholder of Debt Strategies, Debt Strategies II or
   Debt Strategies III, respectively, for any purpose germane to the Meetings
   during ordinary business hours from and after August 9, 2000, at the offices
   of Debt Strategies II, 800 Scudders Mill Road, Plainsboro, New
   Jersey.</FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You are cordially
   invited to attend the Meetings. <B>Stockholders who do not expect to attend
   the meetings in person are requested to complete, date and sign the enclosed
   form of proxy applicable to their fund and return it promptly in the
   envelope provided for that purpose. </B><I>If you have been provided with
   the opportunity on your proxy card or voting instruction form to provide
   voting instructions via telephone or the Internet, please
 <I>take advantage of these prompt and efficient voting options. </I>The
   enclosed proxy is being solicited on behalf of the Board of Directors of
   Debt Strategies, Debt Strategies II or Debt Strategies III, as
   applicable.</FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>


 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you have any
   questions regarding the enclosed proxy material or need assistance in voting
   your shares of Common Stock, please contact our proxy solicitor, Shareholder
   Communications Corporation, at 1-800-643-3168.</FONT></DIV>

 <DIV><FONT
 SIZE="6">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="52%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">By Order of the
     Boards of Directors</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="6">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="52%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">B<SMALL>RADLEY
     </SMALL>
   J. L<SMALL>UCIDO</SMALL>
   </FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="52%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Secretary
     of:</I></FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="54%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Debt Strategies
     Fund, Inc.,</I></FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="54%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Debt Strategies
     Fund II, Inc., and</I></FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="54%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Debt Strategies
     Fund III, Inc.</I></FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="5">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Plainsboro, New
   Jersey</FONT></DIV>


 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">Dated:&nbsp;&nbsp;July 13, 2000</FONT></DIV>

 <DIV><FONT
 SIZE="6">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

 <B>JOINT PROXY STATEMENT AND PROSPECTUS</B></FONT></DIV>

 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT STRATEGIES
   FUND, INC.</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT STRATEGIES
   FUND II, INC.</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT STRATEGIES
   FUND III, INC.</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>P.O. Box 9011,
   Princeton, New Jersey 08543-9011</B></FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>(609)
   282-2800</B></FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="21%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>ANNUAL MEETINGS OF
   STOCKHOLDERS</B></FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="21%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>AUGUST 23,
   2000</B></FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>


 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Joint Proxy
   Statement and Prospectus is furnished to you as a stockholder of one of the
   funds listed above. An Annual Meeting of the stockholders of each of these
   funds will be held on August 23, 2000 to consider several items that are
   listed below and discussed in greater detail elsewhere in this Joint Proxy
   Statement and Prospectus. The Board of Directors of each of the funds is
   requesting its stockholders to submit a proxy to be used at the Annual
   Meeting to vote the shares held by the stockholder submitting the
   proxy.</FONT></DIV>

 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proposals to be
   considered at the Annual Meetings are:</FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.</FONT></DIV>
   </TD>
   <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">To approve or
     disapprove an Agreement and Plan of Merger among the funds;</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.</FONT></DIV>
   </TD>
   <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">To elect a Board of
     Directors of each fund to serve for the ensuing year;</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>


 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.</FONT></DIV>
   </TD>
   <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">To consider and act
     upon a proposal to ratify the selection of Deloitte &amp; Touche
     <SMALL>LLP</SMALL>
   to serve as independent auditors of each fund for its current fiscal year;
     and</FONT></DIV>
   </TD>
  </TR>
 </TABLE>

 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4.</FONT></DIV>
   </TD>
   <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">To transact such
     other business as may properly come before the Annual Meetings or any
     adjournment thereof.</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Agreement and
   Plan of Merger that you are being asked to consider involves a transaction
   that will be referred to in this Proxy Statement and Prospectus as the
   Merger. The Merger involves the merger of two funds into a third fund. The
   three funds are:</FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies
     Fund II, Inc. (&#147;Debt Strategies II&#148;), which will be the
     surviving fund</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies
     Fund, Inc. (&#147;Debt Strategies&#148;)</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>

 <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
  <TR>
   <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
   <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies
     Fund III, Inc. (&#147;Debt Strategies III&#148;)</FONT></DIV>
   </TD>
  </TR>
 </TABLE>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies and
   Debt Strategies III are sometimes referred to herein collectively as the
   &#147;Acquired Funds&#148; and individually as an &#147;Acquired Fund,&#148;
   as the context requires. Debt Strategies, Debt Strategies II and Debt
   Strategies III are sometimes referred to herein collectively as the
   &#147;Funds&#148; and individually as a &#147;Fund,&#148; as the context
   requires. The fund resulting from the Merger is sometimes referred to herein
   as the &#147;Surviving Fund.&#148;</FONT></DIV>
 <DIV ALIGN="left">


 </DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>


 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Joint Proxy
   Statement and Prospectus serves as a prospectus of Debt Strategies II in
   connection with the issuance of Debt Strategies II Common Stock in the
   Merger.</FONT></DIV>

 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="21%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>


 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Securities and
   Exchange Commission has not approved or disapproved these securities or
   passed upon the adequacy of this Joint Proxy Statement and Prospectus. Any
   representation to the contrary is a criminal offense.</B></FONT></DIV>

 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><HR WIDTH="21%" SIZE="1" NOSHADE></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>


 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>The date of this
   Joint Proxy Statement and Prospectus is July 13, 2000.</B></FONT></DIV>

 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Joint Proxy Statement and
   Prospectus sets forth information about Debt Strategies, Debt Strategies II
   and Debt Strategies III that stockholders of the Funds should know before
   considering the Merger and should be retained for future reference. Each
   Fund has authorized the solicitation of proxies in connection with the
   Merger solely on the basis of this Joint Proxy Statement and Prospectus and
   the accompanying documents.</FONT></DIV>

 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The address of the
   principal executive offices of Debt Strategies, Debt Strategies II and Debt
   Strategies III is 800 Scudders Mill Road, Plainsboro, New Jersey 08536, and
   the telephone number is (609) 282-2800.</FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>
 <DIV ALIGN="left"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman',
   Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock of
   Debt Strategies, Debt Strategies II and Debt Strategies III is listed on the
   New York Stock Exchange (the &#147;NYSE&#148;) under the symbols
   &#147;DBS,&#148; &#147;DSU,&#148; and &#147;DBU,&#148; respectively. After
   the Merger shares of Debt Strategies II Common Stock will continue to be
   listed on the NYSE under the symbol &#147;DSU&#148;. Reports, proxy
   materials and other information concerning the Funds may be inspected at the
   offices of the NYSE, 20 Broad Street, New York, New York 10005.</FONT></DIV>
 <DIV><FONT
 SIZE="1">&nbsp;</FONT></DIV>
 <DIV ALIGN="center"><FONT
 SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>TABLE OF
   CONTENTS</B></FONT></DIV>
 <DIV><FONT
 SIZE="2">&nbsp;</FONT></DIV>


 <BR>

 <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
  <TR>
   <TH VALIGN="bottom" ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
   <TH><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
   <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman',
     Times"><B>Page</B></FONT><FONT
   SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx1">INTRODUCTION</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">5</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx2">ITEM 1. THE MERGER</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx3">SUMMARY</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx4">Financial Highlights</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">12</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx5">RISK FACTORS AND SPECIAL CONSIDERATIONS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">16</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx6">Corporate Loans</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">16</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx7">Lower-Rated Securities</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">16</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx8">Distressed Securities</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">17</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx9">Leverage</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">17</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx10">Other Investment Management Techniques</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">17</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx11">Non-U.S. Securities</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">17</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx12">Concentration in Financial Institutions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">17</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx13">Illiquid Securities</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">18</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx14">Antitakeover Provisions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">18</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx15">AGREEMENT AND PLAN OF MERGER</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">18</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx16">General</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">18</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx17">Procedure</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">18</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx18">Terms of the Agreement and Plan of Merger</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">19</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx19">Potential Benefits to Stockholders of the Funds as a Result
     of the Merger</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">21</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx20">Surrender and Exchange of Stock Certificates</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">22</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx21">Tax Consequences of the Merger</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">23</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx22">Capitalization</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">24</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx23">Investment Objective and Policies</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">24</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx24">Description of Corporate Loans</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">26</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx25">Description of Participation Interests</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">28</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx26">Description of High-Yield Securities</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">29</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx27">Description of Distressed Securities</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">30</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx28">Description of Convertible Securities and Preferred Stock</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">31</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx29">Illiquid Securities</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">31</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx30">Other Investment Policies</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">31</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx31">Interest Rate Transactions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">33</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx32">Foreign Currency Swaps</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">34</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx33">Options on Portfolio Securities</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">35</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx34">Financial Futures and Options Thereon</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">36</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx35">Risk Factors In Interest Rate Transactions and Options and
     Futures Transactions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">37</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx36">Other Investment Strategies</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">38</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx37">Investment Restrictions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">39</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx38">Portfolio Composition</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">41</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx39">Portfolio Transactions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">42</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx40">Portfolio Turnover</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">42</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx41">Net Asset Value</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">43</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx42">Capital Stock</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">44</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx43">Management of the Funds</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">45</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx44">Code of Ethics</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">46</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx45">Voting Rights</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">47</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx46">Stockholder Inquiries</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">47</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx47">Dividends and Distributions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">47</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="579" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx48">Automatic Dividend Reinvestment Plan</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">48</FONT></TD>
  </TR>
 </TABLE>


 <BR>


 <BR>

 <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
  <TR>
   <TH VALIGN="bottom" ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
   <TH><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
   <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
   SIZE="1" COLOR="#000000" FACE="'Times New Roman',
     Times"><B>Page</B></FONT><FONT
   SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx49">Mutual Fund Investment Option</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">49</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx50">Tax Rules Applicable to the Funds and Their Stockholders</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">50</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx51">Tax Treatment of Options and Futures Transactions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">51</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx52">Special Rules for Certain Foreign Currency Transactions</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">52</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx53">ITEM 2. ELECTION OF DIRECTORS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">53</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx54">Committee and Board Meetings</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">54</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx55">Compliance with Section 16(a) of the Securities Exchange Act
     of 1934</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">55</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx56">Interested Persons</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">55</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx57">Compensation of Directors</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">55</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx58">Officers of the Funds</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">55</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx59">ITEM 3. SELECTION OF INDEPENDENT AUDITORS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">55</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx60">INFORMATION CONCERNING THE ANNUAL MEETINGS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">56</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx61">Date, Time and Place of Meetings</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">56</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx62">Solicitation, Revocation and Use of Proxies</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">56</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx63">Record Date and Outstanding Shares</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">56</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx64">Security Ownership of Certain Beneficial Owners and
     Management</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">56</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx65">Voting Rights and Required Vote</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">57</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
   <A HREF="#tx66">Appraisal Rights</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">57</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx67">ADDITIONAL INFORMATION</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">57</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx68">CUSTODIAN</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">58</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx69">TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND REGISTRAR</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">59</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx70">LEGAL PROCEEDINGS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">59</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx71">LEGAL OPINIONS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">59</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx72">EXPERTS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">59</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx73">STOCKHOLDER PROPOSALS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">59</FONT></TD>
  </TR>
  <TR>
   <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
   <A HREF="#tx74">INDEX TO FINANCIAL STATEMENTS</A>
   </FONT></TD>
   <TD><FONT
   SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">F-1</FONT></TD>
  </TR>
  <TD COLSPAN=3><FONT
  SIZE="3">&nbsp;</FONT></TD>
  <TR>
   <TD COLSPAN=3 ALIGN="left"><FONT
   SIZE="2" COLOR="#000000" FACE="'Times New Roman',
     Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
   <TR>
    <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
    <A HREF="#tx75">EXHIBIT I &nbsp;INFORMATION PERTAINING TO EACH FUND</A>
    </FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">I-1</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
    <A HREF="#tx76">EXHIBIT II &nbsp;AGREEMENT AND PLAN OF MERGER</A>
    </FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">II-1</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
    <A HREF="#tx77">EXHIBIT III &nbsp;ARTICLES OF MERGER</A>
    </FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">III-1</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="522" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
    <A HREF="#tx78">EXHIBIT IV DESCRIPTION OF CORPORATE BOND RATINGS</A>
    </FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">IV-1</FONT></TD>
   </TR>
  </TABLE>


  <BR>
  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>
  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
  <A NAME="tx1"></A>
  INTRODUCTION</B></FONT></DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of
    Directors of each of Debt Strategies, Debt Strategies II and Debt
    Strategies III is soliciting the proxies of its shareholders to vote at the
    2000 Annual Meeting of Stockholders. The Meetings will be held at the
    offices of Merrill Lynch Investment Managers, L.P. (&#147;MLIM&#148;), 800
    Scudders Mill Road, Plainsboro, New Jersey on August 23, 2000, at the time
    specified for each Fund in Exhibit I to this Joint Proxy Statement and
    Prospectus. The mailing address for each Fund is P.O. Box 9011, Princeton,
    New Jersey 08543-9011. The approximate mailing date of this Joint Proxy
    Statement and Prospectus is July 19, 2000.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All properly
    executed proxies received prior to the Meetings will be voted at the
    Meetings as marked. Unless instructions to the contrary are marked, proxies
    will be voted &#147;FOR&#148;: (1) approval of the Agreement and Plan of
    Merger; (2) election of the Board of Directors of each Fund; and (3)
    ratification of the selection of Deloitte &amp; Touche <SMALL>LLP</SMALL>
  as the independent auditors of each Fund. The Boards of Directors of the
    Funds know of no business other than that discussed in Items 1, 2 and 3
    above that will be presented for consideration at the Meetings. If any
    other matter is properly presented, it is the intention of the persons
    named in the enclosed proxies to vote in accordance with their best
    judgment.</FONT></DIV>

  <DIV><FONT
  SIZE="5">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Revoking your
    Proxy</B></FONT></DIV>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If you give a proxy,
    you may revoke it at any time before it is exercised by doing any one of
    the following:</FONT></DIV>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="93%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">You may send
      another proxy card with a later date;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">You may notify the
      Fund Secretary in writing before the Annual Meeting that you have revoked
      your proxy; or</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="93%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">You may attend the
      Annual Meeting, revoke your proxy, and vote in person.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="5">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Votes Required to
    Approve the Proposals</B></FONT></DIV>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Approval of the
    Agreement and Plan of Merger.&nbsp;&nbsp;&nbsp;&nbsp;</I>The Agreement and
    Plan must be approved by a majority of the outstanding shares of Common
    Stock of each Fund. The merger will not take place if stockholders of any
    one Fund do not approve the merger.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Election of
    Directors.&nbsp;&nbsp;&nbsp;&nbsp;</I>Directors of each Fund are elected by
    a plurality vote of the shares of Common Stock of that Fund. This means
    that the nine nominees receiving the highest number of votes will be
    elected, even if none receives a majority of the votes cast.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Appointment of
    Independent Auditors.&nbsp;&nbsp;&nbsp;&nbsp;</I>The appointment of
    Deloitte &amp; Touche <SMALL>LLP</SMALL>
  as the independent auditors of a Fund must be approved by a majority of the
    votes cast by the holders of Common Stock present at the Annual Meeting of
    that Fund.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Quorum
    Requirements.&nbsp;&nbsp;&nbsp;&nbsp;</I>A quorum of shares of Common Stock
    is necessary to hold a valid meeting. With respect to each Fund, a quorum
    will exist if holders of at least one-third of the shares of Common Stock
    outstanding are present at the Annual Meeting, either in person or
    represented by a proxy. Abstentions and broker non-votes are counted as
    present for establishing a quorum.</FONT></DIV>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Who is Entitled
    to Vote at the Annual Meeting.&nbsp;&nbsp;&nbsp;&nbsp;</I>The &#147;record
    date&#148; for the Annual Meetings is June 27, 2000. On the record date
    each Fund had outstanding the number of shares of Common Stock set forth on
    Exhibit I. If you held Common Stock of a Fund in your name at the close of
    business on June 27, 2000 you are entitled to vote at the Annual Meeting.
    If you owned Common Stock on June 27, 2000 but the shares are in the name
    of a broker, bank or other nominee, that broker, bank or other nominee
    votes on your behalf unless they give you or your designee a
    proxy.</FONT></DIV>

  <DIV ALIGN="left">


  </DIV>
  <DIV ALIGN="left">


  </DIV>
  <DIV ALIGN="left">


  </DIV>
  <DIV><FONT
  SIZE="6">&nbsp;</FONT></DIV>
  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
  <A NAME="tx2"></A>
  ITEM 1.&nbsp;&nbsp;&nbsp;&nbsp;THE MERGER</B></FONT></DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B><I>
  <A NAME="tx3"></A>
  SUMMARY</B></I></FONT></DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is
    a summary of certain information contained elsewhere in this Joint Proxy
    Statement and Prospectus and is qualified in its entirety by reference to
    the more complete information contained in this Joint Proxy Statement and
    Prospectus and in the Agreement and Plan of Merger attached hereto as
    Exhibit II.</I></FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When we use the term
    &#147;Merger&#148; in this Joint Proxy Statement and Prospectus we
    mean</FONT></DIV>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      and Debt Strategies III will be merged into Debt Strategies II;
      and</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Holders of Common
      Stock of Debt Strategies and Debt Strategies III will receive Common
      Stock of Debt Strategies II based on the net asset value of the Funds on
      the Effective Date of the Merger.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the Merger
    takes place</FONT></DIV>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies II
      will be the surviving corporation;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies II
      will change its name to &#147;Debt Strategies Fund,
      Inc.&#148;;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      and Debt Strategies III will cease to exist;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV ALIGN="left">


  </DIV>
  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">The outstanding
      Common Stock of Debt Strategies II will remain issued and outstanding;
      and</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
    SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    </TD>
    <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      and Debt Strategies III will terminate their registration as investment
      companies under the Investment Company Act.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV ALIGN="left">


  </DIV>
  <DIV ALIGN="left">


  </DIV>
  <DIV ALIGN="left">


  </DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund is a
    diversified, leveraged, closed-end management investment company registered
    under the Investment Company Act. The investment objective of each Fund is
    to seek to provide stockholders with current income by investing primarily
    in a diversified portfolio of U.S. companies&#146; debt instruments,
    including corporate loans, that are rated in the lower rating categories of
    the established rating services (Baa or lower by Moody&#146;s Investors
    Service, Inc. or BBB or lower by Standard &amp; Poor&#146;s) or unrated
    debt instruments of comparable quality. As a secondary objective, the Funds
    seek capital appreciation. In addition, each Fund seeks to enhance income
    by entering into a revolving credit facility and borrowing in amounts up to
    33 1/3% of its total assets (including the amounts borrowed) under such
    credit facility. As part of the Merger, Debt Strategies II will enter into
    a credit facility to refinance the outstanding credit facilities of each of
    the Funds in an amount approximately equal to the aggregate commitment
    amount of the credit facilities currently outstanding for the three
    Funds.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon their
    evaluation of all relevant information, the Board of Directors of each
    Fund, including a majority of the non-interested Directors of each Fund,
    has determined that (i) participation in the Merger is in the best
    interests of the applicable Fund and (ii) that the interests of existing
    stockholders of the applicable Fund will not be diluted as a result of
    effecting the Merger. Specifically, after the Merger, stockholders of each
    Acquired Fund will remain invested in a closed-end fund with an investment
    objective and policies substantially similar to the Acquired Fund&#146;s
    investment objectives and policies and that uses substantially the same
    management personnel. In addition, it is anticipated that the holders of
    Common Stock of each Fund will be subject to a reduced overall operating
    expense ratio based on the estimated pro forma total operating expenses
    (excluding leverage) and the total estimated assets of the Surviving Fund
    after the Merger.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the Agreement
    and Plan of Merger, the Board of Directors of any Fund may cause the Merger
    to be postponed or abandoned in certain circumstances should such Board
    determine that it is in the best interests of the stockholders of that Fund
    to do so. The Agreement and Plan of Merger may be terminated, and the
    Merger abandoned, whether before or after approval by the stockholders of
    the Funds, at any time prior to the Effective Date, (i) by mutual consent
    of the Boards of Directors of all of the Funds or (ii) by the Board of
    Directors of any Fund if any condition to that Fund&#146;s obligations has
    not been fulfilled or waived by such Fund&#146;s Board of
    Directors.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>Fee Table for
    Common Stockholders of Debt Strategies II,</B></FONT></DIV>


  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt Strategies,
    Debt Strategies III and the Surviving Fund*</B></FONT></DIV>

  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>as of February
    29, 2000 (Unaudited)(a)</B></FONT></DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table
    illustrates, based on net assets as of February 29, 2000 the expenses
    currently incurred by stockholders of each Fund individually and the
    estimated pro forma expenses to be incurred by the Surviving Fund
    stockholders after the Merger:</FONT></DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <BR>

  <TABLE ALIGN="center" WIDTH="613" CELLSPACING=0 CELLPADDING=0>
   <TR>
    <TH VALIGN="bottom" ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=8 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>Actual</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TH VALIGN="bottom" ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
    <BR>
    Strategies II</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
    <BR>
    Strategies</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
    <BR>
    Strategies III</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
    <BR>
    Forma
    <BR>
    Surviving
    <BR>
    Fund(c)</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Common Stockholder
      Transaction Expenses
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Maximum Sales Load (as a percentage of the
      offering
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;price) imposed on purchases of Common
      Stock</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(a)(b)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(a)(b)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(a)(b)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(a)(b)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Dividend
      Reinvestment and Cash Purchase Plan Fees</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Annual Expenses
      (as a percentage of net assets attributable
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to Common Stock at February 29,
      2000)(including
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Investment
      Advisory Fees(d)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.78</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.79</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.82</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.79</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Interest Payments
      on Borrowed Funds(e)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.94</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.01</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.33</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.00</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Other
      Expenses</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.17</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.34</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.37</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.13</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Total Annual
      Expenses (including leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.89</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.14</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.52</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.92</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Annual Expenses
      (as a percentage of net assets attributable
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;to Common Stock at February 29, 2000)
      (excluding
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Investment
      Advisory Fees</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.60</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.60</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.60</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.60</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Interest Payments
      on Borrowed Funds(e)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">None</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Other
      Expenses</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.17</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.34</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.37</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.13</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="332" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Total Annual
      Expenses (excluding leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.77</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.94</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.97</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.73</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="28" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
  </TABLE>


  <BR>
  <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;*</FONT></DIV>
    </TD>
    <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">The expenses for
      the Surviving Fund represent the estimated annualized expenses as of
      February 29, 2000 assuming Debt Strategies II had acquired the assets and
      assumed the liabilities of Debt Strategies and Debt Strategies III as of
      that date.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>


  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(a)</FONT></DIV>
    </TD>
    <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Shares of Common
      Stock purchased in the secondary market may be subject to brokerage
      commissions or other charges.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(b)</FONT></DIV>
    </TD>
    <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">No sales load will
      be charged on the issuance of shares in the Merger. Shares of Common
      Stock are not available for purchase from the Funds but may be purchased
      in the secondary market through a broker-dealer subject to individually
      negotiated commission rates.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(c)</FONT></DIV>
    </TD>
    <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">The pro forma
      annual operating expenses for the Surviving Fund are projections for a
      12-month period.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(d)</FONT></DIV>
    </TD>
    <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Based on net
      assets plus the proceeds of any outstanding borrowings used for leverage
      as of February 29, 2000.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(e)</FONT></DIV>
    </TD>
    <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Based on the
      amount of outstanding borrowings for each of the Funds as of February 29,
      2000.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing Fee
    Table is intended to assist investors in understanding the costs and
    expenses that a common stockholder of each Fund will bear directly or
    indirectly as compared to the costs and expenses that would be borne by
    such investors taking into account the Merger.</FONT></DIV>

  <DIV><FONT
  SIZE="5">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
    <B>Example:</B></FONT></DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Cumulative
    Expenses Paid on Shares of Common Stock</B></FONT></DIV>
  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>for the Periods
    Indicated:</B></FONT></DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <BR>

  <TABLE ALIGN="center" WIDTH="613" CELLSPACING=0 CELLPADDING=0>
   <TR>
    <TH VALIGN="bottom" ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>1
      Year</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>3
      Years</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>5
      Years</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>10
      Years</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An investor would
      pay the following expenses on a $1,000 investment
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;assuming (1) the operating expense ratio for
      each Fund set forth above
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and (2) a 5% annual return throughout the
      period:</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      (including leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$32</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;97</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$164</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$345</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies II
      (including leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$29</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;89</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$152</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$321</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      III (including leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$35</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$108</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$183</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$379</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Surviving
      Fund*&#134; (including leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$30</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;90</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$154</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$324</FONT></TD>
   </TR>
   <TR>
    <TD COLSPAN=9 ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TD COLSPAN=9><FONT
   SIZE="1">&nbsp;</FONT></TD>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      (excluding leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$10</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;30</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;52</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$115</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies II
      (excluding leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;8</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;25</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;43</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;95</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      III (excluding leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$10</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;31</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;54</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$119</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="419" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Surviving Fund*
      (excluding leverage)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;7</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;23</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;41</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;91</FONT></TD>
   </TR>
  </TABLE>


  <BR>
  <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="2%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">*</FONT></DIV>
    </TD>
    <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Assumes that the
      Merger had taken place on February 29, 2000.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="2%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&#134;</FONT></DIV>
    </TD>
    <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">As of February 29,
      2000, the operating expense ratio of the Surviving Fund (on a pro forma
      basis) is higher than such ratio for Debt Strategies II as a result of
      the higher leverage percentage of Debt Strategies and Debt Strategies III
      as of February 29, 2000 and the related costs of such
      leverage.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The example set
    forth above assumes that shares of common stock were purchased in the
    initial offerings and that all dividends and distributions were reinvested
    and uses a 5% annual rate of return as mandated by Securities and Exchange
    Commission (the &#147;SEC&#148;) regulations. The example should not be
    considered a representation of past or future expenses or annual rates of
    return. Actual expenses or annual rates of return may be more or less than
    those assumed for purposes of the example. </B>See &#147;Comparison of the
    Funds&#148; and &#147;Agreement and Plan of Merger&#151;Potential Benefits
    to Stockholders of the Funds as a Result of the Merger.&#148;</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
    Strategies</B>..</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      was incorporated under the laws of the State of Maryland on April 3, 1997
      and commenced operations on May 30, 1997.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      has outstanding shares of Common Stock. As of May 31, 2000, Debt
      Strategies had net assets of approximately $212.2 million.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt Strategies
    II</B>..</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies II
      was incorporated under the laws of the State of Maryland on December 10,
      1997 and commenced operations on March 27, 1998.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies II
      has outstanding shares of Common Stock. As of May 31, 2000, Debt
      Strategies II had net assets of approximately $506.9 million.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt Strategies
    III</B>..</FONT></DIV>
  <DIV ALIGN="right"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      III was incorporated under the laws of the State of Maryland on May 26,
      1998 and commenced operations on July 31, 1998.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV ALIGN="left">


  </DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      III has outstanding shares of Common Stock. As of May 31, 2000, Debt
      Strategies III had net assets of approximately $97.4 million.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>Comparison of
    the Funds</B>..</FONT></DIV>
  <DIV ALIGN="right"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Investment
      Objectives and Policies.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund is a
      diversified, leveraged, closed-end management investment company. The
      Funds have substantially similar investment objectives and policies. Each
      Fund seeks to provide stockholders with current income by investing
      primarily in a diversified portfolio of U.S. companies&#146; debt
      instruments, including corporate loans, that are rated in the lower
      rating categories of the established rating services (Baa or lower by
      Moody&#146;s or BBB or lower by S&amp;P) or unrated debt instruments of
      comparable quality. As a secondary objective, the Funds will seek capital
      appreciation. Up to 35% of the total assets of Debt Strategies and up to
      20% of the total assets of each of Debt Strategies II and Debt Strategies
      III may be invested in (a) debt instruments which, at the time of
      investment, are the subject of bankruptcy proceedings or are otherwise in
      default as to the repayment of principal or the payment of interest or
      are rated in the lowest rating categories (Ca or lower by Moody&#146;s
      and CC or lower by S&amp;P) or (b) unrated debt instruments of comparable
      quality. After the Merger, up to 20% of the Surviving Fund&#146;s total
      assets may be invested in such debt instruments. Each Fund also may
      invest up to 20% of its total assets in financial instruments of issuers
      domiciled outside the United States or that are denominated in various
      foreign currencies and multinational foreign currency units.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>

  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">The same
      investment restrictions apply to each Fund. See &#147;Comparison of the
      Funds&#151;Investment Objectives and Policies.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Capital
      Stock.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund has outstanding Common Stock.
      The Common Stock of each Fund is traded on the NYSE. As of May 31, 2000,
      (i) the net asset value per share of Debt Strategies Common Stock was
      $6.75 and the market price per share was $6.0625; (ii) the net asset
      value per share of Debt Strategies II Common Stock was $8.10 and the
      market price per share was $7.125; and (iii) the net asset value per
      share of Debt Strategies III Common Stock was $8.84 and the market price
      per share was $8.1875. See &#147;Comparison of the Funds&#151;Capital
      Stock.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>Management.&nbsp;&nbsp;&nbsp;&nbsp;</I>The investment adviser
      for each Fund is Fund Asset Management, L.P. (&#147;FAM&#148;). The
      principal business address of FAM is 800 Scudders Mill Road, Plainsboro,
      New Jersey 08536. FAM was organized as an investment adviser in 1977 and
      offers investment advisory services to more than 50 registered investment
      companies. Merrill Lynch Investment Managers, L.P. (&#147;MLIM&#148;) and
      its affiliates (including FAM) act as investment adviser for over 100
      registered investment companies and also offers portfolio management and
      portfolio analysis services to individuals and institutional
      accounts.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>

  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">FAM is responsible
      for the management of each Fund&#146;s investment portfolio and for
      providing administrative services to each Fund. Richard C. Kilbride and
      Gilles Marchand serve as the
    portfolio managers for each Fund. After the Merger, the Surviving Fund will
      be managed by the same management team.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Advisory
      Fees.</I>&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to separate investment advisory
      agreements between FAM and each Fund, each Fund pays FAM a monthly fee at
      the annual rate of 0.60% of such Fund&#146;s average weekly net assets
      plus the proceeds of any outstanding borrowings used for leverage. After
      the Merger, the Surviving Fund will pay FAM a monthly fee at the same
      annual rate of 0.60% of its average weekly net assets, plus the proceeds
      of any outstanding borrowings used for leverage. See &#147;Comparison of
      the Funds&#151;Management of the Funds.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>

  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Other
      Significant Fees.&nbsp;&nbsp;&nbsp;&nbsp;</I>The Bank of New York is the
      custodian, transfer agent and dividend disbursing agent for the Common
      Stock of Debt Strategies and Debt Strategies II. State Street Bank and
      Trust Company is the custodian, transfer agent and dividend disbursing
      agent for the Common Stock of Debt Strategies III. The principal business
      addresses for The Bank of New York and State Street Bank and Trust
      Company are as follows: The Bank of New York, 90 Washington Street, New
      York, New York 10286 (for its custodial services) and 101 Barclay Street,
      New York, New York 10286 (for its transfer agency services) and for State
      Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts
      02110. See &#147;Comparison of the Funds&#151;Management of the
      Funds.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left">


  </DIV>

  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Portfolio
      Transactions.&nbsp;&nbsp;&nbsp;&nbsp;</I>The portfolio transactions in
      which the Funds may engage are substantially similar, as are the
      procedures for such transactions. See &#147;Comparison of the
      Funds&#151;Portfolio Transactions.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>

  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Dividends and
      Distributions.&nbsp;&nbsp;&nbsp;&nbsp;</I>The methods of dividend payment
      and distributions are substantially similar for all of the Funds. See
      &#147;Comparison of the Funds&#151;Dividends and
      Distributions.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>

  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Net Asset
      Value.&nbsp;&nbsp;&nbsp;&nbsp;</I>The net asset value per share of Common
      Stock of each Fund is determined as of the close of business on the NYSE
      (generally, 4:00 p.m., Eastern time) on the last business day of each
      week. For purposes of determining the net asset value of a share of
      Common Stock of each Fund, the value of the securities held by the Fund
      plus any cash or other assets (including interest accrued but not yet
      received) minus all liabilities (including accrued expenses) and the
      aggregate liquidation value of the outstanding shares of preferred stock
      of the Fund is divided by the total number of shares of Common Stock of
      the Fund outstanding at such time. Expenses, including fees payable to
      FAM, are accrued daily. See &#147;Comparison of the Funds&#151;Net Asset
      Value.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>

  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Voting
      Rights.&nbsp;&nbsp;&nbsp;&nbsp;</I>The corresponding voting rights of the
      holders of shares of each Fund&#146;s Common Stock are substantially
      similar. See &#147;Comparison of the Funds&#151;Capital
      Stock.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>

  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <I>Stockholder
      Services.&nbsp;&nbsp;&nbsp;&nbsp;</I>An automatic dividend reinvestment
      plan is available to holders of shares of the Common Stock of each Fund.
      The plans are substantially similar for each Fund. See &#147;Comparison
      of the Funds&#151;Automatic Dividend Reinvestment Plan.&#148; Other
      stockholder services, including the provision of annual and semi-annual
      reports, are the same for each Fund.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Tax
    Considerations</B>..</FONT></DIV>
  <DIV ALIGN="right"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>


  <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="42%" ALIGN="left" VALIGN="top"></TD>
    <TD ALIGN="left" WIDTH="58%" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">The Merger has
      been structured with the intention that it will qualify for United States
      Federal income tax purposes as a tax-free merger. Based on certain
      representations made by each Fund, the Funds will receive an opinion of
      Brown &amp; Wood <SMALL>LLP</SMALL>
    , counsel to each of the Funds, with respect to the Merger to the effect
      that, among other things, no Fund will recognize taxable gain or loss on
      the Merger and no stockholder of Debt Strategies or Debt Strategies III
      will recognize taxable gain or loss upon the issuance of Debt Strategies
      II Common Stock in the Merger (except to the extent that a Debt
      Strategies or Debt Strategies III stockholder receives cash representing
      his or her interest in less than a full share of Debt Strategies II in
      the Merger). See &#147;Agreement and Plan of Merger&#151;Terms of the
      Agreement and Plan of Merger&#148; and &#147;&#151;Tax Consequences of
      the Merger.&#148;</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Outstanding
    Securities of Debt Strategies, Debt Strategies II</B></FONT></DIV>



  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>and Debt
    Strategies III as of June 27, 2000</B></FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <BR>

  <TABLE ALIGN="center" WIDTH="613" CELLSPACING=0 CELLPADDING=0>
   <TR>
    <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Title of
      Class</B></FONT><FONT
    SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Amount
    <BR>
    Authorized</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Amount Held by
    <BR>
    Fund for Its Own
    <BR>
    Account</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Amount
    <BR>
    Outstanding
    <BR>
    Exclusive of
    <BR>
    Amount Shown in
    <BR>
    Previous Column</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="343" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
      Strategies</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="343" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common
      Stock</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">200,000,000</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">-0-</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">31,425,226</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="343" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      II</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="343" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common
      Stock</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">200,000,000</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">-0-</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">62,610,000</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="343" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
      III</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="343" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common
      Stock</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">200,000,000</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">-0-</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">11,010,000</FONT></TD>
   </TR>
  </TABLE>


  <BR>
  <DIV ALIGN="left">


  </DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>
  <A NAME="tx4"></A>
  FINANCIAL HIGHLIGHTS</I></FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times"><B>&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies</B></FONT></DIV>
  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial
    information in the table below has been audited in conjunction with the
    annual audits of the financial statements of Debt Strategies by Deloitte
    &amp; Touche <SMALL>LLP</SMALL>
  , independent auditors for the Fund. The following per share data and ratios
    have been derived from information provided in the financial statements of
    Debt Strategies.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <BR>

  <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
   <TR>
    <TH VALIGN="bottom" ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>For the Fiscal
      Year Ended</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 ROWSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>For the Period
    <BR>
    May 30, 1997&#134; To
    <BR>
    February 28, 1998</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TH VALIGN="bottom" ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>February 29,
      2000&#134;&#134;</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>February 28,
      1999</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><I>Increase
      (Decrease) in Net Asset Value:</I></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Per Share
      Operating Performance:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Net asset value,
      beginning of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.20</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.15</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.00</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Investment
      income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">.86</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">.91</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">.71</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Realized and
      unrealized (loss) on investments and foreign
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;currency transactions&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(.99</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(1.93</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">.09</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total from
      investment operations</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(.13</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(1.02</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">.80</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Less dividends
      from investment income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(.86</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(.93</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(.63</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Capital charge
      resulting from issuance of Common Stock</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&#151;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&#151;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(.02</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Net asset value,
      end of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.21</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.20</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.15</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Market price per
      share, end of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;6.1875</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;7.625</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$10.5625</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Total
      Investment Return:**</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Based on market
      price per share</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(8.30</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(19.90</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">12.38</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%#</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Based on net asset
      value per share</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(.64</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(10.36</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">7.99</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%#</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Ratios to
      Average Net Assets:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Expenses, net of
      reimbursement and excluding interest
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;expense</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">1.19</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">1.09</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">.61</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Expenses, net of
      reimbursement</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3.46</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3.48</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">2.28</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">Expenses</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3.46</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3.48</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">2.56</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Investment
      income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10.85</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10.03</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.64</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>Leverage:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Amount of
      borrowings, end of period (in thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;70,000</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$112,000</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$142,600</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Average amount of
      borrowings outstanding during the period
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;(in thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;97,120</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$120,528</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;85,903</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Average amount of
      borrowings outstanding per share during
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;the period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.09</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.84</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.79</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Supplemental
      Data:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Net assets, end of
      period (in thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$226,475</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$257,779</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">$317,735</FONT></TD>
    <TD><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Portfolio
      turnover</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">48.73</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">61.30</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">43.79</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
  </TABLE>


  <BR>
  <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;*</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">Annualized.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">**</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total investment
      returns based on market value, which can be significantly greater or
      lesser than the net asset value, may result in substantially different
      returns. Total investment returns exclude the effects of sales
      charges.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&#134;</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Commencement of
      operations.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&#134;&#134;</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Based on average
      shares outstanding.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;#</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Aggregate total
      investment return.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="5">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
    <I>&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies II</I></FONT></DIV>
  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial
    information in the table below has been audited in conjunction with the
    annual audits of the financial statements of Debt Strategies II by Deloitte
    &amp; Touche <SMALL>LLP</SMALL>
  , independent auditors for the Fund. The following per share data and ratios
    have been derived from information provided in the financial statements of
    Debt Strategies II.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <BR>

  <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
   <TR>
    <TH VALIGN="bottom" ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>For the Fiscal
    <BR>
    Year Ended
    <BR>
    February 29, 2000</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>For the Period
    <BR>
    March 27, 1998&#134; to
    <BR>
    February 28, 1999</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Increase
      (Decrease) in Net Asset Value:</I></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Per Share
      Operating Performance:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net asset value,
      beginning of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.15</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.00</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Investment
      income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.97</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.76</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Realized and
      unrealized loss on investments and foreign currency
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;transactions&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.56</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.91</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Total from
      investment operations</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.41</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.15</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Less dividends
      from investment income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.96</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.69</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Capital charge
      resulting from issuance of Common Stock</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&#151;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.01</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net asset value,
      end of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.60</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.15</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Market price per
      share, end of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;7.1875</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;7.875</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Total
      Investment Return:**</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Based on market
      price per share</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.19</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(14.87</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">%)&#134;&#134;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Based on net asset
      value per share</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.26</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1.09</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">%)&#134;&#134;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Ratios to
      Average Net Assets:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Expenses, net of
      reimbursement and excluding interest expense</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.98</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.54</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Expenses, net of
      reimbursement</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.87</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.93</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">Expenses</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.87</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.20</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Investment
      income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.88</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.60</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>Leverage:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Amount of
      borrowings, end of period (in thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$161,000</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$142,000</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Average amount of
      borrowings outstanding during the period (in
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$182,404</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;42,330</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Average amount of
      borrowings outstanding per share during the
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.91</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.69</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Supplemental
      Data:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net assets, end of
      period (in thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$538,343</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$572,902</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="388" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Portfolio
      turnover</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">61.76</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">89.76</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
  </TABLE>


  <BR>
  <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;*</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">Annualized.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">**</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total investment
      returns based on market value, which can be significantly greater or
      lesser than the net asset value, may result in substantially different
      returns. Total investment returns exclude the effects of sales
      charges.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&#134;</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Commencement of
      operations.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&#134;&#134;</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Aggregate total
      investment return.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="5">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
    <I>&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies III</I></FONT></DIV>
  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman',
    Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The financial
    information in the table below has been audited in conjunction with the
    annual audits of the financial statements of Debt Strategies III by
    Deloitte &amp; Touche <SMALL>LLP</SMALL>
  , independent auditors for the Fund. The following per share data and ratios
    have been derived from information provided in the financial statements of
    Debt Strategies III.</FONT></DIV>

  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>


  <BR>

  <TABLE ALIGN="center" WIDTH="615" CELLSPACING=0 CELLPADDING=0>
   <TR>
    <TH VALIGN="bottom" ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>For the Fiscal
    <BR>
    Year End
    <BR>
    February 29, 2000</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>For the Period
    <BR>
    July 31, 1998&#134; To
    <BR>
    February 28, 1999</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Increase
      (Decrease) In Net Asset Value:</I></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Per Share
      Operating Performance:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net asset value,
      beginning of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.05</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.00</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Investment
      income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.06</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.47</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Realized and
      unrealized gain (loss) on investments and foreign
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;currency transactions&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.72</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.01</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Total from
      investment operations</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.34</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.48</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Less dividends
      from investment income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1.03</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.40</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Capital charge
      resulting from issuance of Common Stock</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&#151;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(.03</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="1" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net asset value,
      end of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.36</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.05</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Market price per
      share, end of period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.75</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;8.875</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Total
      Investment Return:**</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Based on market
      price per share</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.82</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(7.37</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">%)&#134;&#134;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Based on net asset
      value per share</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4.69</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4.89</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">%&#134;&#134;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Ratios To
      Average Net Assets:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Expenses, net of
      reimbursement and excluding interest expense</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.18</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.31</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Expenses, net of
      reimbursement</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.36</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">.39</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">Expenses</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.36</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.09</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Investment
      income&#151;net</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.73</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.02</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%*</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>Leverage:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Amount of
      borrowings, end of period (in thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;37,000</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;18,000</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Average amount of
      borrowings outstanding during the period (in
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;40,776</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;1,737</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Average amount of
      borrowings oustanding per share during the
    <BR>
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;period</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.70</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;0.16</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Supplemental
      Data:</B></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" ALIGN="right"></TD>
    <TD></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net assets, end of
      period (in thousands)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$103,079</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$110,658</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="393" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Portfolio
      turnover</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">50.07</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">50.99</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
   </TR>
   <TR>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1"><HR ALIGN="right" WIDTH="49" SIZE="2" NOSHADE></FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;</FONT></TD>
   </TR>
  </TABLE>


  <BR>
  <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;*</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">Annualized.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">**</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total investment
      returns based on market value, which can be significantly greater or
      lesser than the net asset value, may result in substantially different
      returns. Total investment returns exclude the effects of sales
      charges.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&#134;</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Commencement of
      operations.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>

  <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
   <TR>
    <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times">&#134;&#134;</FONT></DIV>
    </TD>
    <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Aggregate total
      investment return.</FONT></DIV>
    </TD>
   </TR>
  </TABLE>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>Per Share Data
    for Common Stock* of Debt Strategies, Debt Strategies II</B></FONT></DIV>
  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>and Debt
    Strategies III (Unaudited)</B></FONT></DIV>
  <DIV ALIGN="center"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Traded on the New
    York Stock Exchange</B></FONT></DIV>
  <DIV><FONT
  SIZE="2">&nbsp;</FONT></DIV>
  <DIV ALIGN="left"><FONT
  SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
    Strategies</B></FONT></DIV>
  <DIV><FONT
  SIZE="1">&nbsp;</FONT></DIV>


  <BR>

  <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
   <TR>
    <TH VALIGN="bottom" ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Market
      Price**</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Net Asset
      Value</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Premium
    <BR>
    (Discount)
    <BR>
    to Net
    <BR>
    Asset Value</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Quarter
      Ended*</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>High</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>Low</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>High</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>Low</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>High</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    <TH><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
    <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>Low</B></FONT><FONT
    SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">August 31,
      1997&#134;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.50</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.00</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$10.20</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">$&nbsp;&nbsp;9.99</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.33</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(0.74</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)%</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">November 30,
      1997</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.875</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.875</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.29</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.00</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.50</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(1.09</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">February 28,
      1998</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">15.625</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;10.0625</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.20</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.96</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.89</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.67</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">May 31,
      1998</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">15.5625</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.0625</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.20</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.96</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4.58</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.93</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">August 31,
      1998</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.375</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.9375</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.98</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.12</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.33</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(12.97</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">November 30,
      1998</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.1875</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.8125</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.06</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.21</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.33</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(5.84</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">February 28,
      1999</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.5625</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.625</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.60</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.20</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.00</FONT></TD>
    <TD><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(7.19</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">May 31,
      1999</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.875</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.3125</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.39</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.13</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(5.07</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(10.92</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">August 31,
      1999</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.875</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.0625</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.23</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.84</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(3.42</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(10.37</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">November 30,
      1999</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.125</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.125</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.83</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.46</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(9.00</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(18.22</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">February 29,
      2000</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.75</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.00</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.51</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.21</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(7.15</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(18.51</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TR>
    <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">May 31,
      2000</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.25</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.875</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.21</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.15</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(12.04</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    <TD><FONT
    SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
    <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(17.45</FONT></TD>
    <TD VALIGN="bottom" ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
   </TR>
   <TD COLSPAN=15><FONT
   SIZE="5">&nbsp;</FONT></TD>
   <TR>
    <TD COLSPAN=15 ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt Strategies
      II</B></FONT></TD>
    <TD COLSPAN=15><FONT
    SIZE="1">&nbsp;</FONT></TD>
    <TR>
     <TH VALIGN="bottom" ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">&nbsp;</FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Market
       Price**</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Net Asset
       Value</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Premium
     <BR>
     (Discount)
     <BR>
     to Net
     <BR>
     Asset Value</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    </TR>
    <TR>
     <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Quarter
       Ended*</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman',
       Times"><B>High</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman',
       Times"><B>Low</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman',
       Times"><B>High</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman',
       Times"><B>Low</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman',
       Times"><B>High</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     <TH><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
     <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
     SIZE="1" COLOR="#000000" FACE="'Times New Roman',
       Times"><B>Low</B></FONT><FONT
     SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">May 31,
       1998&#134;&#134;</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman',
       Times">$10.4375</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman',
       Times">$&nbsp;&nbsp;&nbsp;&nbsp;10.00</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$10.07</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$10.00</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.34</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.00</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">August 31,
       1998</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.125</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.125</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.09</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.55</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(0.17</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(15.10</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">November 30,
       1998</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.9375</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.1875</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.52</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.14</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(4.57</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(11.49</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">February 28,
       1999</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.75</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.875</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.42</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.15</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(10.33</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(13.93</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">May 31,
       1999</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.5625</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.9375</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.43</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.12</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(7.71</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(13.84</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">August 31,
       1999</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.75</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.8125</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.25</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.90</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(5.67</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(11.90</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">November 30,
       1999</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.1875</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.000</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.90</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.65</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(9.40</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(17.91</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">February 29,
       2000</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.4375</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.9375</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.74</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.57</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(14.74</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(19.45</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    </TR>
    <TR>
     <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">May 31,
       2000</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.25</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.75</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.61</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.09</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(12.07</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     <TD><FONT
     SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
     <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(20.15</FONT></TD>
     <TD VALIGN="bottom" ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
    </TR>
    <TD COLSPAN=15><FONT
    SIZE="5">&nbsp;</FONT></TD>
    <TR>
     <TD COLSPAN=15 ALIGN="left"><FONT
     SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
       Strategies III</B></FONT></TD>
     <TD COLSPAN=15><FONT
     SIZE="1">&nbsp;</FONT></TD>
     <TR>
      <TH VALIGN="bottom" ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Market
        Price**</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Net Asset
        Value</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Premium
      <BR>
      (Discount)
      <BR>
      to Net
      <BR>
      Asset Value</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     </TR>
     <TR>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Quarter
        Ended*</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><B>High</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><B>Low</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><B>High</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><B>Low</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><B>High</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><B>Low</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">August 31,
        1998&#134;&#134;&#134;</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$&nbsp;&nbsp;10.166</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$&nbsp;&nbsp;8.3125</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$10.01</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$&nbsp;&nbsp;9.98</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.20</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(9.91</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)%</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">November 30,
        1998</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.01</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.875</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.06</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.83</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(4.47</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">(10.17</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">February 28,
        1999</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.75</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.75</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.15</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.98</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(2.69</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">(12.83</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">May 31,
        1999</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">9.8125</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">8.6875</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.27</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.02</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(9.67</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">(14.40</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">August 31,
        1999</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">9.8125</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">8.8125</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.15</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.86</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(5.71</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">(10.80</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">November 30,
        1999</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">9.0625</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.875</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.86</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.59</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(3.62</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">(18.31</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">February 29,
        2000</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">9.0625</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">7.9375</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.67</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.34</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(3.99</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">(16.75</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="289" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">May 31,
        2000</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.75</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.125</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">9.37</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.82</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(4.16</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(7.98</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
     </TR>
    </TABLE>


    <BR>
    <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">
        &nbsp;&nbsp;*</FONT></DIV>
      </TD>
      <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Calculations are
        based upon shares of Common Stock outstanding at the end of each
        quarter.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>



    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;**</FONT></DIV>
      </TD>
      <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">As reported in
        the consolidated transaction operating system.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>



    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&#134;</FONT></DIV>
      </TD>
      <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">For the period
        May 30, 1997 to August 31, 1997.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>



    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&#134;&#134;</FONT></DIV>
      </TD>
      <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">For the period
        March 27, 1998 to May 31, 1998.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>



    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times">&#134;&#134;&#134;</FONT></DIV>
      </TD>
      <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">For the period
        July 31, 1998 to August 31, 1998.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since Debt
      Strategies commenced operations on May 30, 1997, share prices for its
      Common Stock have fluctuated between a maximum premium to net asset value
      of approximately 8.33% and a maximum discount to net asset value of
      approximately (18.51%). Since Debt Strategies II commenced operations on
      March 27, 1998, share prices for its Common Stock have fluctuated between
      a maximum premium to net asset value of approximately 3.34% and a maximum
      discount to net asset value of approximately (20.15%). Since Debt
      Strategies III commenced operations on July 31, 1998, share prices for
      its Common Stock have fluctuated between a maximum premium to net asset
      value of approximately 0.20% and a maximum discount to net asset value of
      approximately (18.31%). Although there is no reason to believe that this
      pattern should be affected by the Merger, it is not possible to predict
      whether shares of the Surviving Fund will trade at a premium or discount
      to net asset value following the Merger, or the magnitude of any such
      premium or discount.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B><I>
    <A NAME="tx5"></A>
    RISK FACTORS AND SPECIAL CONSIDERATIONS</B></I></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The investment
      risks associated with an investment in Debt Strategies II are
      substantially similar to the investment risks associated with an
      investment in Debt Strategies and Debt Strategies III. Such risks
      include, without limitation, (a) the risks associated with investments in
      junk bonds, high-yield corporate loans and distressed securities and (b)
      leverage. These investment risks will apply to an investment in the
      Surviving Fund after the Merger. It is expected that the Merger itself
      will not adversely affect the rights of holders of shares of Common Stock
      of any Fund or create additional risks.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx6"></A>
    Corporate Loans</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds may
      invest in senior and subordinated corporate loans (&#147;Corporate
      Loans&#148;), both secured and unsecured. A Corporate Loan which is
      unsecured is not supported by any specific pledge of collateral and
      therefore constitutes only a general obligation of the borrower. In
      addition to being unsecured, a Corporate Loan in which the Funds may
      invest may be subordinate in right of payment to the senior debt
      obligations of the borrower. Upon a liquidation or bankruptcy of the
      borrower the senior debt obligations of the borrower are often required
      to be paid in full before the subordinated debt holders are permitted to
      receive any distribution on behalf of their claim. Distributions, if any,
      to subordinated debt holders in such situations may consist in whole or
      in part of non-income producing securities, including common stock.
      Accordingly, following an event of default or liquidation or bankruptcy
      of a borrower, there can be no assurance that the assets of the borrower
      will be sufficient to satisfy the claims of unsecured and subordinated
      debt holders or that such debt holders will receive income producing debt
      securities in satisfaction of their claims. As a result, the Funds might
      not receive payments to which they are entitled and thereby may
      experience a decline in the value of their investments and possibly,
      their net asset value.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      invest in Corporate Loans made in connection with highly leveraged
      transactions. Corporate Loans made in connection with highly leveraged
      transactions are subject to greater credit risks than other Corporate
      Loans in which the Funds may invest. These credit risks include a greater
      possibility of default or bankruptcy of the borrower and the assertion
      that the pledging of collateral, if any, to secure the loan constituted a
      fraudulent conveyance or preferential transfer which can be nullified or
      subordinated to the rights of other creditors of the borrower under
      applicable law. Highly leveraged Corporate Loans also may be less liquid
      than other Corporate Loans.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The success of
      each Fund depends to a great degree, on the skill with which the agent
      banks administer the terms of the Corporate Loan agreements, monitor
      borrower compliance with covenants, collect principal, interest




    and fee payments from borrowers and, where necessary, enforce creditor
      remedies against borrowers. Typically, the agent bank will have broad
      discretion in enforcing a Corporate Loan agreement. The financial status
      of the agent bank and co-lenders and participants interposed between each
      Fund and a borrower may affect the ability of each Fund to receive
      payments of interest and principal.</FONT></DIV>

    <DIV ALIGN="left">


    </DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx7"></A>
    Lower-Rated Securities</B></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left">


    </DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junk bonds and
      high-yield Corporate Loans are regarded as being predominantly
      speculative as to the issuer&#146;s ability to make payments of principal
      and interest. Investment in such securities involves substantial risk.
      Issuers of junk bonds and high-yield Corporate Loans may be highly
      leveraged and may not have available to them more traditional methods of
      financing. Therefore, the risks associated with acquiring the securities
      of such issuers generally are greater than is the case with higher-rated
      securities. For example, during an economic downturn or a sustained
      period of rising interest rates, issuers of junk bonds and high-yield
      Corporate Loans may be more likely to experience financial stress,
      especially if such issuers are highly leveraged. During periods of
      economic downturn, such issuers may not have sufficient revenues to meet
      their interest payment obligations. The issuer&#146;s ability to service
      its debt obligations also may be adversely affected by specific issuer
      developments, or the issuer&#146;s inability to meet specific projected
      business forecasts or the unavailability of additional financing.
      Therefore, there can be no assurance that in the future there will not
      exist a higher junk bond and high-yield Corporate Loan default rate
      relative to the rates currently existing in the junk bond and high-yield
      Corporate Loan markets. The risk of loss due to default by the issuer is
      significantly greater for the holders of junk bond and high-yield
      Corporate Loans because such securities may be unsecured and may be
      subordinate to other creditors of the issuer. Other than with respect to
      Distressed Securities, the junk bonds and high-yield Corporate Loans in
      which the Funds may invest do not include instruments which, at the time
      of investment, are in default or the issuers of which are in bankruptcy.
      However, there can be no assurance that such events will not occur after
      the Funds purchase a particular security, in which case the Funds may
      experience losses and incur costs.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junk bonds
      frequently have call or redemption features that would permit an issuer
      to repurchase the security from the Funds. If a call were exercised by
      the issuer during a period of declining interest rates, the Funds are
      likely to have to replace such called security with a lower yielding
      security, thus decreasing the net investment income to the Funds and
      dividends to shareholders.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Junk bonds and
      high-yield Corporate Loans tend to be more volatile than higher-rated
      debt instruments, so that adverse economic events may have a greater
      impact on the prices of junk bonds and high-yield Corporate Loans than on
      high-rated debt instruments. Factors adversely affecting the market value
      of such securities are likely to affect adversely each Fund&#146;s net
      asset value.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Like higher-rated
      debt instruments, junk bonds and high-yield Corporate Loans generally are
      purchased and sold through dealers who make a market in such securities
      for their own accounts. However, there are fewer dealers in the junk bond
      and high-yield Corporate Loan markets, which markets may be less liquid
      than the market for higher-rated debt instruments, even under normal
      economic conditions. Also, there may be significant disparities in the
      prices quoted for junk bonds and high-yield Corporate Loans by various
      dealers. As a result, during periods of high demand in the junk bond and
      high-yield Corporate Loan markets, it may be difficult to acquire junk
      bonds and high-yield Corporate Loans appropriate for investment by the
      Funds. Adverse economic conditions and investor perceptions thereof
      (whether or not based on economic fundamentals) may impair liquidity in
      the junk bond and high-yield Corporate Loan markets and may cause the
      prices each Fund receives for its junk bonds and high-yield Corporate
      Loans to be reduced. In addition, each Fund may experience difficulty in
      liquidating a portion of its portfolio when necessary to meet each
      Fund&#146;s liquidity needs or in response to a specific economic event
      such as deterioration in the creditworthiness of the issuers. Under such
      conditions, judgment may play a greater role in valuing certain of each
      Fund&#146;s portfolio instruments than in the case of instruments trading
      in a more liquid market. In addition, each Fund may incur additional
      expense to the extent that it is required to seek recovery upon a default
      on a portfolio holding or to participate in the restructuring of the
      obligation.</FONT></DIV>

    <DIV ALIGN="left">


    </DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
    <A NAME="tx8"></A>
    Distressed Securities</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left">


    </DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies
      may invest up to 35% and Debt Strategies II and Debt Strategies III may
      invest up to 20% of their respective total assets in Distressed
      Securities. Distressed Securities are high yield/high risk securities,
      including Corporate Loans purchased in the secondary market, which are
      the subject of bankruptcy proceedings or otherwise in default as to the
      repayment of principal and/or payment of interest at the time of
      acquisition by each Fund or are rated in the lower rating categories (Ca
      or lower by Moody&#146;s and CC or lower by S&amp;P) or which, if
      unrated, are in the judgment of FAM of equivalent quality. Investment in
      Distressed Securities is speculative and involves significant risk.
      Distressed Securities frequently do not produce income while they are
      outstanding and may require each Fund to bear certain extraordinary
      expenses in order to protect and recover its investment. Therefore, to
      the extent each Fund pursues its secondary objective of capital
      appreciation through investment in Distressed Securities, each
      Fund&#146;s ability to achieve current income for its stockholders may be
      diminished. Each Fund also will be subject to significant uncertainty as
      to when and in what manner and for what value the obligations evidenced
      by the Distressed Securities will eventually be satisfied; e.g., through
      a liquidation of the obligor&#146;s assets, an exchange offer or plan of
      reorganization involving the Distressed Securities or a payment of some
      amount in satisfaction of the obligation. In addition, even if an
      exchange offer is made or plan of reorganization is adopted with respect
      to Distressed Securities held by each Fund, there can be no assurance
      that the securities or other assets received by each Fund in connection
      with such exchange offer or plan of reorganization will not have a lower
      value or income potential than may have been anticipated when the
      investment was made. Moreover, any securities received by each Fund upon
      completion of an exchange offer or plan of reorganization may be
      restricted as to resale. As a result of each Fund&#146;s participation in
      negotiations with respect to any exchange offer or plan of reorganization
      with respect to an issuer of Distressed Securities, each Fund may be
      restricted from disposing of such securities.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx9"></A>
    Leverage</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left">


    </DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The use of
      leverage by each Fund creates an opportunity for increased net income and
      capital appreciation for the Common Stock, but, at the same time, creates
      special risks. Each Fund intends to utilize leverage to provide the
      holders of Common Stock with a potentially higher return. Leverage
      creates risks for holders of Common Stock, including the likelihood of
      greater volatility of net asset value and market price of shares of the
      Common Stock, and the risk that fluctuations in interest rates on
      borrowings and short-term debt or in the dividend rates on any preferred
      stock may affect the return to holders of Common Stock. To the extent the
      income or capital appreciation derived from securities purchased with
      funds received from leverage exceeds the cost of leverage, each
      Fund&#146;s return will be greater than if leverage had not been used.
      Conversely, if the income or capital appreciation from the securities
      purchased with such funds is not sufficient to cover the cost of
      leverage, the return to each Fund will be less than if leverage had not
      been used, and therefore the amount available for distribution to
      stockholders as dividends and other distributions will be reduced. In the
      latter case, FAM in its best judgment may nevertheless determine to
      maintain each Fund&#146;s leveraged position if it expects that the
      benefits to each Fund&#146;s stockholders of maintaining the leveraged
      position will outweigh the current reduced return. Certain types of
      borrowings by each Fund may result in each Fund being subject to
      covenants in credit agreements relating to asset coverage and portfolio
      composition requirements. Each Fund may be subject to certain
      restrictions on investments imposed by guidelines of one or more
      nationally recognized statistical ratings organization which may issue
      ratings for the short-term corporate debt securities or preferred stock
      issued by each Fund. These covenants and guidelines may impose asset
      coverage or portfolio composition requirements that are more stringent
      than those imposed by the Investment Company Act. It is not anticipated
      that these covenants or guidelines will impede FAM from managing each
      Fund&#146;s portfolio in accordance with each Fund&#146;s investment
      objectives and policies. Each Fund at times may borrow from affiliates of
      FAM, provided that the terms of such borrowings are no less favorable
      than those available from comparable sources of funds in the marketplace.
      The fee paid to FAM will be calculated on the basis of each Fund&#146;s
      assets including proceeds from borrowings for leverage and the issuance
      of preferred stock.</FONT></DIV>

    <DIV ALIGN="left">


    </DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
    <A NAME="tx10"></A>
    Other Investment Management Techniques</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may use
      various other investment management techniques that also involve special
      considerations, including engaging in interest rate transactions,
      utilization of options and futures transactions, utilization of foreign
      currency swaps, making forward commitments and lending its portfolio
      securities.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx11"></A>
    Non-U.S. Securities</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left">


    </DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      invest up to 20% of its total assets in financial instruments of issuers
      domiciled outside the United States or that are denominated in various
      foreign currencies and multinational foreign currency units, provided
      that the foreign issuers of any non-U.S. dollar denominated instruments
      purchased by each Fund are domiciled in a country that is a member of the
      Organization For Economic Co-operation and Development
      (&#147;OECD&#148;). Investing in securities issued by non-U.S. issuers
      involves certain special risks not typically involved in U.S.
      investments, including fluctuations in foreign exchange rates, future
      political and economic developments, the possible imposition of exchange
      controls or other foreign or U.S. governmental laws or restrictions
      applicable to such loans. With respect to certain countries, there is the
      possibility of expropriation or confiscatory taxation, political or
      social instability, currency devaluations, or diplomatic developments
      which could affect each Fund&#146;s investments in those financial
      instruments. Moreover, an individual country&#146;s economy may differ
      favorably or unfavorably from the U.S. economy in such respects as, but
      not limited to, growth of gross national product, rate of inflation,
      capital reinvestment, resource self-sufficiency and balance of payments
      position. In addition, information with respect to non-U.S. issuers may
      differ from that available with respect to U.S. issuers, since non-U.S.
      issuers are not generally subject to uniform accounting, auditing and
      financial reporting standards, practices and requirements comparable to
      those applicable to U.S. issuers. Each Fund does not currently intend to
      hedge its non-U.S. dollar denominated portfolio investments.
      Additionally, each Fund may invest in Corporate Loans made to U.S.
      borrowers with significant non-dollar denominated revenues.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx12"></A>
    Concentration in Financial Institutions</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of
      each Fund&#146;s investment in Corporate Loans, each Fund may be deemed
      to be concentrated in securities of issuers in the industry group
      consisting of financial institutions and their holding companies,
      including commercial banks, thrift institutions, insurance companies and
      finance companies. Consequently, each Fund is subject to certain risks
      associated with such institutions, including, among other things, changes
      in governmental regulation, interest rate levels and general economic
      conditions.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx13"></A>
    Illiquid Securities</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      invest in securities that lack an established secondary trading market or
      are otherwise considered illiquid. Some or all of the Corporate Loans in
      which each Fund invests may be considered to be illiquid. Liquidity of a
      security relates to the ability to easily dispose of the security and the
      price to be obtained and does not generally relate to the credit risk or
      likelihood of receipt of cash at maturity. Illiquid corporate bonds,
      loans and notes may trade at a discount from comparable, more liquid
      investments.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx14"></A>
    Antitakeover Provisions</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Articles of
      Incorporation, as amended, of each Fund (in each case the
      &#147;Charter&#148;) include provisions that could limit the ability of
      other entities or persons to acquire control of that Fund or to change
      the composition of its Board of Directors. Such provisions could
      discourage a third party from seeking to obtain control of a
      Fund.</FONT></DIV>
    <DIV ALIGN="left">


    </DIV>
    <DIV><FONT
    SIZE="6">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B><I>
    <A NAME="tx15"></A>
    AGREEMENT AND PLAN OF MERGER</B></I></FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx16"></A>
    General</B></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the
      Agreement and Plan of Merger (attached hereto as Exhibit II):</FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
      SIZE="2" COLOR="#000000" FACE="Wingdings">&#159;</FONT><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">each of Debt
        Strategies and Debt Strategies III will be merged with and into Debt
        Strategies II in accordance with Maryland law;</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> </FONT><FONT
      SIZE="2" COLOR="#000000" FACE="Wingdings">&#159;</FONT><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">the separate
        existence of each of Debt Strategies and Debt Strategies III will
        cease;</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
      SIZE="2" COLOR="#000000" FACE="Wingdings">&#159;</FONT><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        II will be the surviving corporation;</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
      SIZE="2" COLOR="#000000" FACE="Wingdings">&#159;</FONT><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        II will change its name to Debt Strategies Fund, Inc. immediately after
        the Effective Date (as defined below);</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
      SIZE="2" COLOR="#000000" FACE="Wingdings">&#159;</FONT><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">each share of
        Common Stock of each of Debt Strategies and Debt Strategies III will be
        converted into the right to receive an equivalent dollar amount (to the
        nearest one ten-thousandth of one cent) of full shares of Debt
        Strategies II Common Stock, plus cash in lieu of any fractional shares,
        computed based on the net asset value per share of each Fund on the
        Effective Date (as defined below), all upon and subject to the terms
        hereinafter set forth; and</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT><FONT
      SIZE="2" COLOR="#000000" FACE="Wingdings">&#159;</FONT><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">the currently
        issued and outstanding shares of Debt Strategies II will remain issued
        and outstanding.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming the
      stockholders of each Fund approve the Merger, the Funds will collectively
      file the Articles of Merger (attached hereto as Exhibit II) with the
      Maryland State Department of Assessments and Taxation. The Merger will
      become effective on the Effective Date, which is the date the Articles of
      Merger are accepted for filing or the date specified in the Articles of
      Merger. Thereafter, each Acquired Fund will terminate its registration
      under the Investment Company Act of 1940.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No sales charge or
      fee of any kind will be charged to either Acquired Fund&#146;s
      stockholders in connection with their receipt of Debt Strategies II
      Common Stock in the Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accordingly, as a
      result of the Merger, every holder of Common Stock of an Acquired Fund
      would own shares of Debt Strategies II Common Stock that (except for cash
      payments received in lieu of fractional shares) would have an aggregate
      net asset value immediately after the Effective Date equal to the
      aggregate net asset value of that stockholder&#146;s Common Stock
      immediately prior to the Effective Date. Since the Debt Strategies II
      Common Stock would be issued at net asset value and the shares of Common
      Stock of the Acquired Funds would be valued at net asset value for the
      purposes of the exchange, the holders of Common Stock of the Funds will
      not be diluted as a result of the Merger. However, as a result of the
      Merger, a stockholder of any Fund likely will hold a reduced percentage
      of ownership in the Surviving Fund than he or she held in Debt
      Strategies, Debt Strategies II or Debt Strategies III.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx17"></A>
    Procedure</B></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In deciding to
      recommend the Merger, the Boards of Directors of Debt Strategies, Debt
      Strategies II, and Debt Strategies III took into account the investment
      objective and policies of each Fund, as well as the management
      arrangements of each Fund, the expenses incurred both due to the Merger
      and on an ongoing basis by the new and existing stockholders of Debt
      Strategies II and the potential benefits, including economies of scale,
      to each Fund&#146;s stockholders as a result of the Merger. The Board of
      Directors of each Fund, including all of the Directors who are not
      &#147;interested persons,&#148; as defined in the Investment Company Act,
      have determined that the Merger is in the best interests of the
      stockholders of Debt Strategies, Debt Strategies II and Debt Strategies
      III and that the interests of such stockholders will not be diluted or
      otherwise adversely affected as a result of the Merger. The Board of
      Directors of Debt Strategies, Debt Strategies II and Debt Strategies III
      generally considered the following factors in evaluating whether to
      approve the Merger: (i) the terms and conditions of the Merger and the
      anticipated effect of the Merger on per share expenses and costs of the
      Funds; (ii) whether the Merger would achieve economies of scale for the
      Funds and benefit stockholders by promoting more efficient operations;
      (iii) whether the interests of the Funds&#146; stockholders will be
      diluted as a result of the proposed transactions contemplated by the
      Merger; (iv) the relative, comparative past investment performance of the
      Funds; (v) the future prospects of the Funds if the Merger is effected
      and if the Merger is not effected; (vi) whether the investment
      objectives, policies and restrictions of the Funds are compatible; (vii)
      the service features available to stockholders in the Funds; (viii)
      whether the Merger will result in the recognition of any gain or loss for
      Federal income tax purposes to the Funds or to the stockholders of the
      Funds; and (ix) alternatives to the Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As a result of such Board
      approvals, the Funds have jointly filed this Joint Proxy Statement and
      Prospectus with the SEC soliciting a vote of the stockholders of each
      Fund to approve the Merger. The costs of such solicitation are to be paid
      by Debt Strategies II after the Merger so as to be borne equally and
      exclusively on a per share basis by the holders of Common Stock of each
      Fund. Annual meetings of stockholders of each Fund will be held on August
      23, 2000. If the stockholders of all three Funds approve the Merger, the
      Merger will take place as soon as practicable after such approval,
      provided that the applicable waiting period under the Hart-Scott-Rodino
      Antitrust Improvements Act of 1976 has expired or been terminated and the
      Funds have obtained prior to that time an opinion of counsel relating to
      the tax-free treatment of the transaction.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Boards of
      Directors of Debt Strategies, Debt Strategies II and Debt Strategies III
      recommend that the stockholders of the respective Funds approve the
      Agreement and Plan of Merger.</B></FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx18"></A>
    Terms of the Agreement and Plan of Merger</B></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
      is a summary of the significant terms of the Agreement and Plan of
      Merger. This summary is qualified in its entirety by reference to the
      Agreement and Plan of Merger, attached hereto as Exhibit
      II.</I></FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;Conversion to Debt Strategies II Common
      Stock</I></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the Effective
      Date, each share of Common Stock of each of the Acquired Funds will be
      converted into the right to receive an equivalent dollar amount (to the
      nearest one ten-thousandth of one cent) of full shares of Debt Strategies
      II Common Stock plus cash in lieu of any fractional shares, computed
      based on the net asset value per share of each Fund on the Effective
      Date. Shares of Debt Strategies II Common Stock issued and outstanding as
      of the Effective Date will remain issued and outstanding and in the same
      number. The net asset value per share of each Fund shall be determined as
      of the Effective Date, and no formula will be used to adjust the net
      asset value so determined of a Fund to take into account differences in
      realized and unrealized gains and losses. The value of the assets of the
      Acquired Funds to be transferred to Debt Strategies II shall be
      determined by Debt Strategies II pursuant to the procedures utilized by
      Debt Strategies II in valuing its own assets and determining its own
      liabilities for purposes of the Merger. Such valuation and determination
      shall be made by Debt Strategies II in cooperation with the Acquired
      Funds and shall be confirmed in writing by Debt Strategies II to the
      Acquired Funds. The net asset value per share of Debt Strategies II
      Common Stock shall be determined in accordance with such procedures, and
      Debt Strategies II shall certify the computations involved. Debt
      Strategies II shall issue to the stockholders of the Acquired Funds
      separate certificates or share deposit receipts for the Debt Strategies
      II Common Stock by delivering the certificates or share deposit receipts
      evidencing ownership of the Debt Strategies II Common Stock to The Bank
      of New York, as the transfer agent and registrar for Debt Strategies II
      Common Stock. With respect to any Acquired Fund stockholder holding
      certificates evidencing ownership of Common Stock of the Acquired Fund as
      of the Effective Date, and subject to Debt Strategies II being informed
      thereof in writing by the Acquired Fund, Debt Strategies II will not
      permit such stockholder to receive new certificates evidencing ownership
      of the Debt Strategies II Common Stock, exchange
    <BR>
    Common Stock credited to such stockholder&#146;s account for shares of
      other investment companies managed by MLIM or any of its affiliates, or
      pledge or redeem such Debt Strategies II Common Stock, in any case, until
      such stockholder has surrendered his or her outstanding certificates
      evidencing ownership of the Common Stock of the Acquired Fund or, in the
      event of lost certificates, posted adequate bond. Each of the Acquired
      Funds, at its own expense, will request its stockholders to surrender
      their outstanding certificates evidencing ownership of the Common Stock
      of the Acquired Funds or post adequate bond therefor.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No fractional
      shares of Debt Strategies II Common Stock will be issued to the Acquired
      Funds&#146; stockholders. In lieu thereof, Debt Strategies II&#146;s
      transfer agent, The Bank of New York, will aggregate all fractional
      shares of Debt Strategies II and sell the resulting whole shares on the
      NYSE at the current market price for shares of Debt Strategies II for the
      account of all holders of fractional interests, and each such holder will
      receive such holder&#146;s pro rata share of the proceeds of such sale,
      without interest, upon surrender of such holder&#146;s Debt Strategies II
      Common Stock certificates. Although receipt of full shares in the Merger
      will not result in taxable gain or loss to the stockholder, his or her
      receipt of the proceeds of the sale of fractional shares may result in a
      small taxable gain or loss.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">


      <I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Expenses.&nbsp;
      &nbsp;&nbsp;&nbsp;</I>Debt Strategies II shall pay, subsequent to the
      Effective Date, all expenses incurred in connection with the Merger
      including but not limited to, all costs related to the preparation and
      distribution of materials distributed to each Fund&#146;s Board of
      Directors, expenses incurred in connection with the preparation of the
      Agreement and Plan of Merger, a registration statement on Form N-14, SEC
      and state securities commission filing fees and legal and audit fees in
      connection with the Merger, costs of printing and distributing this Joint
      Proxy Statement and Prospectus, legal fees incurred preparing each
      Fund&#146;s board materials, attending each Fund&#146;s board meetings
      and preparing the minutes for such board meetings, accounting fees
      associated with each Fund&#146;s financial statements, stock exchange
      fees, portfolio transfer taxes (if any) and any similar expenses incurred
      in connection with the Merger. In this regard, expenses of the Merger
      will be deducted from the assets of the Surviving Fund so as to be borne
      equally and exclusively on a per share basis by the holders of Common
      Stock of each of the Funds. No Fund shall pay any expenses of its
      stockholders arising out of or in connection with the Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Required
      Approvals.&nbsp;&nbsp;&nbsp;&nbsp;</I>Under the Charter of each Fund,
      applicable Maryland law and the rules of the NYSE, stockholder approval
      of the Agreement and Plan of Merger requires the affirmative vote of
      stockholders representing more than 50% of the outstanding shares of
      Common Stock of a Fund. Because of the requirement that the Agreement and
      Plan of Merger be approved by the stockholders of all three Funds, the
      Merger will not take place if the stockholders of any one Fund do not
      approve the Agreement and Plan of Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deregistration
      and Dissolution.&nbsp;&nbsp;&nbsp;&nbsp;</I>Following the Merger, the
      Acquired Funds will terminate their registration under the Investment
      Company Act. Moreover, as a result of the Merger, the separate existence
      of the Acquired Funds will cease. Expenses incurred in connection with
      the deregistration and winding up of operations of the Acquired Funds
      will be paid by the Surviving Fund following the Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendments and
      Conditions.&nbsp;&nbsp;&nbsp;&nbsp;</I>The Agreement and Plan of Merger
      may be amended at any time prior to the Effective Date with respect to
      any of the terms therein. The obligations of each Fund pursuant to the
      Agreement and Plan of Merger are subject to various conditions, including
      a registration statement on Form N-14 being declared effective by the
      SEC, approval by the stockholders of each Fund as described above, an
      opinion of counsel being received with respect to tax matters, an opinion
      of counsel as to securities matters being received, expiration or
      termination of the applicable waiting period under the Hart-Scott-Rodino
      Antitrust Improvements Act of 1976, the continuing accuracy of various
      representations and warranties of the Funds being confirmed by the
      respective parties and the refinancing of the outstanding credit
      facilities of all three Funds in a principal amount approximately equal
      to the aggregate commitment amount of the currently outstanding credit
      facilities.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Postponement,
      Termination.&nbsp;&nbsp;&nbsp;&nbsp;</I>Under the Agreement and Plan of
      Merger, the Board of Directors of any Fund may cause the Merger to be
      postponed or abandoned under certain circumstances should such Board
      determine that it is in the best interests of the stockholders of its
      respective Fund to do so. The Agreement and Plan of Merger may be
      terminated, and the Merger abandoned at any time (whether before or after
      adoption thereof by the stockholders of any Fund) prior to the Effective
      Date, or the Effective Date may be postponed: (i) by mutual consent of
      the Boards of Directors of the three Funds and (ii) by the Board of
      Directors of any Fund if any condition to that Fund&#146;s obligations
      set forth in the Agreement and Plan of Merger has not been fulfilled or
      waived by such Board.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx19"></A>
    Potential Benefits to Stockholders of the Funds as a Result of the
      Merger</B></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In approving the
      Merger, the Board of Directors of each Fund identified certain benefits
      that are likely to result from the Merger, including lower aggregate
      operating expenses per share (excluding leverage) of Common Stock,
      greater efficiency and flexibility in portfolio management and a more
      liquid trading market for the shares of Common Stock of the Surviving
      Fund. With respect to each Acquired Fund, following the Merger their
      respective stockholders will remain invested in a closed-end fund that
      has investment objectives and policies substantially similar to those of
      the Acquired Fund. The Boards also considered the possible risks and
      costs of




    combining the Funds. The Boards noted the many similarities between the
      Funds, including their substantially similar investment objectives and
      investment policies, their use of substantially the same management
      personnel and their similar portfolios. The Boards also considered the
      relative tax positions of the portfolios of the Funds. As of February 29,
      2000, each Fund had undistributed net realized capital losses and net
      unrealized capital losses, with Debt Strategies II and Debt Strategies
      both having significant net realized and unrealized capital losses. As a
      result of the Merger and subject to certain limitations, the stockholders
      of each Fund may benefit from the ability of the Surviving Fund to use
      the net realized capital losses of another Fund to offset future net
      realized capital gains of the Surviving Fund, if any.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Surviving Fund
      that would result from the Merger would have a larger asset base than any
      of the Funds has currently. Based on data presented by FAM, the Board of
      Directors of each Fund believes that administrative expenses for the
      Surviving Fund would be less than the aggregate expenses for the
      individual Funds, resulting in a lower expense ratio for common
      stockholders of the Surviving Fund and higher earnings per common share.
      In particular, certain fixed costs, such as costs of printing stockholder
      reports and proxy statements, legal expenses, audit fees, mailing costs
      and other expenses will be spread across a larger asset base, thereby
      lowering the expense ratio for the Surviving Fund.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <BR>

    <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
     <TR>
      <TH VALIGN="bottom" ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Approximate
        Net
      <BR>
      Assets as of
      <BR>
      February 29, 2000
      <BR>
      (in millions)</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Total
        Annualized
      <BR>
      Operating
      <BR>
      Expense Ratio
      <BR>
      (excluding leverage)</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Total
        Annualized
      <BR>
      Operating
      <BR>
      Expense Ratio
      <BR>
      (including leverage)*</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="301" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
        Strategies</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$226.5</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.94%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.14%</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="301" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        II</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$538.3</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.77%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.89%</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="301" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        III</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$103.1</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.97%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.52%</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="301" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Surviving
        Fund</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$867.9</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.73%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.92%</FONT></TD>
     </TR>
    </TABLE>


    <BR>
    <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="2%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">*</FONT></DIV>
      </TD>
      <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">The annualized
        operating expenses attributable to leverage for each of the Funds
        equals the interest owed over a projected 12 month period based on the
        amount of outstanding borrowings for each of the Funds as of February
        29, 2000. As of February 29, 2000, the amount of outstanding borrowings
        for each of the Funds as a percentage of net assets was Debt Strategies
        (30.9%), Debt Strategies II (29.9%) and Debt Strategies III (35.9%).
        The annualized operating expenses attributable to leverage for the
        Surviving Fund equals the sum of each of the Fund&#146;s projected
        leverage costs based on the amount of outstanding borrowings for each
        of the Funds as of February 29, 2000. The actual operating expenses
        attributable to leverage for the Surviving Fund will be dependent on
        the amount of leverage used by the Surviving Fund and the interest rate
        to be paid on such borrowings.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the Merger,
      on a pro forma basis, the total annualized operating expenses of the
      Surviving Fund as a percent of net assets would be:</FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;
        &nbsp;0.21% lower than Debt Strategies&#146; total annualized operating
        expense ratio when leverage is not included and 0.22% lower when
        leverage is included;</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;
        &nbsp;0.04% lower than Debt Strategies II&#146;s total annualized
        operating expense ratio when leverage is not included and 0.03% higher
        when leverage is included (this increase of 0.03% is the result of the
        higher leverage percentage of Debt Strategies and Debt Strategies III
        as of February 29, 2000 and the related costs of such leverage);
        and</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;
        &nbsp;0.24% lower than Debt Strategies III&#146;s total annualized
        operating expense ratio when leverage is not included and 0.60% lower
        when leverage is included.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the
      foregoing, the Boards concluded that the Merger is in the best interests
      of the stockholders of each Fund because the Merger presents no
      significant risks or costs (including legal, accounting and
      administrative costs) that would outweigh the potential benefits
      discussed above.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In approving the
      Merger, the Boards determined that the Merger is in the best interests of
      each Fund and, with respect to net asset value, that the interests of
      existing stockholders of each Fund would not be diluted as a result of
      the Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

    <B>
    <A NAME="tx20"></A>
    Surrender and Exchange of Stock Certificates</B></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the
      Effective Date, each holder of an outstanding certificate or certificates
      formerly representing shares of Common Stock of any Acquired Fund will be
      entitled to receive, upon surrender of his or her certificate or
      certificates, a certificate or certificates representing the number of
      shares of Debt Strategies II Common Stock distributable with respect to
      such holder&#146;s shares of Common Stock of the Acquired Fund, together
      with cash in lieu of any fractional shares of Common Stock. Promptly
      after the Effective Date, the transfer agent for the Debt Strategies II
      Common Stock will mail to each holder of certificates formerly
      representing shares of Common Stock of an Acquired Fund a letter of
      transmittal for use in surrendering his or her certificates for
      certificates representing shares of Debt Strategies II Common Stock and
      cash in lieu of any fractional shares of Common Stock.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <BR>

    <TABLE ALIGN="center" WIDTH="485" CELLSPACING=0 CELLPADDING=0>
     <TR>
      <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>If Prior To
        The Merger You Held:</B></FONT><FONT
      SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>After The
        Merger, You Will Hold:</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="280" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        Common Stock</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        II Common Stock*</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="280" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        II Common Stock</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        II Common Stock*</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="280" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        III Common Stock</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        II Common Stock*</FONT></TD>
     </TR>
    </TABLE>


    <BR>
    <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="2%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">*</FONT></DIV>
      </TD>
      <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">In connection
        with the Merger, the Surviving Fund will change its name to Debt
        Strategies Fund, Inc. immediately following the Effective
        Date.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><B><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please do
      not send in any stock certificates at this time. Upon consummation of the
      Merger, common stockholders of the Acquired Funds will be furnished with
      instructions for exchanging their stock certificates for Debt Strategies
      II stock certificates and, if applicable, cash in lieu of fractional
      shares.</B></I></FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From and after the
      Effective Date, certificates formerly representing shares of Common Stock
      of an Acquired Fund will be deemed for all purposes to evidence ownership
      of the number of full shares of Debt Strategies II Common Stock
      distributable with respect to the shares of the Acquired Fund held before
      the Merger as described above and as shown in the table above, provided
      that, until such stock certificates have been so surrendered, no
      dividends payable to the holders of record of Common Stock of an Acquired
      Fund as of any date subsequent to the Effective Date will be paid to the
      holders of such outstanding stock certificates. Dividends payable to
      holders of record of shares of Common Stock of Debt Strategies II as of
      any date after the Effective Date and prior to the exchange of
      certificates by any stockholder of an Acquired Fund, will be paid to such
      stockholder, without interest, at the time such stockholder surrenders
      his or her stock certificates for exchange.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From and after the
      Effective Date, there will be no transfers on the transfer books of any
      Acquired Fund. If, after the Effective Date, certificates representing
      shares of Common Stock of an Acquired Fund are presented to Debt
      Strategies II, they will be canceled and exchanged for certificates
      representing Common Stock of Debt </FONT></DIV>



    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Strategies II and
      cash in lieu of fractional shares of Debt Strategies II Common Stock, if
      any, distributable with respect to such Common Stock in the
      Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx21"></A>
    Tax Consequences of the Merger</B></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General.
      &nbsp;&nbsp;&nbsp;&nbsp;</I>The Merger has been structured with the
      intention that it qualify for Federal income tax purposes as a tax-free
      reorganization under Section 368(a)(1)(A) of the Code. Each Fund has
      elected and qualified for the special tax treatment afforded RICs under
      the Code, and Debt Strategies II intends to continue to so qualify after
      the Merger. The Funds will each receive an opinion from counsel to the
      effect that for Federal income tax purposes: (i) the Merger, as described
      above, will constitute a reorganization within the meaning of Section
      368(a)(1)(A) of the Code, and each Acquired Fund and Debt Strategies II
      will be deemed a &#147;party&#148; to a reorganization within the meaning
      of Section 368(b) of the Code; (ii) in accordance with Section 361(a) of
      the Code, no gain or loss will be recognized to the Acquired Funds as a
      result of the Merger or on the distribution of Debt Strategies II Common
      Stock to the respective stockholders of the Acquired Funds under Section
      361(c)(1) of the Code; (iii) under Section 1032 of the Code, no gain or
      loss will be recognized to Debt Strategies II as a result of the Merger;
      (iv) in accordance with Section 354(a)(1) of the Code, no gain or loss
      will be recognized to the stockholders of the Acquired Funds on the
      conversion of their shares into Debt Strategies II Common Stock




    (except to the extent that common stockholders receive cash representing an
      interest in fractional shares of Debt Strategies II Common Stock in the
      Merger); (v) in accordance with Section 362(b) of the Code, the tax basis
      of the assets of the Acquired Funds in the hands of Debt Strategies II
      will be the same as the tax basis of such assets in the hands of the
      Acquired Fund that transferred them immediately prior to the consummation
      of the Merger; (vi) in accordance with Section 358 of the Code,
      immediately after the Merger, the tax basis of the Debt Strategies II
      Common Stock received by the stockholders of the Acquired Funds in the
      Merger will be equal to the tax basis of the Common Stock of the Acquired
      Fund converted pursuant to the Merger; (vii) in accordance with Section
      1223 of the Code, a stockholder&#146;s holding period for the Debt
      Strategies II Common Stock will be determined by including the period for
      which such stockholder held the Common Stock of the Acquired Fund
      converted pursuant to the Merger, provided that such shares were held as
      a capital asset; (viii) in accordance with Section 1223 of the Code, Debt
      Strategies II&#146;s holding period with respect to the Acquired
      Funds&#146; assets transferred will include the period for which such
      assets were held by the Acquired Fund; (ix) the payment of cash to common
      stockholders of an Acquired Fund in lieu of fractional shares of Debt
      Strategies II Common Stock will be treated as though the fractional
      shares were distributed as part of the Merger and then redeemed, with the
      result that such stockholders will have short- or long-term capital gain
      or loss to the extent that the cash distribution differs from the
      stockholder&#146;s basis allocable to the Debt Strategies II fractional
      shares; and (x) the taxable year of each Acquired Fund will end on the
      Effective Date of the Merger and pursuant to Section 381(a) of the Code
      and regulations thereunder, Debt Strategies II will succeed to and take
      into account certain tax attributes of the Acquired Funds, such as
      earnings and profits, capital loss carryovers and method of
      accounting.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although, under
      Section 381(a) of the Code, Debt Strategies II will succeed to and take
      into account certain tax attributes of the Acquired Funds, including, but
      not limited to, earnings and profits, any net operating loss carryovers,
      any capital loss carryovers and method of accounting, the Code, however,
      contains special limitations with regard to the use of net operating
      losses, capital losses and other similar items in the context of certain
      reorganizations, including tax-free reorganizations pursuant to Section
      368(a)(1)(A) of the Code, which could reduce the benefit of these
      attributes to Debt Strategies II.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stockholders
      should consult their tax advisers regarding the effect of the Merger in
      light of their individual circumstances. As the foregoing relates only to
      Federal income tax consequences, stockholders also should consult their
      tax advisers as to the foreign, state and local tax consequences of the
      Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Regulated
      Investment Company Status.&nbsp;&nbsp;&nbsp;&nbsp;</I>The Funds have
      elected and qualified for taxation as RICs under Sections 851-855 of the
      Code, and, after the Merger, Debt Strategies II intends to continue to so
      qualify.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx22"></A>
    Capitalization</B></FONT></DIV>

    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
      table sets forth as of February 29, 2000 (i) the capitalization of Debt
      Strategies, (ii) the capitalization of Debt Strategies II, (iii) the
      capitalization of Debt Strategies III and (iv) the capitalization of the
      Surviving Fund as adjusted to give effect to the Merger.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="center"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro Forma
      Capitalization of Debt Strategies, Debt Strategies II, Debt Strategies
      III</B></FONT></DIV>



    <DIV ALIGN="center"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>and Surviving
      Fund as of February 29, 2000</B></FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <BR>

    <TABLE ALIGN="center" WIDTH="612" CELLSPACING=0 CELLPADDING=0>
     <TR>
      <TH VALIGN="bottom" ALIGN="center" WIDTH="173"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></TH>
      <TH WIDTH="17"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="67"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
        Strategies</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="77"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
        Strategies II</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="82"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
        Strategies III</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro Forma
      <BR>
      Adjustment</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Surviving Fund
      <BR>
      as Adjusted(a)</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="173" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net
        Assets:</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="173" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net Assets
        Attributable
      <BR>
      to Common Stock</FONT></TD>
      <TD WIDTH="17"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$226,474,542</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="77"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$538,342,690</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="82"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$103,079,422</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="57"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">(9,219,114</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left" WIDTH="4"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="76"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$858,677,540</FONT></TD>
      <TD WIDTH="25"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="173" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Shares of Common
        Stock
      <BR>
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Outstanding</FONT></TD>
      <TD WIDTH="17"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">31,425,226</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="77"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">62,610,000</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="82"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">11,010,000</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="57"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">(4,113,068</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left" WIDTH="4"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">)</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="76"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">100,932,158</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left" WIDTH="25"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(b)</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="173" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Net Asset Value
        Per Share:</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="173" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;Common Stock</FONT></TD>
      <TD WIDTH="17"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="67"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.21</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="77"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.60</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="82"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.36</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="57"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&#151;&nbsp;&nbsp;</FONT></TD>
      <TD WIDTH="4"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></TD>
      <TD WIDTH="8"><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="76"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
        &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.51</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left" WIDTH="25"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(c)</FONT></TD>
     </TR>
    </TABLE>


    <BR>
    <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"> (a)</FONT></DIV>
      </TD>
      <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">The adjusted
        balances are presented as if the Merger had been consummated on
        February 29, 2000 and are for informational purposes only. Assumes
        distribution of undistributed net investment income and accrual of
        estimated Merger expenses of approximately $791,000. No assurance can
        be given about how many shares of Debt Strategies II Common Stock will
        be received by holders of Common Stock of Debt Strategies or Debt
        Strategies III on the Effective Date, and the foregoing should not be
        relied upon to reflect the number of shares of Debt Strategies II
        Common Stock that actually will be received on or after such
        date.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>



    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(b)</FONT></DIV>
      </TD>
      <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Assumes the
        issuance of 38,322,158 shares of Debt Strategies II Common Stock, in
        exchange for the net assets of each of Debt Strategies and Debt
        Strategies III. The estimated number of shares issued was based on the
        net asset value of each Fund, net of distributions, on February 29,
        2000.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>



    <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">(c)</FONT></DIV>
      </TD>
      <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Net Asset Value
        Per Share of Common Stock net of Merger-related expenses and
        distribution of undistributed net investment income of $5,195,536 for
        Debt Strategies II, $2,144,532 for Debt Strategies and $1,088,046 for
        Debt Strategies III.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To assist you in
      your consideration of the Merger, the following section provides a more
      detailed comparison of the Funds.</FONT></DIV>

    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx23"></A>
    Investment Objective and Policies</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The structure,
      organization and investment policies of the Funds are substantially
      similar. Each Fund seeks as a fundamental investment objective current
      income by investing primarily in a diversified portfolio of U.S.
      companies&#146; debt instruments, including Corporate Loans, which are
      rated in the lower rating categories of the established rating services
      (Baa or lower by Moody&#146;s or BBB or lower by S&amp;P) or unrated debt
      instruments which are in the judgment of the investment adviser of
      equivalent quality. <I>Such investments generally involve greater
      volatility of price and risks to principal and income than securities in
      the higher rating categories. </I>As a secondary objective, each Fund
      seeks capital appreciation. Up to 35% of the total assets of Debt
      Strategies and up to 20% of the total assets of Debt Strategies II and
      Debt Strategies III may be invested in Distressed Securities, which
      includes publicly offered or privately placed debt securities and
      Corporate Loans which, at the time of investment, are the subject of
      bankruptcy proceedings or otherwise in default as to the repayment of
      principal or payment of interest or are rated in the lowest rating
      categories (Ca or lower by Moody&#146;s and CC or lower by S&amp;P) or
      which, if unrated, are in the judgment of the investment adviser of
      equivalent quality. Up to 20% of each Fund&#146;s total assets may be
      invested in financial instruments of issuers domiciled outside the United
      States or that are denominated in various foreign currencies and
      multinational foreign currency units, provided that the foreign issuers
      of any non-U.S. dollar denominated instruments purchased by each Fund are
      domiciled in a country that is a member of OECD. Each Fund does not
      currently intend to hedge its non-U.S. dollar denominated portfolio
      investments. For these reasons, an investment in each Fund may be
      speculative in that it involves a high degree of risk and should not
      constitute a complete investment program. See &#147;Risk Factors and
      Special Considerations.&#148; Up to 20% of each Fund&#146;s total assets
      can be invested in convertible debt instruments and preferred stock, each
      of which may be converted into common stock or other securities of the
      same or a different issuer, and non-convertible preferred stock. As a
      result of conversions of convertible securities or upon an exchange offer
      or bankruptcy plan of reorganization, a significant portion of each
      Fund&#146;s total assets may be invested in common stock at certain
      points in time. Under normal market conditions, at least 65% of each
      Fund&#146;s total assets will be invested in debt instruments. Each
      Fund&#146;s investment objectives are fundamental policies and may not be
      changed without the approval of a majority of the outstanding voting
      securities of each Fund (as defined in the Investment Company Act). There
      can be no assurance that the investment objectives of each Fund will be
      realized.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund&#146;s
      investment policies permit investment in the following asset classes
      which are described in greater detail below: (i) senior and subordinated
      Corporate Loans, both secured and unsecured, issued either directly by
      the borrower or in the form of participation interests in Corporate Loans
      made by banks and other financial institutions; (ii) publicly offered and
      privately placed high-yield debt securities, senior and subordinated,
      both secured and unsecured; and (iii) convertible debt instruments and
      preferred stock, each of which may be converted into common stock or
      other securities of the same or a different issuer, and non-convertible
      preferred stock. The debt securities and Corporate Loans in which each
      Fund invests may pay interest at fixed rates or at rates that float at a
      margin above a generally recognized base lending rate such as the prime
      rate of a designated U.S. bank, or that adjust periodically at a margin
      above the CD rate or LIBOR.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subject to other
      investment restrictions applicable to each Fund, up to 10% of each
      Fund&#146;s assets may be invested in debt instruments, including
      Corporate Loans, of investment companies (which may or may not be
      registered under the Investment Company Act) whose portfolio securities
      consist entirely of (i) corporate debt or equity securities acceptable to
      each Fund&#146;s investment adviser or (ii) money market
      instruments.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under unusual
      market or economic conditions or for temporary or defensive or liquidity
      purposes, each Fund may invest up to 100% of its assets in securities
      issued or guaranteed by the U.S. Government or its instrumentalities or
      agencies, certificates of deposits, banker&#146;s acceptances, and other
      bank obligations, commercial paper rated in the highest category by a
      nationally recognized statistical rating organization or other
      fixed-income securities deemed by the investment adviser to be consistent
      with a defensive posture. The yield on such securities may be lower than
      the yield on lower-rated fixed-income securities.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although each Fund
      will invest primarily in lower-rated securities, other than with respect
      to Distressed Securities (which are discussed below) it will not invest
      in securities in the lowest rating categories (Ca or below by
      Moody&#146;s and CC or below by S&amp;P) unless the investment adviser
      believes that the financial condition of the issuer or the protection
      afforded to the particular securities is stronger than would otherwise be
      indicated by such low ratings.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund&#146;s
      investment philosophy is based on the belief that, under varying economic
      and market conditions, certain debt instruments will perform better than
      other debt instruments. Each Fund&#146;s fully managed approach puts
      maximum emphasis on the flexibility of the investment adviser to analyze
      various opportunities among debt instruments and to make judgments
      regarding which debt instruments provide, in the opinion of the
      investment adviser, the highest potential opportunity for current income
      and, secondarily, capital appreciation. This approach distinguishes each
      Fund from other funds which often seek either capital growth or current
      income or are restricted to fixed-rate securities or floating rate
      instruments. Consistent with this approach, when changing economic
      conditions and other factors cause the yield difference between
      lower-rated and higher-rated securities to narrow, each Fund may purchase
      higher-rated securities if the investment adviser believes that the risk
      of loss of income and principal may be substantially reduced with only a
      relatively small reduction in yield.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in the
      Common Stock of each Fund offers the individual investor several
      potential benefits. First, each Fund offers the opportunity to
      participate in a portfolio which may contain investments, such as
      Corporate Loans, that historically have been available mainly to
      institutional investors. In managing such a portfolio, the investment
      adviser provides professional management which includes the extensive
      credit analysis needed to invest in Corporate Loans, junk bonds and
      Distressed Securities. Each Fund also relieves the investor of the
      burdensome administrative details involved in managing a portfolio of
      such investments. Additionally, the investment adviser may seek to
      enhance the yield or capital appreciation of each Fund&#146;s Common
      Stock by leveraging each Fund&#146;s capital structure through the
      borrowing of money or the issuance of short-term debt securities or
      shares of preferred stock. These benefits are at least partially offset
      by the expenses involved in running an investment company. Such expenses
      primarily consist of advisory fees and operational costs. The use of
      leverage also involves certain expenses and risk
      considerations.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      engage in various portfolio strategies to seek to increase its return and
      to hedge its portfolio against movements in interest rates or foreign
      currencies through the use of interest rate or foreign currency swap
      transactions, the purchase of call and put options on securities, the
      sale of covered call and put options on its portfolio securities and
      transactions in financial futures and related options on such futures.
      Each of these portfolio strategies is described below. There can be no
      assurance that each Fund will employ these strategies or that, if
      employed, they will be effective.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      invest in, among other things, the types of instruments described
      below:</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx24"></A>
    Description of Corporate Loans</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Corporate
      Loans in which each Fund may invest generally consist of direct
      obligations of a borrower undertaken to finance the growth of the
      borrower&#146;s business internally or externally, or to finance a capital
    restructuring. Corporate Loans may also include obligations of a borrower
      issued in connection with a restructuring or a bankruptcy. A significant
      portion of the Corporate Loans in which each Fund invests are highly
      leveraged loans, such as leveraged buy-out loans, leveraged
      recapitalization loans and other types of acquisition loans. Such
      Corporate Loans may be structured to include both term loans, which are
      generally fully funded at the time of each Fund&#146;s investment and
      revolving credit facilities, which would require each Fund to make
      additional investments in Corporate Loans as required under the terms of
      the credit facility. Such Corporate Loans may also include receivables
      purchase facilities, which are similar to revolving credit facilities
      secured by a borrower&#146;s receivables.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      invest in senior and subordinated Corporate Loans, both secured and
      unsecured. The Corporate Loans in which each Fund invests may be senior
      debt obligations of the borrower and may, in some instances, hold the
      most senior position in the capital structure of the borrower (i.e. not
      subordinated to other debt obligations in right of payment). Corporate
      Loans which are senior debt obligations of the borrower may be wholly or
      partially secured by collateral, or may be unsecured. However, even in
      the case of a secured Corporate Loan, upon an event of default the
      ability of a lender to have access to the collateral, if any, or
      otherwise recover its investment may be limited by bankruptcy and other
      insolvency laws. The collateral may decline subsequent to each
      Fund&#146;s investment in the Corporate Loan. Under certain
      circumstances, the collateral may be released with the consent of the
      syndicate of lenders and the lender which is administering the Corporate
      Loan on behalf of the syndicate (&#147;Agent Bank&#148;) or pursuant to
      the terms of the underlying credit agreement with the borrower. There is
      no assurance that the liquidation of the collateral would satisfy the
      borrower&#146;s obligations in the event of the nonpayment of scheduled
      interest or principal, or that the collateral could be readily
      liquidated. As a result, each Fund might not receive payments to which it
      is entitled and thereby may experience a decline in the value of the
      investment and possibly, its net asset value.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to
      senior and secured Corporate Loans, each Fund may invest in Corporate
      Loans which are unsecured and subordinated. A Corporate Loan which is
      unsecured is not supported by any specific pledge of collateral and
      therefore constitutes only a general obligation of the borrower. In
      addition to being unsecured a Corporate Loan in which each Fund may
      invest may be subordinate in right of payment to the senior debt
      obligations of the borrower. Upon a liquidation or bankruptcy of the
      borrower the senior debt obligations of the borrower are often required
      to be paid in full before the subordinated debt holders are permitted to
      receive any distribution on behalf of their claim. Distributions, if any,
      to subordinated debt holders in such situations may consist in whole or
      in part in non-income producing securities, including common stock.
      Accordingly, following an event of default or liquidation or bankruptcy
      of a borrower, there can be no assurance that the assets of the borrower
      will be sufficient to satisfy the claims of unsecured and subordinated
      debt holders or that such debt holders will receive income producing debt
      securities in satisfaction of their claims. As a result, each Fund might
      not receive payments to which it is entitled and thereby may experience a
      decline in the value of its investment and possibly, its net asset
      value.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Loans
      made in connection with highly leveraged transactions are subject to
      greater risks than other Corporate Loans in which each Fund may invest.
      These credit risks include a greater possibility of default or bankruptcy
      of the borrower, and the potential assertion that the pledging of
      collateral, if any, to secure the loan constituted a fraudulent
      conveyance or preferential transfer which can be nullified or
      subordinated to the rights of other creditors of the borrower under
      applicable law. Highly leveraged Corporate Loans may also be less liquid
      than other Corporate Loans.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rate of
      interest payable on floating or variable rate Corporate Loans is
      established as the sum of a base lending rate used by commercial lenders
      plus a specified margin. These base lending rates generally are the Prime
      Rate of a designated U.S. bank, London Interbank Offered Rate
      (&#147;LIBOR&#148;), the Certificate of Deposit (&#147;CD&#148;) rate or
      another base lending rate used by commercial lenders. The interest rate
      on Prime Rate-based Corporate Loans floats daily as the Prime Rate
      changes, while the interest rate on LIBOR-based and CD-based Corporate
      Loans is reset periodically, typically every 30 days to one year. Certain
      of the floating or variable rate Corporate Loans in which each Fund will
      invest may permit the borrower to select an interest rate reset period of
      up to one year. A portion of each Fund&#146;s portfolio may be invested
      in Corporate Loans with longer interest rate reset
    periods or fixed interest rates which are generally more susceptible to
      interest rate risks in the event of fluctuations in prevailing interest
      rates.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      receive and/or pay certain fees in connection with its investments in
      Corporate Loans. These fees are in addition to interest payments received
      and may include facility fees, commissions and prepayment penalty fees.
      When each Fund buys a Corporate Loan it may receive a facility fee and
      when it sells a Corporate Loan it may pay a facility fee. In certain
      circumstances, each Fund may receive a prepayment penalty fee on the
      prepayment of a Corporate Loan by a borrower. These fees are intended to
      adjust the yield on such Corporate Loans. In connection with the
      acquisition of Corporate Loans, each Fund may also acquire warrants and
      other debt or equity securities of the borrower or its affiliates. The
      acquisition of such securities will only be incidental to each
      Fund&#146;s purchase of an interest in a Corporate Loan.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In making an
      investment in a Corporate Loan, the investment adviser will consider
      factors deemed by it to be appropriate to the analysis of the borrower
      and the Corporate Loan. Such factors include financial ratios of the
      borrower such as pre-tax interest coverage, leverage ratios, and the
      ratios of cash flows to total debts and the ratio of tangible assets to
      debt. In its analysis of these factors, the investment adviser also will
      be influenced by the nature of the industry in which the borrower is
      engaged, the nature of the borrower&#146;s assets and the investment
      adviser&#146;s assessments of the general quality of the
      borrower.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A borrower also
      may be required to comply with various restrictive covenants contained in
      any loan agreement between the borrower and the lending syndicate
      (&#147;Corporate Loan Agreement&#148;). Such covenants, in addition to
      requiring the scheduled payment of interest and principal, may include
      restrictions on dividend payments and other distributions to
      stockholders, provisions requiring the borrower to maintain specific
      financial ratios or relationships and limits on total debt. In addition,
      a Corporate Loan Agreement may contain a covenant requiring the borrower
      to prepay the Corporate Loan with any excess cash flow. Excess cash flow
      generally includes net cash flow after scheduled debt service payments
      and permitted capital expenditures, among other things, as well as the
      proceeds from asset dispositions or sales of securities. A breach of
      covenant (after giving effect to any cure period) which is not waived by
      the Agent Bank and the lending syndicate normally is an event of
      acceleration, i.e., the Agent Bank has the right to call the outstanding
      Corporate Loan, generally at the request of the lending
      syndicate.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund has no
      restrictions on portfolio maturity, but it is anticipated that a majority
      of the Corporate Loans will have stated maturities ranging from five to
      ten years. However, such Corporate Loans usually will require, in
      addition to scheduled payments of interest and principal, the prepayment
      of the Corporate Loans from excess cash flow, as discussed above, and may
      permit the borrower to prepay at its election. The degree to which
      borrowers prepay Corporate Loans, whether as a contractual requirement or
      at their election, may be affected by general business conditions, the
      financial condition of the borrower and competitive conditions among
      lenders, among other factors. Accordingly, prepayments cannot be
      predicted with accuracy.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loans to non-U.S.
      borrowers or to U.S. borrowers with significant non-dollar-denominated
      revenues may provide for conversion of all or part of the loan from a
      dollar-denominated obligation into a foreign currency obligation at the
      option of the borrower.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx25"></A>
    Description of Participation Interests</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Loans in
      which each Fund may invest are typically originated, negotiated and
      structured by a syndicate of lenders (&#147;Co-Lenders&#148;) consisting
      of commercial banks, thrift institutions, insurance companies, finance
      companies or other financial institutions, one or more of which acts as
      Agent Bank. Co-Lenders may sell Corporate Loans to third parties called
      &#147;Participants.&#148; Each Fund may invest in a Corporate Loan either
      by participating as a Co-Lender at the time the loan is originated or by
      buying an interest in the Corporate Loan from a Co-Lender or a
      Participant. Co-Lenders and Participants interposed between each Fund and
      a borrower, together with Agent Banks, are referred to herein as
      &#147;Intermediate Participants.&#148;</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may invest in a
      Corporate Loan at origination as a Co-Lender or by purchasing a Corporate
      Loan from an Intermediate Participant by means of a novation, an
      assignment or a participation. In a novation, the Fund would assume all
      of the rights of the Intermediate Participant in a Corporate Loan,
      including the right to receive payments of principal and interest and
      other amounts directly from the borrower and to enforce its rights as
      lender directly against the borrower and would assume all of the
      obligations of the Intermediate Participant, including any obligation to
      make future advances to the borrower. As a result, therefore, each Fund
      would have the status of a Co-Lender. As an alternative, each Fund may
      purchase an assignment of all or a portion of an Intermediate
      Participant&#146;s interest in a Corporate Loan, in which case each Fund
      may be required generally to rely on the assigning lender to demand
      payment and enforce its rights against the borrower, but would otherwise
      be entitled to all of such lender&#146;s rights in the Corporate Loan.
      Each Fund also may purchase a participation in a portion of the rights of
      an Intermediate Participant in a Corporate Loan by means of a
      participation agreement with such Intermediate Participant. A
      participation in the rights of an Intermediate Participant is similar to
      an assignment in that the Intermediate Participant transfers to each Fund
      all or a portion of an interest in a Corporate Loan. Unlike an
      assignment, however, a participation does not establish any direct
      relationship between each Fund and the borrower. In such a case, each
      Fund would be required to rely on the Intermediate Participant that sold
      the participation not only for the enforcement of each Fund&#146;s rights
      against the borrower but also for the receipt and processing of payments
      due to each Fund under the Corporate Loan. Each Fund will not act as an
      Agent Bank, guarantor, sole negotiator or sole structurer with respect to
      a Corporate Loan.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because it may be
      necessary to assert through an Intermediate Participant such rights as
      may exist against the borrower, in the event that the borrower fails to
      pay principal and interest when due, each Fund may be subject to delay,
      expense and risks that are greater than those that would be involved if
      each Fund could enforce its rights directly against the borrower.
      Moreover, under the terms of the participation, each Fund may be regarded
      as a creditor of the Intermediate Participant (rather than of the
      borrower), so that each Fund may also be subject to the risk that the
      Intermediate Participant may become insolvent. Similar risks may arise
      with respect to the Agent Bank, as described below. Further, in the event
      of the bankruptcy or insolvency of the borrower, the obligation of the
      borrower to repay the Corporate Loan may be subject to certain defenses
      that can be asserted by such borrower as result of improper conduct by
      the Agent Bank or Intermediate Participant.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because each Fund
      will regard the issuer of a Corporate Loan as including the borrower
      under a Corporate Loan Agreement, the Agent Bank and any Intermediate
      Participant, each Fund may be deemed to be concentrated in securities of
      issuers in the industry group consisting of financial institutions and
      their holding companies, including commercial banks, thrift institutions,
      insurance companies and finance companies. As a result, each Fund is
      subject to certain risks associated with such institutions. Banking and
      thrift institutions are subject to extensive governmental regulations
      which may limit both the amounts and types of loans and other financial
      commitments which such institutions may make and the profitability of
      these institutions is largely dependent on the availability and cost of
      capital funds. In addition, general economic conditions are important to
      the operation of these institutions, with exposure to credit losses
      resulting from possible financial difficulties of borrowers potentially
      having an adverse effect. Insurance companies are also affected by
      economic and financial conditions and are subject to extensive government
      regulation, including rate regulations. Individual companies may be
      exposed to material risks, including reserve inadequacy.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In a typical
      Corporate Loan, the Agent Bank administers the terms of the Corporate
      Loan Agreement and is responsible for the collection of principal and
      interest and fee payments from the borrower and the apportionment of
      these payments to the credit of all investors which are parties to the
      Corporate Loan Agreement. Each Fund generally will rely on the Agent Bank
      or an Intermediate Participant to collect its portion of the payments on
      the Corporate Loan. Furthermore, each Fund will rely on the appropriate
      creditor remedies against the borrower. Typically, under Corporate Loan
      Agreements, the Agent Bank is given broad discretion in enforcing the
      Corporate Loan Agreement, and it is obliged to use only the same care it
      would use in the management of its own property. For these services the
      borrower compensates the Agent Bank. Such compensation may include
      special fees paid on structuring and funding the Corporate Loan and other
      fees paid on a continuing basis.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event that an
      Agent Bank becomes insolvent, or has a receiver, conservator, or similar
      official appointed for it by the appropriate bank regulatory authority or
      becomes a debtor in a bankruptcy proceeding, assets held by the Agent
      Bank under the Corporate Loan Agreement should remain available to
      holders of Corporate Loans. If, however, assets held by the Agent Bank
      for the benefit of each Fund are determined by an appropriate regulatory
      authority or court to be subject to the claims of the Agent Bank&#146;s
      general or secured creditors, each Fund might incur certain costs and
      delays in realizing payment on a Corporate Loan, or suffer a loss of
      principal and/or interest. In situations involving Intermediate
      Participants similar risks may arise, as described above.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intermediate
      Participants may have certain obligations pursuant to a Corporate Loan
      Agreement, which may include the obligation to make future advances to
      the borrower in connection with revolving credit facilities in certain
      circumstances. Each Fund currently intends to reserve against such
      contingent obligations by segregating sufficient investments in liquid
      instruments. Each Fund will not invest in Corporate Loans that would
      require each Fund to make any additional investments in connection with
      such future advances if such commitments would exceed 20% of each
      Fund&#146;s total assets or would cause each Fund to fail to meet the
      diversification requirements described under &#147;Investment Objectives
      and Policies.&#148;</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx26"></A>
    Description of High-Yield Securities</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      invest in high-yield corporate debt securities, including Corporate
      Loans, which are rated in the lower rating categories of the established
      rating services (Baa or lower by Moody&#146;s and BBB or lower by
      S&amp;P), or in unrated securities considered by the investment adviser
      to be of comparable quality. Securities rated below Baa by Moody&#146;s
      or below BBB by S&amp;P, and unrated securities of comparable quality,
      are commonly known as &#147;junk bonds.&#148;</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although
      high-yield securities can be expected to provide higher yields, such
      securities may be subject to greater market fluctuations and risk of loss
      of income and principal than lower-yielding, higher-rated fixed-income
      securities. As described under &#147;Risk Factors and Special
      Considerations,&#148; economic conditions and interest rate levels may
      impact significantly the values of high-yield securities. In addition,
      high-yield securities are often unsecured and subordinated obligations of
      the issuer. Accordingly, following an event of default or liquidation or
      bankruptcy of the issuer, each Fund might not receive payments to which
      it is entitled, or may receive distributions of non-income producing
      securities, including common stock, and thereby may experience a decline
      in the value of its investment and possibly its net asset
      value.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selection and
      supervision of high-yield securities by the investment adviser involves
      continuous analysis of individual issuers, general business conditions
      and other factors which may be too time-consuming or too costly for the
      average investor. The furnishing of these services does not, of course,
      guarantee successful results. The investment adviser&#146;s analysis of
      issuers includes, among other things, historic and current financial
      conditions, current and anticipated cash flow and borrowing requirements,
      value of assets in relation to historical costs, strength of management,
      responsiveness to business conditions, credit standing and current and
      anticipated results of operations. Analysis of general conditions and
      other factors may include anticipated change in economic activity and
      interest rates, the availability of new investment opportunities and the
      economic outlook for specific industries. While the investment adviser
      considers as one factor in its credit analysis the ratings assigned by
      the rating services, the investment adviser performs its own independent
      credit analysis of issuers and, consequently, each Fund may invest,
      without limit, in unrated securities. As a result, each Fund&#146;s
      ability to achieve its investment objectives may depend to a greater
      extent on the investment adviser&#146;s own credit analysis than
      investment companies which invest in higher-rated securities. Although
      each Fund will invest primarily in lower-rated securities, other than
      with respect to Distressed Securities (which are discussed below) it will
      not invest in securities in the lowest rating categories (Ca or below by
      Moody&#146;s and CC or below by S&amp;P) unless the investment adviser
      believes that the financial condition of the issuers or the protection
      afforded to the particular securities is stronger than would otherwise be
      indicated by such ratings. Securities which subsequently are downgraded
      may continue to be held by each Fund and will be sold only if, in the
      judgment of the investment adviser, it is advantageous to do
      so.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with its
      investments in corporate debt securities, or restructuring of investments
      owned by each Fund, each Fund may receive warrants or other non-income
      producing debt or equity securities. Each Fund may retain such securities
      until the investment adviser determines it is appropriate in light of
      current market conditions to effect a disposition of such
      securities.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When changing
      economic and other factors cause the yield difference between lower-rated
      and higher-rated securities to narrow, each Fund may purchase
      higher-rated securities if the investment adviser believes that the risk
      of loss of income and principal may be reduced substantially with only a
      relatively small reduction in yield.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx27"></A>
    Description of Distressed Securities</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies
      may invest up to 35% and Debt Strategies II and Debt Strategies III may
      invest up to 20% of their respective total assets in Distressed
      Securities. Distressed Securities are high yield/high risk securities,
      including Corporate Loans purchased in the secondary market, which are
      the subject of bankruptcy proceedings or otherwise in default as to the
      repayment of principal and/or payment of interest at the time of
      acquisition by each Fund or are rated in the lower rating categories (Ca
      or lower by Moody&#146;s and CC or lower by S&amp;P) or which, if
      unrated, are in the judgment of the investment adviser of equivalent
      quality. Investment in Distressed Securities is speculative and involves
      significant risk. Distressed Securities frequently do not produce income
      while they are outstanding and may require each Fund to bear certain
      extraordinary expenses in order to protect and recover its investment.
      Therefore, to the extent each Fund pursues its secondary objective of
      capital appreciation through investment in Distressed Securities, each
      Fund&#146;s ability to achieve current income for its shareholders may be
      diminished. Each Fund also will be subject to significant uncertainty as
      to when and in what manner and for what value the obligations evidenced
      by the Distressed Securities will eventually be satisfied; e.g., through
      a liquidation of the obligor&#146;s assets, an exchange offer or plan of
      reorganization involving the Distressed Securities or a payment of some
      amount in satisfaction of the obligation. In addition, even if an
      exchange offer is made or plan of reorganization is adopted with respect
      to Distressed Securities held by each Fund, there can be no assurance
      that the securities or other assets received by each Fund in connection
      with such exchange offer or plan of reorganization will not have a lower
      value or income potential than may have been anticipated when the
      investment was made. Moreover, any securities received by each Fund upon
      completion of an exchange offer or plan of reorganization may be
      restricted as to resale. As a result of each Fund&#146;s participation in
      negotiations with respect to any exchange offer or plan of reorganization
      with respect to an issuer of Distressed Securities, each Fund may be
      restricted from disposing of such securities.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx28"></A>
    Description of Convertible Securities and Preferred Stock</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A convertible
      security is a bond, debenture, note or preferred stock that may be
      converted into or exchanged for a prescribed amount of common stock or
      other securities of the same or a different issuer within a particular
      period of time at a specified price or formula. A convertible security
      entitles the holder to receive interest generally paid or accrued on debt
      or the dividend paid on preferred stock until the convertible security
      matures or is redeemed, converted or exchanged. Convertible securities
      have several unique investment characteristics such as (i) higher yields
      than common stocks, but lower yields than comparable nonconvertible
      securities, (ii) a lesser degree of fluctuation in value than the
      underlying stock since they have fixed income characteristics, and (iii)
      the potential for capital appreciation if the market price of the
      underlying common stock increases. Holders of convertible securities have
      a claim on the assets of the issuer prior to the common stockholders but
      may be subordinated to similar non-convertible securities of the same
      issuer. A convertible security might be subject to redemption at the
      option of the issuer at a price established in the convertible
      security&#146;s governing instrument. If a convertible security held by
      each Fund is called for redemption, each Fund may be required to permit
      the issuer to redeem the security, convert it into the underlying common
      stock or other securities or sell it to a third party.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      invest in non-convertible preferred stock which generally entitles the
      holders to receive a dividend payment. Holders of preferred stock have a
      claim on the assets of the issuer prior to the common stockholders but
      subordinate to the creditors and holders of debt instruments of the same
      issuer. Preferred stock may be subject to redemption at the option of the
      issuer at a price established in the preferred stock governing
      instrument.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
    <A NAME="tx29"></A>
    Illiquid Securities</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate Loans,
      junk bonds, and other securities held by each Fund may not be readily
      marketable and may be subject to restrictions on resale. Although
      Corporate Loans are transferred among certain financial institutions, as
      described above, the Corporate Loans in which each Fund invests may not
      have the liquidity of conventional debt securities traded in the
      secondary market and may be considered illiquid. As the market for
      Corporate Loans continues to become more seasoned, the investment adviser
      expects that liquidity will improve. Each Fund has no limitation on the
      amount of its investments which are not readily marketable or are subject
      to restrictions on resale.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx30"></A>
    Other Investment Policies</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund has
      adopted certain other policies as set forth below:</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leverage.
      &nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund is authorized to utilize leverage
      in amounts up to 33</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><SUP>&nbsp;1</SUP>
    </FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of its total
      assets (including the assets obtained from leverage) to provide common
      stockholders with a potentially higher rate of return. Debt Strategies,
      Debt Strategies II and Debt Strategies III each has entered into a
      separate credit agreement with certain conduit and secondary lenders
      providing for a secured revolving credit facility under the following
      terms: </FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <BR>

    <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
     <TR>
      <TH VALIGN="bottom" ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Commitment
      <BR>
      Amount</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
      <TH><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Expiration
      <BR>
      Date</B></FONT><FONT
      SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1" NOSHADE></FONT></TH>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="450" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
        Strategies</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$105
        million</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">July 3,
        2001</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="450" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        II</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$250
        million</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">July 3,
        2001</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="450" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt Strategies
        III</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">$&nbsp;&nbsp;48
        million</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">July 3,
        2001</FONT></TD>
     </TR>
    </TABLE>


    <BR>
    <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>
    <DIV ALIGN="left">


    </DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to each
      credit facility, each Fund expects to pay interest on each advance
      thereunder at a per annum rate equivalent to the weighted average of the
      per annum rates paid or payable by the various conduit lenders as
      interest on commercial paper notes issued by such conduit lenders that
      are allocated, to fund the making or maintenance of such advances, which
      rates shall reflect and give effect to the commissions of placement
      agents and dealers in respect of such commercial paper notes, if any,
      (the &#147;CP Rate&#148;). In the event the CP Rate is unavailable, the
      advances will ordinarily bear interest at a per annum rate equal to the
      one-, two- or three-month eurodollar rate (as selected by such Fund)
      (adjusted for reserves) plus 0.75%. All interest is payable monthly in
      arrears. In addition, each Fund will pay certain upfront structuring
      fees, as well as ongoing program and liquidity fees associated with
      participation in the credit facility.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of the
      Merger, Debt Strategies II expects to enter into an amendment to its
      credit facility to increase the total commitment thereunder in an amount
      sufficient to refinance the outstanding credit facilities of Debt
      Strategies and Debt Strategies III in a principal amount approximately
      equal to the aggregate commitment amount of the currently outstanding
      credit facilities. If stockholders do not approve the Merger, or if prior
      to the Merger a Fund&#146;s existing credit facility expires, that Fund
      may renegotiate its existing credit facility, enter into a new credit
      facility with another lender, or operate without a credit facility. Each
      Fund will generally not utilize leverage if it anticipates that its
      leveraged capital structure would result in a lower return to holders of
      the Common Stock than that obtainable if the Common Stock were
      unleveraged for any significant amount of time. Each Fund may also borrow
      money as a temporary measure for extraordinary or emergency purposes,
      including the payment of dividends and the settlement of securities
      transactions which may otherwise require untimely dispositions of Fund
      securities. Each Fund at times may borrow from affiliates of the
      investment adviser, provided that the terms of such borrowings are no
      less favorable than those available from comparable sources of funds in
      the marketplace. The fee paid to the investment adviser will be
      calculated on the basis of each Fund&#146;s assets, including proceeds
      from borrowings for leverage and the issuance of preferred
      stock.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under each Fund&#146;s
      existing credit facility, the Funds may not pay dividends or make
      distributions if there is a principal payment default, a bankruptcy
      default with respect to such Fund, such Fund is not in compliance with
      its borrowing base test or asset coverage test under such credit facility
      (and such default is not cured within five business days) or the maturity
      date of the credit facility has been accelerated due to the occurrence
      and continuance of an event of default thereunder by such Fund. See
      &#147;Dividends and Distributions.&#148;</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The concept of
      leveraging is based on the premise that the cost of the assets to be
      obtained from leverage will be based on short-term rates which normally
      will be lower than the return earned by each Fund on its longer term
      portfolio investments. Since the total assets of each Fund (including the
      assets obtained from leverage) will be invested in higher yielding
      portfolio investments or portfolio investments with the potential for
      capital appreciation, the holders of Common Stock will be the
      beneficiaries of the incremental return. Should the differential between
      the return on the underlying assets and the cost of leverage narrow, the
      incremental return &#147;pick up&#148; will be reduced. Furthermore, if
      long-term rates rise, the Common Stock net asset value will reflect the
      decline in the value of portfolio holdings resulting
      therefrom.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Leverage creates
      risks for the holders of Common Stock, including the likelihood of
      greater volatility of net asset value and market price of shares of the
      Common Stock, and the risk that fluctuations in interest rates on
      borrowings or in the dividend rates on any preferred stock may affect the
      return to the holders of Common Stock. To the extent the income or
      capital appreciation derived from securities purchased with funds
      received from leverage exceeds the cost of leverage, each Fund&#146;s
      return will be greater than if leverage had not been used. Conversely, if
      the income or capital appreciation from the securities purchased with
      such funds is not sufficient to cover the cost of leverage, the return of
      each Fund will be less than if leverage had not been used, and therefore
      the amount available to shareholders as dividends and other distributions
      will be reduced. In the latter case, the investment adviser in its best
      judgment may nevertheless determine to maintain each Fund&#146;s
      leveraged position if it expects that the benefits to each Fund&#146;s
      stockholders of maintaining the leveraged position will outweigh the
      current reduced return.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Capital raised
      through leverage will be subject to interest costs or dividend payments
      which may or may not exceed the income and appreciation on the assets
      purchased. Each Fund also may be required to maintain minimum average
      balances in connection with borrowings or to pay a commitment or other
      fee to maintain a line of credit. Either of these requirements will
      increase the cost of borrowing over the stated interest rate. The
      issuance of preferred stock involves offering expenses and other costs
      and may limit each Fund&#146;s freedom to pay dividends on shares of
      Common Stock or to engage in other activities. Borrowings and the
      issuance of preferred stock having priority over each Fund&#146;s Common
      Stock create an opportunity for greater return per share of Common Stock,
      but at the same time such borrowing or issuance of preferred stock is a
      speculative technique in that it will increase each Fund&#146;s exposure
      to capital risk. Such risks may be reduced through the use of borrowings
      and preferred stock that have floating rates of interest. Unless the
      income and appreciation, if any, on assets acquired with borrowed funds
      or offering proceeds exceeds the cost of borrowing or issuing additional
      classes of securities, the use of leverage will diminish the investment
      performance of each Fund compared with what it would have been without
      leverage.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain types of
      borrowings may result in each Fund being subject to covenants in credit
      agreements relating to asset coverage, borrowing base and portfolio
      composition requirements. Each Fund may be subject to certain
      restrictions on investments imposed by guidelines of one or more
      nationally recognized statistical rating organizations which may issue
      ratings for the short-term corporate debt securities or preferred stock.
      These covenants or guidelines may impose asset coverage or portfolio
      composition requirements that are more stringent than those imposed by
      the Investment Company Act. It is not anticipated that these covenants or
      guidelines will impede the investment adviser from managing each
      Fund&#146;s portfolio in accordance with each Fund&#146;s investment
      objectives and policies.</FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the
      Investment Company Act, no Fund is permitted to incur indebtedness unless
      immediately after such incurrence each Fund has an asset coverage of 300%
      of the aggregate outstanding principal balance of indebtedness (i.e.,
      such indebtedness may not exceed 33</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><SUP>&nbsp;1</SUP>
    </FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of each
      Fund&#146;s total assets). Additionally, under the Investment Company Act
      no Fund may declare any dividend or other distribution upon any class of
      its capital
    stock, or purchase any such capital stock, unless the aggregate
      indebtedness of such Fund has, at the time of the declaration of any such
      dividend or distribution or at the time of any such purchase, an asset
      coverage of at least 300% after deducting the amount of such dividend,
      distribution, or purchase price, as the case may be. Under the Investment
      Company Act, no Fund is permitted to issue shares of preferred stock
      unless immediately after such issuance the net asset value of such
      Fund&#146;s portfolio is at least 200% of the liquidation value of the
      outstanding preferred stock (i.e., such liquidation value may not exceed
      50% of each Fund&#146;s total assets). In addition, no Fund is permitted
      to declare any cash dividend or other distribution on its Common Stock
      unless, at the time of such declaration, the net asset value of each
      Fund&#146;s portfolio (determined after deducting the amount of such
      dividend or distribution) is a least 200% of such liquidation value. In
      the event shares of preferred stock are issued, each Fund intends, to the
      extent possible, to purchase or redeem shares of preferred stock from
      time to time to maintain coverage of any preferred stock of at least
      300%.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund&#146;s
      willingness to borrow money and issue new securities for investment
      purposes, and the amount it will borrow or issue, will depend on many
      factors, the most important of which are investment outlook, market
      conditions and interest rates. Successful use of a leveraging strategy
      depends on the investment adviser&#146;s ability to predict correctly
      interest rates and market movements, and there is no assurance that a
      leveraging strategy will be successful during any period in which it is
      employed.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Assuming the
      utilization of leverage by borrowings in the amount of approximately
      33</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><SUP>&nbsp;1</SUP>
    </FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of each
      Fund&#146;s total assets, and an annual borrowing rate of 7.00% payable
      on such leverage based on the estimated borrowing costs as of the date of
      this Joint Proxy Statement and Prospectus, the annual return that each
      Fund&#146;s portfolio must experience (net of expenses) in order to cover
      such borrowing costs would be 2.33%. </FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
      table is designed to illustrate the effect on the return to a holder of
      Debt Strategies II Common Stock of the leverage obtained by borrowings in
      the amount of approximately 33</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><SUP>&nbsp;1</SUP>
    </FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of the
      Fund&#146;s total assets, assuming hypothetical annual returns of the
      Fund&#146;s portfolio of minus 10% to plus 10%. As the table shows,
      leverage generally increases the return to stockholders when portfolio
      return is positive and greater than the cost of leverage and decreases
      the return when the portfolio return is negative or less than the cost of
      leverage. The figures appearing in the table are hypothetical and actual
      returns may be greater or less than those appearing in the table. This
      information is presented only for Debt Strategies II because it would be
      identical for Debt Strategies, Debt Strategies III and the Surviving
      Fund. </FONT></DIV>

    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>


    <BR>

    <TABLE ALIGN="center" WIDTH="430" CELLSPACING=0 CELLPADDING=0>
     <TR>
      <TD VALIGN="bottom" WIDTH="377" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><I>Debt
        Strategies II</I></FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" ALIGN="right"></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="377" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Assumed
        Portfolio Return (net of expenses)</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(10)%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(5)%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">5%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10%</FONT></TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" WIDTH="377" NOWRAP ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Corresponding
        Common Stock Return</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(19)%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(11)%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">(4)%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4%</FONT></TD>
      <TD><FONT
      SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">12%</FONT></TD>
     </TR>
    </TABLE>


    <BR>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx31"></A>
    Interest Rate Transactions</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order to hedge
      the value of each Fund&#146;s portfolio against interest rate
      fluctuations or to enhance each Fund&#146;s income each Fund may enter
      into various interest rate transactions, such as interest rate swaps and
      the purchase or sale of interest rate caps and floors. Each Fund expects
      to enter into these transactions primarily to preserve a return or spread
      on a particular investment or portion of its portfolio or to protect
      against any increase in the price of securities each Fund anticipates
      purchasing at a later date. Each Fund intends to use these transactions
      primarily as a hedge and not as a speculative investment. However, each
      Fund may also invest in interest rate swaps to enhance income or increase
      each Fund&#146;s yield, for example, during periods of steep interest
      rate yield curves (i.e., wide differences between short term and long
      term interest rates).</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In an interest
      rate swap, each Fund exchanges with another party their respective
      commitments to pay or receive interest, e.g., an exchange of fixed rate
      payments for floating rate payments. For example, if each Fund holds a
      debt instrument with an interest rate that is reset only once each year,
      it may swap the right to receive interest at this fixed rate for the
      right to receive interest at a rate that is reset every week. This would
      enable each Fund to offset a decline in the value of the debt instrument
      due to rising interest rates but would also limit its ability to benefit
      from falling interest rates. Conversely, if each Fund holds a debt
      instrument with an interest
    rate that is reset every week and it would like to lock in what it believes
      to be a high interest rate for one year, it may swap the right to receive
      interest at this variable weekly rate for the right to receive interest
      at a rate that is fixed for one year. Such a swap would protect each Fund
      from a reduction in yield due to falling interest rates and may permit
      each Fund to enhance its income through the positive differential between
      one week and one year interest rates, but would preclude it from taking
      full advantage of rising interest rates.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund usually
      will enter into interest rate swaps on a net basis, i.e., the two payment
      streams are netted out, with each Fund receiving or paying, as the case
      may be, only the net amount of the two payments. The net amount of the
      excess, if any, of each Fund&#146;s obligations over its entitlements
      with respect to each interest rate swap will be accrued on a daily basis,
      and an amount of cash or liquid instruments having an aggregate net asset
      value at least equal to the accrued excess will be maintained in a
      segregated account by each Fund&#146;s custodian. If the interest rate
      swap transaction is entered into on other than a net basis, the full
      amount of each Fund&#146;s obligations will be accrued on a daily basis,
      and the full amount of each Fund&#146;s obligations will be maintained in
      a segregated account by each Fund&#146;s custodian.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may also
      engage in interest rate transactions in the form of purchasing or selling
      interest rate caps or floors. Each Fund will not sell interest rate caps
      or floors that it does not own. The purchase of an interest rate cap
      entitles the purchaser, to the extent that a specified index exceeds a
      predetermined interest rate, to receive payments of interest equal to the
      difference of the index and the predetermined rate on a notional
      principal amount (the reference amount with respect to which interest
      obligations are determined although no actual exchange of principal
      occurs) from the party selling such interest rate cap. The purchase of an
      interest rate floor entitles the purchaser, to the extent that a
      specified index falls below a predetermined interest rate, to receive
      payments of interest at the difference of the index and the predetermined
      rate on a notional principal amount from the party selling such interest
      rate floor. No Fund will enter into caps or floors if, on a net basis,
      the aggregate notional principal amount with respect to such agreements
      exceeds the net assets of such Fund.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Typically, the
      parties with which each Fund will enter into interest rate transactions
      will be broker-dealers and other financial institutions. Each Fund will
      not enter into any interest rate swap, cap or floor transaction unless
      the unsecured senior debt or the claims-paying ability of the other party
      thereto is rated investment grade quality by at least one nationally
      recognized statistical rating organization at the time of entering into
      such transaction or whose creditworthiness is believed by the investment
      adviser to be equivalent to such rating. If there is a default by the
      other party to such a transaction, each Fund will have contractual
      remedies pursuant to the agreements related to the transaction. The swap
      market has grown substantially in recent years with a large number of
      banks and investment banking firms acting both as principals and as
      agents utilizing standardized swap documentation. As a result, the swap
      market has become relatively liquid in comparison with other similar
      instruments traded in the interbank market. Caps and floors, however, are
      more recent innovations and are less liquid than swaps. Certain Federal
      income tax requirements may limit each Fund&#146;s ability to engage in
      certain interest rate transactions. Gains from transactions in interest
      rate swaps distributed to shareholders will be taxable as ordinary income
      or, in certain circumstances, as long-term capital gains to
      shareholders.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx32"></A>
    Foreign Currency Swaps</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      enter into foreign currency swaps in order to hedge non-U.S. dollar
      denominated portfolio investments, although the Funds have no current
      intention to do so.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency
      swaps involve the exchange by the lenders, including each Fund, with
      another party (the &#147;counterparty&#148;) of the right to receive the
      currency in which the loan is denominated for the right to receive
      dollars. Each Fund will generally enter into a transaction subject to a
      foreign currency swap only if, at the time of entering into such swap,
      the outstanding debt obligations of the counterparty are investment
      grade; i.e., rated BBB or A-3 or higher by S&amp;P, Baa or B3 or higher
      by Moody&#146;s, BBB or F4 or higher by Fitch IBCA, Inc., or are
      determined to be of comparable quality in the judgment of the investment
      adviser. The amounts of dollar
    payments to be received by the lenders and the foreign currency payments to
      be received by the counterparty are fixed at the time the swap
      arrangement is entered into. Accordingly, the swap protects each Fund
      from fluctuations in exchange rates and locks in the right to receive
      payments under the loan in a predetermined amount of dollars. If there is
      a default by the counterparty each Fund will have contractual remedies
      pursuant to the swap arrangement. However, the dollar value of each
      Fund&#146;s right to foreign currency payments under the loan will be
      subject to fluctuations in the applicable exchange rate to the extent
      that a replacement swap arrangement is unavailable or each Fund is unable
      to recover damages from the defaulting counterparty. If the borrower
      defaults on or prepays the underlying Corporate Loan, each Fund may be
      required pursuant to the swap arrangements to compensate the counterparty
      to the extent of fluctuations inexchange rates adverse to the
      counterparty. In the event of such a default or prepayment, an amount of
      cash or liquid instruments having an aggregate net asset value at least
      equal to the amount of compensation that must be paid to the counterparty
      pursuant to the swap arrangements will be maintained in a segregated
      account by each Fund&#146;s custodian.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx33"></A>
    Options on Portfolio Securities</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Call Options on
      Portfolio Securities.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund may purchase
      call options on any of the types of securities in which it may invest. A
      purchased call option gives each Fund the right to buy, and obligates the
      seller to sell, the underlying security at the exercise price at any time
      during the option period. Each Fund also is authorized to write (i.e.,
      sell) covered call options on the securities in which it may invest and
      to enter into closing purchase transactions with respect to certain of
      such options. A covered call option is an option where each Fund, in
      return for a premium, gives another party a right to buy specified
      securities owned by each Fund at a specified future date and price set at
      the time of the contract. The principal reason for writing call options
      is attempt to realize, through the receipt of premiums, a greater return
      than would be realized on the securities alone. By writing covered call
      options, each Fund gives up the opportunity, while the option is in
      effect, to profit from any price increase in the underlying security
      above the option exercise price. In addition, each Fund&#146;s ability to
      sell the underlying security will be limited while the option is in
      effect unless each Fund effects a closing purchase transaction. A closing
      purchase transaction cancels out each Fund&#146;s position as the writer
      of an option by means of an offsetting purchase of an identical option
      prior to the expiration of the option it has written. Covered call
      options also serve as a partial hedge against the price of the underlying
      security declining. Each Fund may also purchase and sell call options on
      indices. Index options are similar to options on securities except that,
      rather than taking or making delivery of securities underlying the option
      at a specified price upon exercise, an index option gives the holder the
      right to receive cash upon exercise of the option if the level of the
      index upon which the option is based is greater than the exercise price
      of the option.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Put Options on
      Portfolio Securities.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund is authorized
      to purchase put options to hedge against a decline in the value of its
      securities. By buying a put option, each Fund has a right to sell the
      underlying security at the exercise price, thus limiting each Fund&#146;s
      risk of loss through a decline in the market value of the security until
      the put option expires. The amount of any appreciation in the value of
      the underlying security will be partially offset by the amount of the
      premium paid for the put option and any related transaction costs. Prior
      to its expiration, a put option may be sold in a closing sale transaction
      and profit or loss from the sale will depend on whether the amount
      received is more or less than the premium paid for the put option plus
      the related transaction costs. A closing sale transaction cancels out
      each Fund&#146;s position as the purchaser of an option by means of an
      offsetting sale of an identical option prior to the expiration of the
      option it has purchased. Each Fund also has authority to write (i.e.,
      sell) put options on the types of securities which may be held by each
      Fund, provided that such put options are covered, meaning that such
      options are secured by segregated, liquid instruments. Each Fund will
      receive a premium for writing a put option, which increases each
      Fund&#146;s return. Each Fund will not sell puts if, as a result, more
      than 50% of each Fund&#146;s assets would be required to cover its
      potential obligations under its hedging and other investment
      transactions. The Fund may purchase and sell put options on indices.
      Index options are similar to options on securities except that, rather
      than taking or making delivery of securities underlying the option at a
      specified price upon exercise, an index option gives the holder the right
      to receive cash upon exercise of the option if the level of the index
      upon which the option is based is less than the exercise price of the
      option.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
    <A NAME="tx34"></A>
    Financial Futures and Options Thereon</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund is
      authorized to engage in transactions in financial futures contracts
      (&#147;futures contracts&#148;) and related options on such futures
      contracts either as a hedge against adverse changes in the market value
      of its portfolio securities and interest rates or to enhance each
      Fund&#146;s income. A futures contract is an agreement between two
      parties which obligates the purchaser of the futures contract to buy and
      the seller of a futures contract to sell a security for a set price on a
      future date or, in the case of an index futures contract to make and
      accept a cash settlement based upon the difference in value of the index
      between the time the contract was entered into and the time of its
      settlement. A majority of transactions in futures contracts, however, do
      not result in the actual delivery of the underlying instrument or cash
      settlement, but are settled through liquidation, i.e., by entering into
      an offsetting transaction. Futures contracts have been designed by boards
      of trade which have been designated &#147;contract markets&#148; by the
      Commodities Futures Trading Commission (&#147;CFTC&#148;). Transactions
      by each Fund in futures contracts and financial futures are subject to
      limitations as described below under &#147;Restrictions on the Use of
      Futures Transactions.&#148;</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may sell
      financial futures contracts in anticipation of an increase in the general
      level of interest rates. Generally, as interest rates rise, the market
      values of securities which may be held by each Fund will fall, thus
      reducing the net asset value of each Fund. However, as interest rates
      rise, the value of each Fund&#146;s short position in the futures
      contract will also tend to increase, thus offsetting all or a portion of
      the depreciation in the market value of each Fund&#146;s investments
      which are being hedged. While each Fund will incur commission expenses in
      selling and closing out futures positions, these commissions are
      generally less than the transaction expenses which each Fund would have
      incurred had the Fund sold portfolio securities in order to reduce its
      exposure to increases in interest rates. Each Fund also may purchase
      financial futures contracts in anticipation of a decline in interest
      rates when it is not fully invested in a particular market in which it
      intends to make investments to gain market exposure that may in part or
      entirely offset an increase in the cost of securities it intends to
      purchase. It is anticipated that, in a substantial majority of these
      transactions, each Fund will purchase securities upon termination of the
      futures contract.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund also has
      authority to purchase and write call and put options on futures
      contracts. Generally, these strategies are utilized under the same market
      and market sector conditions (i.e., conditions relating to specific types
      of investments) in which each Fund enters into futures transactions. The
      Fund may purchase put options or write call options on futures contracts
      rather than selling the underlying futures contract in anticipation of a
      decrease in the market value of securities or an increase in interest
      rates. Similarly, each Fund may purchase call options, or write put
      options on futures contracts, as a substitute for the purchase of such
      futures to hedge against the increased cost resulting from an increase in
      the market value or a decline in interest rates of securities which each
      Fund intends to purchase.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund may
      engage in options and futures transactions on exchanges and options in
      the over-the-counter markets (&#147;OTC options&#148;). In general,
      exchange-traded contracts are third-party contracts (i.e., performance of
      the parties&#146; obligation is guaranteed by an exchange or clearing
      corporation) with standardized strike prices and expiration dates. OTC
      options transactions are two-party contracts with price and terms
      negotiated by the buyer and seller. See &#147;Restrictions on OTC
      Options&#148; below for information as to restrictions on the use of OTC
      options.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restrictions on
      the Use of Futures Transactions.&nbsp;&nbsp;&nbsp;&nbsp;</I>Under
      regulations of the CFTC, the futures trading activity described herein
      will not result in the Fund being deemed a &#147;commodity pool,&#148; as
      defined under such regulations, provided that each Fund adheres to
      certain restrictions. In particular, the Fund may purchase and sell
      futures contracts and options thereon (i) for bonafide hedging purposes,
      and (ii) for non-hedging purposes, if the aggregate initial margin and
      premiums required to establish positions in such contracts and options
      does not exceed 5% of the liquidation value of each Fund&#146;s
      portfolio, after taking into account unrealized profits and unrealized
      losses on any such contracts and options. Margin deposits may consist of
      cash or securities acceptable to the broker and the relevant contract
      market.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When each Fund purchases
      a futures contract or writes a put option or purchases a call option
      thereon, an amount of cash or liquid instruments will be deposited in a
      segregated account with each Fund&#146;s custodian so that the amount so
      segregated, plus the amount of variation margin held in the account of
      its broker, equals the market value of the futures contract, thereby
      ensuring that the use of such futures is unleveraged.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An order has been
      obtained from the SEC which exempts each Fund from certain provisions of
      the Investment Company Act in connection with transactions involving
      futures contracts and options thereon.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restrictions on
      OTC Options.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund will engage in
      transactions in OTC options only with banks or dealers which have capital
      of at least $50 million or whose obligations are guaranteed by an entity
      having capital of at least $50 million. OTC options and assets used to
      cover OTC options written by the Fund are considered by the staff of the
      SEC to be illiquid. The illiquidity of such options or assets may prevent
      a successful sale of such options or assets, result in a delay of sale,
      or reduce the amount of proceeds that might otherwise be
      realized.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx35"></A>
    Risk Factors In Interest Rate Transactions and Options and Futures
      Transactions</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The use of
      interest rate transactions is a highly specialized activity which
      involves investment techniques and risks different from those associated
      with ordinary portfolio securities transactions. Interest rate
      transactions involve the risk of an imperfect correlation between the
      index used in the hedging transaction and that pertaining to the
      securities which are the subject of such transaction. If the Investment
      adviser is incorrect in its forecasts of market values, interest rates
      and other applicable factors, the investment performance of each Fund
      would diminish compared with what it would have been if these investment
      techniques were not used. In addition, interest rate transactions that
      may be entered into by each Fund do not involve the delivery of
      securities or other underlying assets or principal. Accordingly, the risk
      of loss with respect to interest rate swaps is limited to the net amount
      of interest payments that each Fund is contractually obligated to make.
      If the security underlying an interest rate swap is prepaid and each Fund
      continues to be obligated to make payments to the other party to the
      swap, each Fund would have to make such payments from another source. If
      the other party to an interest rate swap defaults, each Fund&#146;s risk
      of loss consists of the net amount of interest payments that each Fund
      contractually is entitled to receive. In the case of a purchase by each
      Fund of an interest rate cap or floor, the amount of loss is limited to
      the fee paid. Since interest rate transactions are individually
      negotiated, the Investment adviser expects to achieve an acceptable
      degree of correlation between each Fund&#146;s rights to receive interest
      on securities and its rights and obligations to receive and pay interest
      pursuant to interest rate swaps.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Utilization of
      options and futures transactions to hedge the portfolio involves the risk
      of imperfect correlation in movements in the price of options and futures
      and movements in the prices of the securities which are the subject of
      the hedge. If the price of the options or futures moves more or less than
      the price of the subject of the hedge, each Fund will experience again or
      loss which will not be completely offset by movements in the price of the
      subject of the hedge. This risk particularly applies to each Fund&#146;s
      use of futures and options thereon since it will generally use such
      instruments as also called &#147;cross-hedge,&#148; which means that the
      security that is the subject of the futures contract is different from
      the security being hedged by the contract.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to exercise
      or expiration, an exchange-traded option position can only be terminated
      by entering into a closing purchase or sale transaction. This requires a
      secondary market on an exchange for call or put options of the same
      series. Each Fund intends to enter into options and futures transactions,
      on an exchange or in the over-the-counter market, only if there appears
      to be a liquid secondary market for such options or futures. However,
      there can be no assurance that a liquid secondary market will exist at
      any specific time. Thus, it may not be possible to close an options or
      futures position. The inability to close options and futures positions
      also could have an adverse impact on each Fund&#146;s ability to
      effectively hedge its portfolio. There is also the risk of loss by each
      Fund of margin deposits or collateral in the event of bankruptcy of a
      broker with whom each Fund has an open position in an option, a futures
      contract or an option related to a futures contract.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
    <A NAME="tx36"></A>
    Other Investment Strategies</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Repurchase
      Agreements.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund may enter into
      repurchase agreements with respect to its permitted investments with
      financial institutions that (i) have, in the opinion of the investment
      adviser, substantial capital relative to each Fund&#146;s exposure, or
      (ii) have provided each Fund with a third-party guaranty or other credit
      enhancement. Under a repurchase agreement each Fund buys a security at
      one price and simultaneously promises to sell that same security back to
      the seller at a higher price. Each Fund&#146;s repurchase agreements will
      provide that the value of the collateral underlying the repurchase
      agreement will always be at least equal to the repurchase price,
      including any accrued interest earned on the repurchase agreement, and
      will be marked to market daily. The repurchase date usually is within
      seven days of the original purchase date. Repurchase agreements are
      deemed to be loans under the Investment Company Act. In all cases, the
      Investment adviser must be satisfied with the creditworthiness of the
      other party to the agreement before entering into a repurchase agreement.
      In the event of the bankruptcy (or other insolvency proceeding) of the
      other party to a repurchase agreement, each Fund might experience delays
      in recovering its cash. To the extent that, in the meantime, the value of
      the securities each Fund purchases may have declined, each Fund could
      experience a loss.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reverse
      Repurchase Agreements.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund may enter
      into reverse repurchase agreements with respect to its portfolio
      investments subject to the investment restrictions set forth herein.
      Reverse repurchase agreements involve the sale of securities held by each
      Fund with an agreement by each Fund to repurchase the securities at an
      agreed upon price, date and interest payment. The use by the Fund of
      reverse repurchase agreements involves many of the same risks of leverage
      described under &#147;Risk Factors and Special Considerations&#148; and
      &#147;Other Investment Policies&#151;Leverage&#148; since the proceeds
      derived from such reverse repurchase agreements may be invested in
      additional securities. At the time each Fund enters into a reverse
      repurchase agreement, it may establish and maintain a segregated account
      with the custodian containing cash or liquid instruments having a value
      not less than the repurchase price (including accrued interest). If each
      Fund establishes and maintains such a segregated account, a reverse
      repurchase agreement will not be considered a borrowing by each Fund;
      however, under circumstances in which each Fund does not establish and
      maintain such a segregated account, such reverse repurchase agreement
      will be considered a borrowing for the purpose of each Fund&#146;s
      limitation on borrowings. Reverse repurchase agreements involve the risk
      that the market value of the securities acquired in connection with the
      reverse repurchase agreement may decline below the price of the
      securities each Fund has sold but is obligated to repurchase. Also,
      reverse repurchase agreements involve the risk that the market value of
      the securities retained in lieu of sale by the Fund in connection with
      the reverse repurchase agreement may decline in price. In the event the
      buyer of securities under a reverse repurchase agreement files for
      bankruptcy or becomes insolvent, such buyer or its trustee or receiver
      may receive an extension of time to determine whether to enforce each
      Fund&#146;s obligation to repurchase the securities, and each Fund&#146;s
      use of the proceeds of the reverse repurchase agreement may effectively
      be restricted pending such decision. Also, each Fund would bear the risk
      of loss to the extent that the proceeds of the reverse repurchase
      agreement are less than the value of the securities subject to such
      agreement.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lending of
      Portfolio Securities.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund may from time
      to time lend securities from its portfolio, with a value not exceeding
      33</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><SUP>&nbsp;1</SUP>
    </FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/</FONT><FONT
    SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3</FONT><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of its total
      assets, to banks, brokers and other financial institutions and receive
      collateral in cash or securities issued or guaranteed by the U.S.
      government, its agencies or instrumentalities which will be maintained at
      all times in an amount equal to at least 100% of the current market value
      of the loaned securities. The purpose of such loans is to permit the
      borrower to use such securities for delivery to purchasers when such
      borrower has sold short. If cash collateral is received by each Fund, it
      is invested in short-term money market securities, and a portion of the
      yield received in respect of such investment is retained by each Fund.
      Alternatively, if securities are delivered to each Fund as collateral,
      each Fund and the borrower negotiate a rate for the loan premium to be
      received by each Fund for lending its portfolio securities. In either
      event, the total yield on each Fund&#146;s portfolio is increased by
      loans of its portfolio securities. Each Fund will have the right to
      regain record ownership of loaned securities to exercise beneficial
      rights such as voting rights, subscription rights and rights to
      dividends, interest or other distributions. Such loans are terminable at
      any time. Each Fund may pay reasonable finder&#146;s, administrative and
      custodial fees in connection with such loans. </FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
      <I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When-Issued and
      Forward Commitment Securities.&nbsp;&nbsp;&nbsp;&nbsp;</I>Each Fund may
      purchase securities on a &#147;when-issued&#148; basis and may purchase
      or sell securities on a &#147;forward commitment&#148; basis in order to
      hedge against anticipated changes in interest rates and prices. When such
      transactions are negotiated, the price, which is generally expressed in
      yield terms, is fixed at the time the commitment is made, but delivery
      and payment for the securities take place at a later date. When-issued
      securities and forward commitments may be sold prior to the settlement
      date, but each Fund will enter into when-issued and forward commitments
      only with the intention of actually receiving or delivering the
      securities, as the case may be. If each Fund disposes of the right to
      acquire a when-issued security prior to its acquisition or disposes of
      its right to deliver or receive against a forward commitment, it can
      incur a gain or loss. At the time each Fund enters into a transaction on
      a when-issued or forward commitment basis, it will segregate with the
      custodian cash or liquid instruments with a value not less than the value
      of the when-issued or forward commitment securities. The value of these
      assets will be monitored daily to ensure that their marked to market
      value will at all times exceed the corresponding obligations of each
      Fund. There is always a risk that the securities may not be delivered,
      and each Fund may incur a loss. Settlements in the ordinary course, which
      may take substantially more than five business days for mortgage-related
      securities, are not treated by each Fund as when-issued or forward
      commitment transactions and accordingly are not subject to the foregoing
      restrictions.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
    <A NAME="tx37"></A>
    Investment Restrictions</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds have
      identical investment restrictions. The following are fundamental
      investment restrictions of each Fund and may not be changed without the
      approval of the holders of a majority of the outstanding shares of Common
      Stock. (For this purpose and under the Investment Company Act,
      &#147;majority&#148; means the lesser of (i) 67% of the shares of each
      class of capital stock represented at a meeting at which more than 50% of
      the outstanding shares of each class of capital stock are represented or
      (ii) more than 50% of the outstanding shares.) No Fund may:</FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.</FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Make any
        investment inconsistent with the Fund&#146;s classification as a
        diversified company under the Investment Company Act.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.</FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Make investments
        for the purpose of exercising control or management.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.</FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Purchase or sell
        real estate, commodities or commodity contracts; provided that the Fund
        may invest in securities secured by real estate or interests therein or
        issued by companies that invest in real estate or interests therein,
        and the Fund may purchase and sell financial futures contracts and
        options thereon.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4.</FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Issue senior
        securities or borrow money except as permitted by Section 18 of the
        Investment Company Act.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">5.</FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Underwrite
        securities of other issuers except insofar as the Fund may be deemed an
        underwriter under the Securities Act of 1933, as amended, in selling
        portfolio securities.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.</FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Make loans to
        other persons, except (i) to the extent that the Fund may be deemed to
        be making loans by purchasing Corporate Loans, as a Co-Lender or
        otherwise, and other debt securities and entering into repurchase
        agreements in accordance with its investment objectives, policies and
        limitations, and (ii) the Fund may lend its portfolio securities in an
        amount not in excess of 33</FONT><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><SUP>&nbsp;1</SUP>
      </FONT><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">/</FONT><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">3</FONT><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of its total
        assets, taken at market value, provided that such loans shall be made
        in accordance with the guidelines set forth in this Prospectus.
        </FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.</FONT></DIV>
      </TD>
      <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Invest more than
        25% of its total assets in the securities of issuers in any one
        industry; provided that this limitation shall not apply with respect to
        obligations issued or guaranteed by the U.S. Government or by its
        agencies or instrumentalities; and provided further that to the extent
        that the Fund invests in Corporate Loans the Fund may invest more than
        25% and may invest up to 100% of its assets in securities of issuers in
        the industry group consisting of financial institutions and their
        holding companies, including commercial banks, thrift institutions,
        insurance companies and finance companies. For purposes of this
        restriction, the term &#147;issuer&#148; includes the borrower, the
        Agent Bank and any Intermediate Participant (as defined under
        &#147;Investment Objectives and Policies&#148;).</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
      &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional investment
      restrictions adopted by each Fund, which may be changed by the Board of
      Directors without stockholder approval, provide that no Fund
      may:</FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;
        &nbsp;Purchase securities of other investment companies, except to the
        extent that such purchases are permitted by applicable law. Applicable
        law currently prohibits the Fund from purchasing the securities of
        other investment companies except if immediately thereafter not more
        than (i) 3% of the total outstanding voting stock of such company is
        owned by the Fund, (ii) 5% of the Fund&#146;s total assets, taken at
        market value, would be invested in any one such company, (iii) 10% of
        the Fund&#146;s total assets, taken at market value, would be invested
        in such securities, and (iv) the Fund, together with other investment
        companies having the same investment adviser and companies controlled
        by such companies, owns not more than 10% of the total outstanding
        stock of any one closed-end investment company.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;
        &nbsp;Mortgage, pledge, hypothecate or in any manner transfer, as
        security for indebtedness, any securities owned or held by the Fund
        except as may be necessary in connection with borrowings mentioned in
        investment restriction (4) above or except as may be necessary in
        connection with transactions in financial futures contracts and options
        thereon.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;
        &nbsp;Purchase any securities on margin, except that the Fund may
        obtain such short-term credit as may be necessary for the clearance of
        purchases and sales of portfolio securities (the deposit or payment by
        the Fund of initial or variation margin in connection with financial
        futures contracts and options thereon is not considered the purchase of
        a security on margin).</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>

    <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
     <TR>
      <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
      <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;
        &nbsp;Make short sales of securities or maintain a short position or
        invest in put, call, straddle or spread options, except that the Fund
        may write, purchase and sell options and futures on portfolio
        securities and related indices or otherwise in connection with bona
        fide hedging activities.</FONT></DIV>
      </TD>
     </TR>
    </TABLE>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If a percentage
      restriction on the investment or use of assets set forth above is adhered
      to at the time a transaction is effected, later changes in percentages
      resulting from changing values will not be considered a
      violation.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM and Merrill
      Lynch, Pierce, Fenner &amp; Smith Incorporated (&#147;Merrill
      Lynch&#148;) are owned and controlled by Merrill Lynch &amp; Co., Inc.
      (&#147;ML &amp; Co.&#148;). Because of the affiliation of Merrill Lynch
      with FAM, each Fund is prohibited from engaging in certain transactions
      involving Merrill Lynch except pursuant to an exemptive order or
      otherwise in compliance with the provisions of the Investment Company Act
      and the rules and regulations thereunder. Included among such restricted
      transactions will be purchases from or sales to Merrill Lynch of
      securities in transactions in which it acts as principal.</FONT></DIV>
    <DIV><FONT
    SIZE="2">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds have
      established procedures for blocking the use of inside information in
      securities transactions (commonly referred to as &#147;Chinese Wall
      procedures&#148;). As a result, the Fund&#146;s purchase of a security in
      a private placement may deprive the Fund of investment in certain
      publicly traded securities of the same issuer and the Fund&#146;s
      purchase of a publicly traded security may deprive the Fund of the
      opportunity to purchase certain privately placed securities of the same
      issuer. Also, in relation to other funds managed by the same portfolio
      manager as the Fund, if one fund buys a security that is publicly traded
      or privately placed, respectively, the other fund may be deprived of the
      opportunity to buy a security of the same issuer that is privately placed
      or publicly traded, respectively.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
    <A NAME="tx38"></A>
    Portfolio Composition</B></FONT></DIV>
    <DIV><FONT
    SIZE="1">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman',
      Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Although the
      investment portfolios of the Funds must satisfy the same standards with
      respect to credit quality, the actual securities owned by each Fund are
      different. As a result, there are certain differences in the composition
      of the three investment portfolios. The tables below set forth ratings
      information concerning long-term debt obligations in each Fund&#146;s
      portfolio as of February 29, 2000.</FONT></DIV>
    <DIV><FONT
    SIZE="5">&nbsp;</FONT></DIV>
    <DIV ALIGN="left"><FONT
    SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"></FONT></DIV>
    <DIV></DIV>

    <TABLE ALIGN="center" WIDTH="55%" CELLSPACING=0 CELLPADDING=0>
     <TR>
      <TH VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="68" HEIGHT="0"
        COLSPAN="8">&nbsp;</TH>
     </TR>
     <TR>
      <TD ALIGN="left" COLSPAN="8"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies</I></FONT></TD>
     </TR>
     <TR>
      <TH VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="68" HEIGHT="0"
        COLSPAN="8">&nbsp;</TH>
     </TR>
     <TR>
      <TH VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"> <DIV
        ALIGN="center"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><B>S&amp;P*</B></FONT> <HR NOSHADE ALIGN="center" WIDTH="95%"
        SIZE="1"> </DIV>
      </TH>
      <TH WIDTH="9" HEIGHT="0" VALIGN="bottom"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center" COLSPAN="2" HEIGHT="0"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Number Of
      <BR>
      Issues</B></FONT> <HR NOSHADE ALIGN="center" WIDTH="95%" SIZE="1"> </TH>
      <TH VALIGN="bottom" NOWRAP ALIGN="center" COLSPAN="2" HEIGHT="0"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Value
      <BR>
      (In Thousands)**</B></FONT> <HR NOSHADE ALIGN="center" WIDTH="95%"
        SIZE="1"> </TH>
      <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center" HEIGHT="0"><FONT
      SIZE="1" COLOR="#000000" FACE="'Times New Roman',
        Times"><B>Percent</B></FONT> <HR NOSHADE ALIGN="center" WIDTH="95%"
        SIZE="1"> </TH>
     </TR>
     <TR>
      <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">BBB</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">5</FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$&nbsp;&nbsp;12,519</FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4.40</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left" WIDTH="0" HEIGHT="0"> <DIV
        ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">BB</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">29</FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">35,340</FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">12.42</FONT></TD>
      <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">B</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">105</FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">146,984</FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">51.65</FONT></TD>
      <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">CCC</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">15</FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">13,123</FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">4.61</FONT></TD>
      <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">CC</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3</FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3,380</FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.19</FONT></TD>
      <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">D</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3</FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">994</FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">0.35</FONT></TD>
      <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">NR</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">36</FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">72,233</FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">25.38</FONT></TD>
      <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD WIDTH="59" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;</FONT></TD>
      <TD WIDTH="86" HEIGHT="0"><FONT
      SIZE="1"> <HR ALIGN="right" WIDTH="21%" SIZE="1" NOSHADE> </FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;</FONT></TD>
      <TD WIDTH="114" HEIGHT="0"><FONT
      SIZE="1"> <HR ALIGN="right" WIDTH="70%" SIZE="1" NOSHADE> </FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;</FONT></TD>
      <TD WIDTH="75" HEIGHT="0"><FONT
      SIZE="1"> <HR ALIGN="right" WIDTH="75%" SIZE="1" NOSHADE> </FONT></TD>
      <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD VALIGN="bottom" ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
      SIZE="3" COLOR="#000000" FACE="'Times New Roman',
        Times">&nbsp;</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">196</FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">$284,573</FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman',
        Times">100.00</FONT></TD>
      <TD VALIGN="bottom" ALIGN="left" WIDTH="0" HEIGHT="0"> <DIV
        ALIGN="left"><FONT
      SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">%</FONT></DIV>
      </TD>
     </TR>
     <TR>
      <TD WIDTH="59" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
      <TD WIDTH="9" HEIGHT="0"><FONT
      SIZE="1">&nbsp;</FONT></TD>
      <TD WIDTH="86" HEIGHT="0"><FONT
      SIZE="1"> <HR ALIGN="right" WIDTH="21%" SIZE="2" NOSHADE> </FONT></TD>
      <TD WIDTH="18" HEIGHT="0"><FONT
      SIZE="1">&nbsp;</FONT></TD>
      <TD WIDTH="114" HEIGHT="0"><FONT
      SIZE="1"> <HR ALIGN="right" WIDTH="70%" SIZE="2" NOSHADE> </FONT></TD>
      <TD WIDTH="56" HEIGHT="0"><FONT
      SIZE="1">&nbsp;</FONT></TD>
      <TD WIDTH="75" HEIGHT="0"><FONT
      SIZE="1"> <HR ALIGN="right" WIDTH="75%" SIZE="2" NOSHADE> </FONT></TD>
      <TD WIDTH="0" HEIGHT="0"><FONT
      SIZE="1">&nbsp;&nbsp;</FONT></TD>
     </TR>
     <TR>
      <TD COLSPAN=9 HEIGHT="0"> <DIV ALIGN="left"> <HR SIZE=1 NOSHADE> </DIV>
      </TD>
      <TR>
       <TD COLSPAN=8 ALIGN="left"><FONT
       SIZE="2" COLOR="#000000" FACE="'Times New Roman',
         Times">&nbsp;*&nbsp;Ratings: S&amp;P&#146;s rating categories may be
         modified further by a plus (+) or minus (-) in AA, A and BBB ratings.
         See Exhibit IV&#151;&#147;Ratings of Corporate Bonds.&#148;</FONT></TD>
       <TR>
        <TD COLSPAN=8 ALIGN="left"><FONT
        SIZE="2" COLOR="#000000" FACE="'Times New Roman',
          Times">**&nbsp;Representing 98% of total market value of $291.1
          million as of February 29, 2000.</FONT></TD>
        <TD COLSPAN=8 WIDTH="21"><FONT
        SIZE="5">&nbsp;</FONT></TD>
        <TR>
         <TD COLSPAN=8 ALIGN="left">&nbsp;</TD>
         <TD COLSPAN=8 WIDTH="21">&nbsp;</TD>
         <TR>
          <TD COLSPAN=8 ALIGN="left"><FONT
          SIZE="2" COLOR="#000000" FACE="'Times New Roman',
            Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies II</I></FONT></TD>
          <TD COLSPAN=8 WIDTH="21"><FONT
          SIZE="1">&nbsp;</FONT></TD>
          <TR>
           <TD COLSPAN=8 ALIGN="left">&nbsp;</TD>
           <TD COLSPAN=8 WIDTH="21">&nbsp;</TD>
           <TR>
            <TH VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"> <DIV
              ALIGN="center"><FONT
            SIZE="1" COLOR="#000000" FACE="'Times New Roman',
              Times"><B>S&amp;P*</B></FONT> <HR NOSHADE ALIGN="center"
              WIDTH="95%" SIZE="1"> </DIV>
            </TH>
            <TH WIDTH="9" HEIGHT="0"> <DIV ALIGN="center"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></DIV>
            </TH>
            <TH VALIGN="bottom" NOWRAP ALIGN="center" COLSPAN="2" HEIGHT="0">
              <DIV ALIGN="center"><FONT
            SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Number
              Of
            <BR>
            Issues</B></FONT> <HR NOSHADE ALIGN="center" WIDTH="95%" SIZE="1">
              </DIV>
            </TH>
            <TH VALIGN="bottom" NOWRAP ALIGN="center" COLSPAN="2" HEIGHT="0">
              <DIV ALIGN="center"><FONT
            SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Value
            <BR>
            (In Thousands)**</B></FONT> <HR NOSHADE ALIGN="center" WIDTH="95%"
              SIZE="1"> </DIV>
            </TH>
            <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center" HEIGHT="0">
              <DIV ALIGN="center"><FONT
            SIZE="1" COLOR="#000000" FACE="'Times New Roman',
              Times"><B>Percent</B></FONT> <HR NOSHADE ALIGN="center"
              WIDTH="95%" SIZE="1"> </DIV>
            </TH>
           </TR>
           <TR>
            <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">BBB</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">4</FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">$&nbsp;&nbsp;11,304</FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
              <DIV ALIGN="right"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">1.69</FONT></DIV>
            </TD>
            <TD VALIGN="bottom" ALIGN="left" WIDTH="0" HEIGHT="0"> <DIV
              ALIGN="left"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">%</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">BB</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">47</FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">156,791</FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
              <DIV ALIGN="right"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">23.41</FONT></DIV>
            </TD>
            <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">&nbsp;</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">B</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">142</FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">337,382</FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
              <DIV ALIGN="right"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">50.38</FONT></DIV>
            </TD>
            <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">&nbsp;</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">CCC</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">20</FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">45,602</FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
              <DIV ALIGN="right"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">6.81</FONT></DIV>
            </TD>
            <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">&nbsp;</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">D</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">3</FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">2,449</FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
              <DIV ALIGN="right"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">0.37</FONT></DIV>
            </TD>
            <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">&nbsp;</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">NR</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">31</FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">116,094</FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
              <DIV ALIGN="right"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">17.34</FONT></DIV>
            </TD>
            <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">&nbsp;</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD WIDTH="59" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;</FONT></TD>
            <TD WIDTH="86" HEIGHT="0"><FONT
            SIZE="1"> <HR ALIGN="right" WIDTH="21%" SIZE="1" NOSHADE>
              </FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;</FONT></TD>
            <TD WIDTH="114" HEIGHT="0"><FONT
            SIZE="1"> <HR ALIGN="right" WIDTH="70%" SIZE="1" NOSHADE>
              </FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;</FONT></TD>
            <TD WIDTH="75" HEIGHT="0"> <DIV ALIGN="right"><FONT
            SIZE="1"> </FONT></DIV>
            <FONT
            SIZE="1"> <HR ALIGN="right" WIDTH="75%" SIZE="1" NOSHADE>
              </FONT></TD>
            <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">247</FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
              HEIGHT="0"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">$669,622</FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
              <DIV ALIGN="right"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">100.00</FONT></DIV>
            </TD>
            <TD VALIGN="bottom" ALIGN="left" WIDTH="0" HEIGHT="0"> <DIV
              ALIGN="left"><FONT
            SIZE="2" COLOR="#000000" FACE="'Times New Roman',
              Times">%</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD WIDTH="59" HEIGHT="0"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></TD>
            <TD WIDTH="9" HEIGHT="0"><FONT
            SIZE="1">&nbsp;</FONT></TD>
            <TD WIDTH="86" HEIGHT="0"><FONT
            SIZE="1"> <HR ALIGN="right" WIDTH="21%" SIZE="2" NOSHADE>
              </FONT></TD>
            <TD WIDTH="18" HEIGHT="0"><FONT
            SIZE="1">&nbsp;</FONT></TD>
            <TD WIDTH="114" HEIGHT="0"><FONT
            SIZE="1"> <HR ALIGN="right" WIDTH="70%" SIZE="2" NOSHADE>
              </FONT></TD>
            <TD WIDTH="56" HEIGHT="0"><FONT
            SIZE="1">&nbsp;</FONT></TD>
            <TD WIDTH="75" HEIGHT="0"> <DIV ALIGN="right"><FONT
            SIZE="1"> </FONT></DIV>
            <FONT
            SIZE="1"> <HR ALIGN="right" WIDTH="75%" SIZE="2" NOSHADE>
              </FONT></TD>
            <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
            SIZE="1">&nbsp;&nbsp;</FONT></DIV>
            </TD>
           </TR>
           <TR>
            <TD COLSPAN=9 HEIGHT="0"> <DIV ALIGN="left"> <HR SIZE=1 NOSHADE>
              </DIV>
            </TD>
            <TR>
             <TD COLSPAN=8 ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;*&nbsp;Ratings: S&amp;P&#146;s rating categories
               may be modified further by a plus (+) or minus (-) in AA, A and
               BBB ratings. See Exhibit IV&#151;&#147;Ratings of Corporate
               Bonds.&#148;</FONT></TD>
             <TR>
              <TD COLSPAN=8 ALIGN="left"><FONT
              SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                Times">**&nbsp;Representing 97% of total market value of $689.6
                million as of February 29, 2000.</FONT></TD>
              <TD COLSPAN=8 WIDTH="21"><FONT
              SIZE="5">&nbsp;</FONT></TD>
              <TR>
               <TD COLSPAN=8 ALIGN="left">&nbsp;</TD>
               <TD COLSPAN=8 WIDTH="21">&nbsp;</TD>
               <TR>
               <TD COLSPAN=8 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies
                 III</I></FONT></TD>
               <TD COLSPAN=8 WIDTH="21"><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TR>
               <TD COLSPAN=8 ALIGN="left">&nbsp;</TD>
               <TD COLSPAN=8 WIDTH="21">&nbsp;</TD>
               <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59" HEIGHT="0">
                 <DIV ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P*</B></FONT> <HR NOSHADE ALIGN="center"
                 WIDTH="95%" SIZE="1"> </DIV>
               </TH>
               <TH WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center" COLSPAN="2"
                 HEIGHT="0"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Number Of
               <BR>
               Issues</B></FONT> <HR NOSHADE ALIGN="center" WIDTH="95%"
                 SIZE="1"> </TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center" COLSPAN="2"
                 HEIGHT="0"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Value
               <BR>
               (In Thousands)**</B></FONT> <HR NOSHADE ALIGN="center"
                 WIDTH="95%" SIZE="1"> </TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"
                 HEIGHT="0"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Percent</B></FONT> <HR NOSHADE ALIGN="center"
                 WIDTH="95%" SIZE="1"> </TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">2</FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;1,447</FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
                 <DIV ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1.09</FONT></DIV>
               </TD>
               <TD VALIGN="bottom" ALIGN="left" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">%</FONT></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">39</FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">38,346</FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
                 <DIV ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">28.81</FONT></DIV>
               </TD>
               <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">98</FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">59,379</FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
                 <DIV ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">44.60</FONT></DIV>
               </TD>
               <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">10</FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,720</FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
                 <DIV ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5.80</FONT></DIV>
               </TD>
               <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">D</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1</FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">640</FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
                 <DIV ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">0.48</FONT></DIV>
               </TD>
               <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">18</FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">25,590</FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
                 <DIV ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">19.22</FONT></DIV>
               </TD>
               <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="59" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD WIDTH="86" HEIGHT="0"><FONT
               SIZE="1"> <HR ALIGN="right" WIDTH="21%" SIZE="1" NOSHADE>
                 </FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD WIDTH="114" HEIGHT="0"><FONT
               SIZE="1"> <HR ALIGN="right" WIDTH="70%" SIZE="1" NOSHADE>
                 </FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD WIDTH="75" HEIGHT="0"> <DIV ALIGN="right"><FONT
               SIZE="1"> </FONT></DIV>
               <FONT
               SIZE="1"> <HR ALIGN="right" WIDTH="75%" SIZE="1" NOSHADE>
                 </FONT></TD>
               <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left" WIDTH="59"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="86"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">168</FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="114" NOWRAP ALIGN="right"
                 HEIGHT="0"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">$133,122</FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right" WIDTH="75" HEIGHT="0">
                 <DIV ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">100.00</FONT></DIV>
               </TD>
               <TD VALIGN="bottom" ALIGN="left" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">%</FONT></DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="59" HEIGHT="0"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD WIDTH="9" HEIGHT="0"><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD WIDTH="86" HEIGHT="0"><FONT
               SIZE="1"> <HR ALIGN="right" WIDTH="21%" SIZE="2" NOSHADE>
                 </FONT></TD>
               <TD WIDTH="18" HEIGHT="0"><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD WIDTH="114" HEIGHT="0"><FONT
               SIZE="1"> <HR ALIGN="right" WIDTH="70%" SIZE="2" NOSHADE>
                 </FONT></TD>
               <TD WIDTH="56" HEIGHT="0"><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD WIDTH="75" HEIGHT="0"> <DIV ALIGN="right"><FONT
               SIZE="1"> </FONT></DIV>
               <FONT
               SIZE="1"> <HR ALIGN="right" WIDTH="75%" SIZE="2" NOSHADE>
                 </FONT></TD>
               <TD WIDTH="0" HEIGHT="0"> <DIV ALIGN="left"><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;*</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ratings: S&amp;P&#146;s rating categories may be
                 modified further by a plus (+) or minus (-) in AA, A and BBB
                 ratings. See Exhibit IV&#151;&#147;Ratings of Corporate
                 Bonds.&#148;</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">**</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Representing 96% of total market value of $138.9
                 million as of February 29, 2000.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx39"></A>
             Portfolio Transactions</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               procedures for engaging in portfolio transactions are the same
               for each Fund. Subject to policies established by the Board of
               Directors of each Fund, FAM is primarily responsible for the
               execution of each Fund&#146;s portfolio transactions. In
               executing such transactions, FAM seeks to obtain the best
               results for each Fund, taking into account such factors as price
               (including the applicable brokerage commission or dealer
               spread), size of order, difficulty of execution and operational
               facilities of the firm involved and the firm&#146;s risk in
               positioning a block of securities. While FAM generally seeks
               reasonably competitive commission rates, the Funds do not
               necessarily pay the lowest commission or spread
               available.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;None of
               the Funds has any obligation to deal with any broker or dealer
               in the execution of transactions in portfolio securities.
               Subject to obtaining the best price and execution, securities
               firms that provide supplemental investment research to FAM,
               including Merrill Lynch, may receive orders for transactions by
               a Fund. Information so received will be in addition to, and not
               in lieu of, the services required to be performed by FAM under
               its investment advisory agreements with the Funds, and the
               expenses of FAM will not necessarily be reduced as a result of
               the receipt of such supplemental information.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               purchases Corporate Loans in individually negotiated
               transactions with commercial banks, thrifts, insurance
               companies, finance companies and other financial institutions.
               In selecting such financial institutions, FAM may consider,
               among other factors, the financial strength, professional
               ability, level of service and research capability of the
               institution. While such financial institutions generally are not
               required to repurchase Corporate Loans which they have sold,
               they may act as principal or on an agency basis in connection
               with the Fund&#146;s disposition of Corporate Loans.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               invests in securities that are primarily traded in the
               over-the-counter markets, and each Fund normally deals directly
               with the dealers who make markets in the securities involved,
               except in those circumstances where better prices and execution
               are available elsewhere. Under the Investment Company Act,
               except as permitted by exemptive order, persons affiliated with
               a Fund are prohibited from dealing with the Fund as principals
               in the purchase and sale of securities. Since transactions in
               the over-the-counter markets usually involve transactions with
               dealers acting as principals for their own account, the Funds do
               not deal with affiliated persons, including Merrill Lynch and
               its affiliates, in connection with such transactions. An
               affiliated person of a Fund may serve as its broker in
               over-the-counter transactions conducted on an agency
               basis.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx40"></A>
             Portfolio Turnover</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Generally, no Fund purchases securities for short-term
               trading profits. However, any Fund may dispose of securities
               without regard to the time that they have been held when such
               action, for defensive or other reasons, appears advisable to
               FAM. (The portfolio turnover rate is calculated by dividing the
               lesser of purchases or sales of portfolio securities for the
               particular fiscal year by the monthly average of the value of
               the portfolio securities owned by a Fund during the particular
               fiscal year. For purposes of determining this rate, all
               securities whose maturities at the time of acquisition are one
               year or less are excluded.) A high portfolio turnover rate
               results in greater transaction costs, which are borne directly
               by a Fund, and also has certain tax consequences for
               stockholders. The portfolio turnover rate for each Fund for the
               periods indicated is set forth below:</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="488" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B></B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Year
                 Ended
               <BR>
               February 29, 2000</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Year
                 Ended
               <BR>
               February 28, 1999</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="101" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">48.73%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">61.30%</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="2">&nbsp;</FONT></TD>
              <TR>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Year
                 Ended
               <BR>
               February 29, 2000</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Period March 27, 1998&#134;
               <BR>
               To February 28, 1999</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="101" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies II</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">61.76%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">89.76%</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="2">&nbsp;</FONT></TD>
              <TR>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Year
                 Ended
               <BR>
               February 29, 2000</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Period July 31, 1998&#134;
               <BR>
               To February 28, 1999</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="101" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies III</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">50.07%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">50.99%</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="2%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#134;</FONT></DIV>
               </TD>
               <TD WIDTH="98%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Commencement of operations.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx41"></A>
             Net Asset Value</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The net
               asset value per share of Common Stock of each Fund is determined
               as of the close of business on the NYSE (generally, 4:00 p.m.,
               Eastern time) on the last business day in each week. For
               purposes of determining the net asset value of a share of Common
               Stock of each Fund, the value of the securities held by a Fund
               plus any cash or other assets (including interest accrued but
               not yet received) minus all liabilities (including accrued
               expenses) and the aggregate liquidation value of the outstanding
               shares of preferred stock is divided by the total number of
               shares of Common Stock outstanding at such time. Expenses,
               including the fees payable to FAM, are accrued
               daily.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate
               Loans in which each Fund invests will be valued in accordance
               with guidelines established by the Board of Directors. Under the
               Funds&#146; current guidelines, the Funds will utilize the
               valuations of corporate loans furnished by an independent
               third-party pricing service approved by the respective Board of
               Directors. The pricing service typically values Corporate Loans
               for which the pricing service can obtain at least two price
               quotations from banks or dealers in Corporate Loans by
               calculating the mean of the last available bid and asked prices
               in the market for such Corporate Loans, and then using the mean
               of those two means. For those Corporate Loans for which the
               pricing service can obtain one price quote, the pricing service
               will value the Corporate Loan at the mean between the bid and
               asked price for such Corporate Loan. For the limited number of
               Corporate Loans for which no reliable price quotes are
               available, such Corporate Loans will be valued by the pricing
               service through the use of pricing matrices to determine
               valuations. If the pricing service does not provide a value for
               a Corporate Loan, the Investment Adviser will value the
               Corporate Loan at fair value, which is intended to be market
               value. In valuing a Corporate Loan at fair value, the Investment
               Adviser will consider, among other factors (i) the
               creditworthiness of the borrower and any intermediate
               participants, (ii) the current interest rate period until the
               next interest rate resets and maturity of the Corporate Loan,
               (iii) recent prices in the market for similar Corporate Loans,
               if any and (iv) recent prices in the market for instruments of
               similar quality, rate period until the next interest rate reset
               and maturity.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
               portfolio securities (other than short-term obligations but
               including listed issues) may be valued on the basis of prices
               furnished by one or more pricing services which determine prices
               for normal, institutional-size trading units of such securities
               using market information, transactions for comparable securities
               and various relationships between securities which are generally
               recognized by institutional traders. In certain circumstances,
               portfolio securities are valued at the last sale price on the
               exchange that is the primary market for such securities, or the
               last quoted bid price for those securities for which the
               over-the-counter market is the primary market or for listed
               securities in which there were no sales during the day. The
               value of interest rate swaps, caps and floors is determined in
               accordance with a formula and then confirmed periodically by
               obtaining a bank quotation. Positions in options are valued at
               the last sale price on the market where any such option is
               principally traded. Obligations with remaining maturities of 60
               days or less are valued at amortized cost unless this method no
               longer produces fair valuations. Repurchase agreements are
               valued at cost plus accrued interest. Rights or warrants to
               acquire stock, or stock acquired pursuant to the exercise of a
               right or warrant, may be valued taking into account various
               factors such as original cost to the Fund, earnings and net
               worth of the issuer, market prices for securities of similar
               issuers, assessment of the issuer&#146;s future prosperity,
               liquidation value or third party transactions involving the
               issuer&#146;s securities. Securities for which there exist no
               price quotations or valuations and all other assets are valued
               at fair value as determined in good faith by or on behalf of the
               Board of Directors of each Fund.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               determines and makes available for publication the net asset
               value of its Common Stock weekly. Currently, the net asset
               values of shares of publicly traded closed-end investment
               companies investing in debt securities are published in
               Barron&#146;s, the Monday edition of The Wall Street Journal,
               and the Monday and Saturday editions of The New York
               Times.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx42"></A>
             Capital Stock</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               has outstanding Common Stock. The Common Stock of each Fund is
               traded on the NYSE. The shares of Common Stock of Debt
               Strategies commenced trading on the NYSE on June 2, 1997. As of
               May 31,




             2000, the net asset value per share of Common Stock of Debt
               Strategies was $6.75 and the market price per share was $6.0625.
               The shares of Common Stock of Debt Strategies II commenced
               trading on the NYSE on March 30, 1998. As of May 31, 2000, the
               net asset value per share of Common Stock of Debt Strategies II
               was $8.10 and the market price per share was $7.125. The shares
               of Common Stock of Debt Strategies III commenced trading on the
               NYSE on August 3, 1998. As of May 31, 2000, the net asset value
               per share of Common Stock of Debt Strategies III was $8.84 and
               the market price per share was $8.1875.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               is authorized to issue 200,000,000 shares of capital stock, all
               of which shares initially were classified as Common Stock. The
               Board of Directors of each Fund is authorized to classify or
               reclassify any unissued shares of capital stock by setting or
               changing the preferences, conversion or other rights, voting
               powers, restrictions, limitations as to dividends,
               qualifications, or terms or conditions of
               redemption.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;Common Stock</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Holders
               of each Fund&#146;s Common Stock are entitled to share pro rata
               in the net assets of a Fund available for distribution to
               holders of the Common Stock. See &#147;Voting Rights&#148;
               below. Holders of a Fund&#146;s Common Stock do not have
               preemptive or conversion rights and shares of a Fund&#146;s
               Common Stock are not redeemable. The outstanding shares of
               Common Stock of each Fund are fully paid and
               nonassessable.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the
               event that a Fund issues preferred stock and so long as any
               shares of that Fund&#146;s preferred stock are outstanding,
               holders of that Fund&#146;s Common Stock will not be entitled to
               receive any net income of or other distributions from that Fund
               unless all accumulated dividends on preferred stock have been
               paid, and unless asset coverage (as defined in the Investment
               Company Act) with respect to preferred stock would be at least
               200% after giving effect to such distributions.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;Certain Provisions of the
               Charter</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
               Fund&#146;s Charter includes provisions that could have the
               effect of limiting the ability of other entities or persons to
               acquire control of a Fund or to change the composition of its
               Board of Directors and could have the effect of depriving
               stockholders of an opportunity to sell their shares at a premium
               over prevailing market prices by discouraging a third party from
               seeking to obtain control of the Fund. A Director may be removed
               from office with or without cause by vote of the holders of at
               least 66</FONT><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman',
               Times"><SUP>&nbsp;2</SUP>
             </FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">/</FONT><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman',
               Times">3</FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of the
               votes entitled to be voted on the matter. A Director elected by
               all of the holders of capital stock may be removed only by
               action of such holders. </FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
               addition, the Charter of each Fund requires the favorable vote
               of the holders of at least 66</FONT><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman',
               Times"><SUP>&nbsp;2</SUP>
             </FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">/</FONT><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman',
               Times">3</FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of all
               of a Fund&#146;s shares of capital stock, then entitled to be
               voted, to approve, adopt or authorize the following:
               </FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">a
                 merger or consolidation or statutory share exchange of the
                 Fund with any other corporation or entity,</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">a sale
                 of all or substantially all of the Fund&#146;s assets (other
                 than in the regular course of the Fund&#146;s investment
                 activities), or</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">a
                 liquidation or dissolution of the Fund,</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">unless
               such action has been approved, adopted or authorized by the
               affirmative vote of at least two-thirds of the total number of
               Directors fixed in accordance with the by-laws, in which case
               the affirmative vote of a majority of all of the votes entitled
               to be cast by stockholders of the Fund is required.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
               addition, conversion of a Fund to an open-end investment company
               would require an amendment to that Fund&#146;s Charter. The
               amendment would have to be declared advisable by the Board of
               Directors prior to its submission to stockholders. Such an
               amendment would require the affirmative vote of the holders of
               at least 66</FONT><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman',
               Times"><SUP>&nbsp;2</SUP>
             </FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">/</FONT><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman',
               Times">3</FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% of a
               Fund&#146;s outstanding shares of capital stock (including any
               other preferred stock) entitled to be voted on the matter,
               voting as a single class (or a majority of such shares if the
               amendment was previously approved, adopted or authorized by at
               least two-thirds of the total number of Directors fixed in
               accordance with the by-laws), and assuming preferred stock is
               issued, the affirmative vote of at least a majority of
               outstanding shares of
             preferred stock of that Fund, voting as a separate class. Such a
               vote also would satisfy a separate requirement in the Investment
               Company Act that the change be approved by the stockholders.
               Stockholders of an open-end investment company may require the
               company to redeem their shares of common stock at any time
               (except in certain circumstances as authorized by or under the
               Investment Company Act) at their net asset value, less such
               redemption charge, if any, as might be in effect at the time of
               a redemption. All redemptions will be made in cash. If the Fund
               is converted to an open-end investment company, it could be
               required to liquidate portfolio securities to meet requests for
               redemption and the Common Stock no longer would be listed on a
               stock exchange. Conversion to an open-end investment company
               would also require redemption of all outstanding shares of
               preferred stock and would require changes in certain of a
               Fund&#146;s investment policies and restrictions, such as those
               relating to the issuance of senior securities, the borrowing of
               money and the purchase of illiquid securities.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board
               of Directors of each Fund has determined that the 66</FONT><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman',
               Times"><SUP>&nbsp;2</SUP>
             </FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">/</FONT><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman',
               Times">3</FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">% voting
               requirements described above, which are greater than the minimum
               requirements under Maryland law or the Investment Company Act,
               are in the best interests of stockholders generally. Reference
               should be made to the Charter of each Fund on file with the SEC
               for the full text of these provisions. </FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx43"></A>
             Management of the Funds</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Directors and Officers.&nbsp;&nbsp;&nbsp;&nbsp;</I>The
               Board of Directors of Debt Strategies, Debt Strategies II and
               Debt Strategies III currently consists of the same seven
               persons, five of whom are not &#147;interested persons,&#148; as
               defined in the Investment Company Act. The Directors of each
               Fund are responsible for the overall supervision of the
               operations of the Fund and perform the various duties imposed on
               the directors of investment companies by the Investment Company
               Act and under applicable Maryland law. The Funds have the same
               slate of officers. For further information regarding the
               Directors and officers of each Fund, see &#147;Item 2. Election
               of Directors&#148; and Exhibit I&#151;&#147;Information
               Pertaining to Each Fund.&#148;</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               portfolios of each fund are managed by Richard C. Kilbride and
               Gilles Marchand. After the Merger, the Surviving Fund will be
               managed by the same management team. The portfolio managers are
               primarily responsible for the management of the applicable
               Fund&#146;s portfolio. Biographical information about Messrs.
               Kilbride and Marchand is contained in Exhibit I to this Proxy
               Statement and Prospectus.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Management and Advisory
               Arrangements.&nbsp;&nbsp;&nbsp;&nbsp;</I>FAM, which is owned and
               controlled by ML &amp; Co., serves as the investment adviser for
               each Fund pursuant to separate investment advisory agreements
               that, except for their termination dates, are identical. FAM
               provides each Fund with the same investment advisory and
               management services. MLIM and its affiliates (including FAM) act
               as investment advisers to more than 100 registered investment
               companies and offers services to individuals and institutional
               accounts. As of April 2000, MLIM and its affiliates had a total
               of approximately $568.0 billion in investment company and other
               portfolio assets under management. FAM is a limited partnership,
               the partners of which are ML &amp; Co. and Princeton Services,
               Inc. FAM was organized as an investment adviser in 1977 and
               offers investment advisory services to more than 50 registered
               investment companies. The principal business address of FAM is
               800 Scudders Mill Road, Plainsboro, New Jersey
               08536.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
               Fund&#146;s investment advisory agreement with FAM provides
               that, subject to the supervision of the Board of Directors of
               the Fund, FAM is responsible for the actual management of the
               Fund&#146;s portfolio. The responsibility for making decisions
               to buy, sell or hold a particular security for each Fund rests
               with FAM, subject to review by the Board of Directors of that
               Fund.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM
               provides the portfolio management for each Fund. Such portfolio
               management considers analyses from various sources (including
               brokerage firms with which each Fund does business), makes the
               necessary investment decisions, and places orders for
               transactions accordingly. FAM also is responsible for the
               performance of certain administrative and management services
               for each Fund.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

             &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the services
               provided by FAM under each Fund&#146;s investment advisory
               agreement, each Fund pays a monthly fee at an annual rate of
               0.60% of its average weekly net assets plus the proceeds of any
               outstanding borrowings used for leverage (i.e., the average
               weekly value of the total assets of a Fund, including proceeds
               from the issuance of preferred stock, minus the sum of accrued
               liabilities of the Fund, any accrued and unpaid interest on
               outstanding borrowings and accumulated dividends on its shares
               of preferred stock). For purposes of this calculation, average
               weekly net assets are determined at the end of each month on the
               basis of the average net assets of the Fund for each week during
               the month. The assets for each weekly period are determined by
               averaging the net assets at the last business day of a week with
               the net assets at the last business day of the prior week. After
               the Merger, the Surviving Fund would pay FAM a monthly fee at
               the annual rate of 0.60% of its average weekly net assets plus
               the proceeds of any outstanding borrowings used for leverage as
               described above.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each
               Fund&#146;s investment advisory agreement obligates FAM to
               provide investment advisory services and to pay all compensation
               of and furnish office space for officers and employees of a Fund
               connected with investment and economic research, trading and
               investment management of a Fund, as well as the compensation of
               all Directors of a Fund who are affiliated persons of FAM or any
               of its affiliates. Each Fund pays all other expenses incurred in
               the operation of the Fund, including, among other things,
               expenses for legal and auditing services, taxes, costs of
               printing proxies, listing fees, stock certificates and
               stockholder reports, charges of the custodian and the transfer
               agent, dividend disbursing agent and registrar, SEC fees, fees
               and expenses of unaffiliated Directors, accounting and pricing
               costs, insurance, interest, brokerage costs, litigation and
               other extraordinary or non-recurring expenses, mailing and other
               expenses properly payable by the Fund. FAM provides accounting
               services to each Fund, and each Fund reimburses FAM for its
               respective costs in connection with such services.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unless
               earlier terminated as described below, the investment advisory
               agreement between each Fund and FAM will continue from year to
               year if approved annually (a) by the Board of Directors of a
               Fund or by a majority of the outstanding shares of a Fund and
               (b) by a majority of the Directors of a Fund who are not parties
               to such contract or &#147;interested persons,&#148; as defined
               in the Investment Company Act, of any such party. The contract
               is not assignable and it may be terminated without penalty on 60
               days&#146; written notice at the option of either party thereto
               or by the vote of the stockholders of the Fund.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Securities held by a Fund may also be held by, or be
               appropriate investments for, other funds or investment advisory
               clients for which FAM or its affiliates act as an adviser.
               Because of different objectives or other factors, a particular
               security may be bought for an advisory client when other clients
               are selling the same security. If purchases or sales of
               securities by FAM for a Fund or other funds for which it acts as
               investment adviser or for advisory clients arise for
               consideration at or about the same time, transactions in such
               securities will be made, insofar as feasible, for the respective
               funds and clients in a manner deemed equitable to all.
               Transactions effected by FAM (or its affiliates) on behalf of
               more than one of its clients during the same period may increase
               the demand for securities being purchased or the supply of
               securities being sold, causing an adverse effect on
               price.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx44"></A>
             Code of Ethics</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board
               of Directors of each Fund has approved a Code of Ethics pursuant
               to Rule 17j-l under the Investment Company Act that covers each
               Fund and FAM (collectively, the &#147;Codes&#148;). The Codes
               significantly restrict the personal investing activities of all
               employees of FAM and, as described below, impose additional,
               more onerous, restrictions on Fund investment
               personnel.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Codes
               require that all employees of FAM preclear any personal
               securities investment (with limited exceptions, such as mutual
               funds, high quality short-term securities and direct obligations
               of the U.S. Government). The preclearance requirement and
               associated procedures are designed to identify any substantive
               prohibition or limitation applicable to the proposed investment.
               The substantive restrictions applicable to all employees of FAM
               include a ban on acquiring any securities in a &#147;hot&#148;
               initial public offering and a prohibition from profiting on
               short-term trading securities. In addition, no employee may
               purchase or sell any security that at the time is being
               purchased or sold (as the case may be), or to the knowledge of
               the employee is being considered for purchase or sale, by any
               fund advised by FAM. Furthermore, the Codes provide for trading
             &#147;blackout periods&#148; which prohibit trading by investment
               personnel of each Fund within seven calendar days before or
               after trading by a Fund in the same or equivalent
               security.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx45"></A>
             Voting Rights</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voting
               rights are identical for the holders of shares of each
               Fund&#146;s Common Stock. Holders of each Fund&#146;s Common
               Stock are entitled to one vote for each share held. The shares
               of each Fund&#146;s Common Stock do not have cumulative voting
               rights, which means that the holders of more than 50% of the
               shares of a Fund&#146;s Common Stock voting for the election of
               Directors can elect all of the Directors standing for election
               by such holders, and, in such event, the holders of the
               remaining shares of a Fund&#146;s Common Stock will not be able
               to elect any of such Directors.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx46"></A>
             Stockholder Inquiries</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Stockholder inquiries with respect to any Fund may be
               addressed to such Fund by telephone at (609) 282-2800 or at the
               address set forth on the cover page of this Proxy Statement and
               Prospectus.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx47"></A>
             Dividends and Distributions</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               Funds&#146; current policies with respect to dividends and
               distributions relating to shares of their Common Stock are
               identical. Each Fund intends to distribute substantially all of
               its net investment income monthly. All net realized long-term or
               short-term capital gains, if any, are distributed pro rata at
               least annually to holders of shares of a Fund&#146;s Common
               Stock. For Federal tax purposes, a Fund is required to
               distribute substantially all of its net investment income for
               each year. Under the Investment Company Act, a Fund is not
               permitted to incur indebtedness unless immediately after such
               inccurrence the Fund has an asset coverage of 300% of the
               aggregate outstanding principal balance of indebtedness.
               Additionally, under the Investment Company Act, a Fund may not
               declare any dividend or other distribution upon any class of
               their capital stock, or purchase any such capital stock, unless
               the aggregate indebtedness of such Fund has, at the time of the
               declaration of any such dividend or distribution or at the time
               of any such purchase, an asset coverage of at least 300% after
               deducting the amount of such dividend, distribution, or purchase
               price, as the case may be. While any shares of preferred stock
               are outstanding, a Fund may not declare any cash dividend or
               other distribution on its Common Stock, unless at the time of
               such declaration, (i) all accumulated preferred stock dividends
               have been paid and (ii) the net asset value of such Fund&#146;s
               portfolio (determined after deducting the amount of such
               dividend or other distribution) is at least 200% of the
               liquidation value of the outstanding preferred stock (expected
               to be equal to original purchase price per share plus any
               accumulated and unpaid dividends thereon). In addition to the
               limitations imposed by the Investment Company Act described in
               this paragraph, certain lenders may impose additional
               restrictions on the payment of dividends or distributions on a
               Fund&#146;s Common Stock in the event of a default on such
               Fund&#146;s borrowings. Any limitation on a Fund&#146;s ability
               to make distributions on its Common Stock could under certain
               circumstances impair the ability of the Fund to maintain its
               qualification for taxation as a regulated investment company,
               which would have adverse tax consequences for holders of that
               Fund&#146;s Common Stock. See &#147;Comparison of the
               Funds&#151;Tax Rules Applicable to the Funds and Their
               Stockholders.&#148;</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
               information concerning the manner in which dividends and
               distributions to holders of each Fund&#146;s Common Stock may be
               reinvested automatically in shares of a Fund&#146;s Common
               Stock, see &#147;Automatic Dividend Reinvestment Plan&#148;
               below. Dividends and distributions will be subject to the tax
               treatment discussed below, whether they are reinvested in shares
               of a Fund or received in cash.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx48"></A>
             Automatic Dividend Reinvestment Plan</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
               to each Fund&#146;s Automatic Dividend Reinvestment Plan (each,
               a &#147;Plan&#148;), unless a holder of a Fund&#146;s Common
               Stock is ineligible or elects otherwise, all dividends and
               distributions are automatically reinvested by either The Bank of
               New York, as agent for Debt Strategies and Debt Strategies II
               stockholders in administering the Plan, or State Street Bank and
               Trust Company, as agent for stockholders of Debt Strategies III


             in administering the Plan (each, a &#147;Plan Agent&#148;), in
               additional shares of the applicable Fund&#146;s Common Stock.
               The Bank of New York will be the Plan Agent for the Surviving
               Fund after the Merger. Stockholders whose shares are held in the
               name of a broker or nominee should contact such broker or
               nominee to confirm that they are eligible to participate in a
               Fund&#146;s dividend reinvestment plan. Holders of a Fund&#146;s
               Common Stock who are eligible or elect not to participate in a
               Plan receive all distributions in cash paid by check mailed
               directly to the stockholder of record (or, if the shares are
               held in street or other nominee name, then to such nominee) by
               The Bank of New York or State Street Bank and Trust Company, as
               applicable, as dividend paying agent. Such stockholders may
               elect not to participate in a Plan and to receive all
               distributions of dividends and capital gains in cash by sending
               written instructions to The Bank of New York or State Street
               Bank and Trust Company, as applicable, as dividend paying agent,
               at the address set forth below. Participation in each Plan is
               completely voluntary and may be terminated or resumed at any
               time without penalty by written notice if received by the
               applicable Plan Agent not less than ten days prior to any
               dividend record date; otherwise, such termination or resumption
               will be effective with respect to any subsequently declared
               dividend or capital gains distribution.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whenever
               a Fund declares an ordinary income dividend or a capital gain
               dividend (collectively referred to as &#147;dividends&#148;)
               payable either in shares or in cash, non-participants in a Plan
               receive cash, and participants in the Plan receive the
               equivalent in shares of the Fund&#146;s Common Stock. The shares
               are acquired by the applicable Plan Agent for the
               participant&#146;s account, depending upon the circumstances
               described below, either (i) through receipt of additional
               unissued but authorized shares of a Fund&#146;s Common Stock
               from that Fund (&#147;newly-issued shares&#148;) or (ii) by
               purchase of outstanding shares of a Fund&#146;s Common Stock on
               the open market (&#147;open-market purchases&#148;), on the NYSE
               or elsewhere. If on the payment date for the dividend, the net
               asset value per share of a Fund&#146;s Common Stock is equal to
               or less than the market price per share of that Fund&#146;s
               Common Stock plus estimated brokerage commissions (such
               condition being referred to herein as &#147;market
               premium&#148;), the applicable Plan Agent invests the dividend
               amount in newly-issued shares on behalf of the participant. The
               number of newly-issued shares of a Fund&#146;s Common Stock to
               be credited to the participant&#146;s account is determined by
               dividing the dollar amount of the dividend by the net asset
               value per share on the date the shares are issued, provided that
               the maximum discount from the then-current market price per
               share on the date of issuance may not exceed 5%. If on the
               dividend payment date, the net asset value per share is greater
               than the market value (such condition being referred to herein
               as &#147;market discount&#148;), the applicable Plan Agent
               invests the dividend amount in shares acquired on behalf of the
               participant in open-market purchases.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the
               event of a market discount on the dividend payment date, the
               applicable Plan Agent has until the last business day before the
               next date on which the shares trade on an
               &#147;ex-dividend&#148; basis or in no event more than 30 days
               after the dividend payment date (the &#147;last purchase
               date&#148;) to invest the dividend amount in shares acquired in
               open-market purchases. Each Fund intends to pay monthly income
               dividends. Therefore, the period during which open-market
               purchases can be made exists only from the payment date on the
               dividend through the date before the next
               &#147;ex-dividend&#148; date, which typically is approximately
               ten days. If, before the applicable Plan Agent has completed its
               open-market purchases, the market price of a share of a
               Fund&#146;s Common Stock exceeds the net asset value per share,
               the average per share purchase price paid by the applicable Plan
               Agent may exceed the net asset value of that Fund&#146;s shares,
               resulting in the acquisition of fewer shares than if the
               dividend had been paid in newly-issued shares on the dividend
               payment date. Because of the foregoing difficulty with respect
               to open-market purchases, each Plan provides that if the
               applicable Plan Agent is unable to invest the full dividend
               amount in open-market purchases during the purchase period or if
               the market discount shifts to a market premium during the
               purchase period, the applicable Plan Agent ceases making
               open-market purchases and invests the uninvested portion of the
               dividend amount in newly-issued shares at the close of business
               on the last purchase date.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               applicable Plan Agent maintains all stockholders&#146; accounts
               in a Plan and furnishes written confirmation of all transactions
               in the account, including information needed by stockholders for
               tax records. Shares in the account of each Plan participant are
               held by the applicable Plan Agent in non-certificated form in
               the name of the participant, and each stockholder&#146;s proxy
               includes those shares purchased or received pursuant to a Plan.
               The applicable Plan Agent will forward all proxy solicitation
               materials to participants and vote proxies for shares held
               pursuant to a Plan in accordance with the instructions of the
               participants.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the case of
               stockholders such as banks, brokers or nominees which hold
               shares for others who are the beneficial owners, the applicable
               Plan Agent will administer a Plan on the basis of the number of
               shares certified from time to time by the record stockholders as
               representing the total amount registered in the record
               stockholder&#146;s name and held for the account of beneficial
               owners who are to participate in that Plan.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are
               no brokerage charges with respect to shares issued directly by
               any Fund as a result of dividends or capital gains distributions
               payable either in shares or in cash. However, each participant
               pays a pro rata share of brokerage commissions incurred with
               respect to the applicable Plan Agent&#146;s open-market
               purchases in connection with the reinvestment of
               dividends.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               automatic reinvestment of dividends and distributions does not
               relieve participants of any Federal, state or local income tax
               that may be payable (or required to be withheld) on such
               dividends. See &#147;Comparison of the Funds&#151;Tax Rules
               Applicable to the Funds and Their
               Stockholders.&#148;</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Stockholders participating in a Plan may receive benefits
               not available to stockholders not participating in that Plan. If
               the market price (plus commissions) of a Fund&#146;s shares of
               Common Stock is higher than the net asset value of such shares,
               participants in a Plan receive shares of the Fund&#146;s Common
               Stock at less than they otherwise could purchase them and have
               shares with a cash value greater than the value of any cash
               distribution they would have received on their shares. If the
               market price plus commissions is lower than the net asset value
               of such shares, participants receive distributions of shares
               with a net asset value greater than the value of any cash
               distribution they would have received on their shares. However,
               there may be insufficient shares available in the market to make
               distributions of shares at prices below the net asset value.
               Also, since the Funds normally do not redeem their shares, the
               price on resale may be more or less than the net asset value.
               See &#147;Comparison of the Funds&#151;Tax Rules Applicable to
               the Funds and Their Stockholders&#148; for a discussion of the
               tax consequences of each Plan.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               reserves the right to amend or terminate its Plan. There is no
               direct service charge to participants in a Plan; however, each
               Fund reserves the right to amend its Plan to include a service
               charge payable by the participants.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;After the
               Merger, a holder of shares of an Acquired Fund who has elected
               to receive dividends in cash will continue to receive dividends
               in cash; all other holders will have their dividends
               automatically reinvested in shares of the Surviving Fund.
               However, if a stockholder owns shares in an Acquired Fund and in
               Debt Strategies II, after the Merger, the stockholder&#146;s
               election with respect to the dividends of Debt Strategies II
               will control unless the stockholder specifically elects a
               different option at that time. Following the Merger, all
               correspondence should be directed to the Plan Agent for Debt
               Strategies II as follows: The Bank of New York, 101 Barclay
               Street, New York, New York 10206.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx49"></A>
             Mutual Fund Investment Option</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A holder
               of Common Stock of any Fund, who purchased his or her shares
               through Merrill Lynch in a Fund&#146;s initial public offering,
               has the right to reinvest the net proceeds from a sale of such
               shares in Class D shares of certain Merrill Lynch-sponsored
               open-end funds without the imposition of an initial sales
               charge, if certain conditions are satisfied. A holder of Common
               Stock of an Acquired Fund who qualifies for this option will
               have the same option with respect to the shares of Debt
               Strategies II Common Stock received in the Merger.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx50"></A>
             Tax Rules Applicable to the Funds and Their
               Stockholders</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The tax
               consequences of investing in shares of Common Stock of each Fund
               are identical. The Funds have elected and qualified for the
               special tax treatment afforded RICs under the Code. As a result,
               in any taxable year in which they distribute an amount equal to
               at least 90% of taxable net income and 90% of tax-exempt net
               income (see below), the Funds (but not their stockholders) are
               not subject to Federal income tax to the extent that they
               distribute their net investment income and net realized capital
               gains. In all taxable years through the
             taxable year of the Merger, each Fund has distributed
               substantially all of its income. Debt Strategies II intends to
               continue to distribute substantially all of its income following
               the Merger.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends
               paid by each Fund from its ordinary income or from an excess of
               net short-term capital gains over net long-term capital losses
               (together referred to hereafter as &#147;ordinary income
               dividends&#148;) are taxable to shareholders as ordinary income.
               Distributions made from an excess of net long-term capital gains
               over net short-term capital losses (including gains or losses
               from certain transactions in swaps, futures and options)
               (&#147;capital gain dividends&#148;) are taxable to shareholders
               as long-term capital gains, regardless of the length of time the
               shareholder has owned Fund shares. Any loss upon the sale or
               exchange of Fund shares held for six months or less will be
               treated as long-term capital loss to the extent of any capital
               gain dividends received by the shareholder. Distributions in
               excess of each Fund&#146;s earnings and profits will first
               reduce the adjusted tax basis of a holder&#146;s shares and,
               after such adjusted tax basis is reduced to zero, will
               constitute capital gains to such holder (assuming the shares are
               held as a capital asset). Certain categories of capital gains
               are taxable at different rates. Generally not later than 60 days
               after the close of its taxable year, each Fund will provide its
               shareholders with a written notice designating the amounts of
               any capital gain dividends (including the amount of capital gain
               dividends in the different categories of capital gain referred
               to above), as well as any dividends eligible for the dividends
               received deduction.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dividends
               are taxable to shareholders even though they are reinvested in
               additional shares of each Fund. Distributions attributable to
               any dividend income earned by each Fund will be eligible for the
               dividends received deduction allowed to corporations under the
               Code, if certain requirements are met. If a Fund pays a dividend
               in January which was declared in the previous October, November
               or December to shareholders of record on a specified date in one
               of such months, then such dividend will be treated for tax
               purposes as being paid by the Fund and received by its
               shareholders on December 31 of the year in which the dividend
               was declared.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               Internal Revenue Service (the &#147;Service&#148;) has taken the
               position in a revenue ruling that if a RIC has more than one
               class of shares, it may designate distributions made to each
               class in any year as consisting of no more than such
               class&#146;s proportionate share of particular types of income,
               including the different categories of capital gain referred to
               above. A class&#146;s proportionate share of a particular type
               of income is determined according to the percentage of total
               dividends paid by the RIC during such year that was paid to such
               class. Consequently, if both Common Stock and preferred stock
               are outstanding, each Fund intends to designate distributions
               made to the classes as consisting of particular types of income
               in accordance with the classes&#146; proportionate shares of
               such income. Thus, capital gain dividends, including the
               different categories of capital gain referred to above, will be
               allocated between the holders of Common Stock and preferred
               stock in proportion to the total dividends paid to each class
               during the taxable year, or otherwise as required by applicable
               law.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If at any
               time when shares of preferred stock are outstanding a Fund does
               not meet the asset coverage requirements of the Investment
               Company Act, the Fund will be required to suspend distributions
               to holders of Common Stock until the asset coverage is restored.
               See &#147;Dividends and Distributions.&#148; This may prevent
               the Fund from distributing at least 90% of its net income, and
               may therefore jeopardize such Fund&#146;s qualification for
               taxation as a RIC or may subject the Fund to the 4% excise tax
               described below. Upon any failure to meet the asset coverage
               requirement of the Investment Company Act, each Fund may, in its
               sole discretion, redeem shares of preferred stock in order to
               maintain or restore the requisite asset coverage and avoid the
               adverse consequences to the Fund and its shareholders of failing
               to qualify as a RIC. There can be no assurance, however, that
               any such action would achieve these objectives.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As noted
               above, each Fund must distribute annually at least 90% of its
               net investment income. A distribution will only be counted for
               this purpose if it qualifies for the dividends paid deduction
               under the Code. Some types of preferred stock that each Fund has
               the authority to issue may raise an issue as to whether
               distributions on such preferred stock are
               &#147;preferential&#148; under the Code and therefore not
               eligible for the dividends paid deduction. In the event any Fund
               determines to issue preferred stock, each Fund intends to issue
               preferred stock that counsel advises will not result in the
               payment of a preferential dividend. If a Fund ultimately relies
               solely on a legal opinion in the event it issues such preferred
               stock, there is no assurance that the Service would agree
             that dividends on the preferred stock are not preferential. If the
               Service successfully disallowed the dividends paid deduction for
               dividends on the preferred stock, a Fund could be disqualified
               as a RIC.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ordinary
               income dividends paid to shareholders who are nonresident aliens
               or foreign entities will be subject to a 30% United States
               withholding tax under existing provisions of the Code applicable
               to foreign individuals and entities unless a reduced rate of
               withholding or a withholding exemption is provided under
               applicable treaty law. Nonresident shareholders are urged to
               consult their own tax advisers concerning the applicability of
               the United States withholding tax.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest
               income from non-U.S. securities may be subject to withholding
               taxes imposed by the country in which the issuer is located. Tax
               conventions between certain countries and the United States may
               reduce or eliminate such taxes.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
               certain Code provisions, some shareholders may be subject to a
               31% withholding tax on ordinary income dividends, capital gain
               dividends and redemption payments (&#147;backup
               withholding&#148;). Generally, shareholders subject to backup
               withholding will be those for whom no certified taxpayer
               identification number is on file with each Fund or who, to each
               Fund&#146;s knowledge, have furnished an incorrect number. When
               establishing an account, an investor must certify under penalty
               of perjury that such number is correct and that such investor is
               not otherwise subject to backup withholding.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Code
               requires a RIC to pay a nondeductible 4% excise tax to the
               extent the RIC does not distribute, during each calendar year,
               98% of its ordinary income, determined on a calendar year basis,
               and 98% of its capital gains, determined, in general, on an
               October 31 year end, plus certain undistributed amounts from
               previous years. While each Fund intends to distribute its income
               and capital gains in the manner necessary to minimize imposition
               of the 4% excise tax, there can be no assurance that sufficient
               amounts of each Fund&#146;s taxable income and capital gains
               will be distributed to avoid entirely the imposition of the tax.
               In such event, a Fund will be liable for the tax only on the
               amount by which it does not meet the foregoing distribution
               requirements.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               will invest in securities rated in the lower rating categories
               of nationally recognized rating organizations, in unrated
               securities (together with lower rated securities, &#147;junk
               bonds&#148;) and in high yield Corporate Loans, as previously
               described. Some of these junk bonds and high yield Corporate
               Loans may be purchased at a discount and may therefore cause
               each Fund to accrue and distribute income before amounts due
               under the obligations are paid. In addition, a portion of the
               interest payments on such junk bonds and high yield Corporate
               Loans may be treated as dividends for Federal income tax
               purposes; in such case, if the issuer of the junk bonds or high
               yield Corporate Loans is a domestic corporation, dividend
               payments by each Fund will be eligible for the dividends
               received deduction to the extent of the deemed dividend portion
               of such interest payments.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx51"></A>
             Tax Treatment of Options and Futures Transactions</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               may engage in interest rate transactions, write (i.e., sell)
               covered call and covered put options on its portfolio
               securities, purchase call and put options on securities, and
               engage in transactions in financial futures and related options
               on such futures. In general, unless an election is available to
               each Fund or an exception applies, such options and futures
               contracts that are &#147;Section 1256 contracts&#148; will be
               &#147;marked to market&#148; for Federal income tax purposes at
               the end of each taxable year (i.e., each such options or futures
               contract will be treated as sold for its fair market value on
               the last day of the taxable year), and any gain or loss
               attributable to such contracts will be 60% long-term and 40%
               short-term capital gain or loss. Application of these rules to
               Section 1256 contracts held by each Fund may alter the timing
               and character of distributions to shareholders. The
               mark-to-market rules outlined above, however, will not apply to
               certain transactions entered into by each Fund solely to reduce
               the risk of changes in price or interest or currency exchange
               rates with respect to its investments.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Federal
               income tax rules governing the taxation of swaps are not
               entirely clear and may require each Fund to treat payments
               received under such arrangements as ordinary income and to
               amortize such payments under certain circumstances. The Funds do
               not anticipate that their activity in this regard will affect
               their qualification as RICs.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Code
               Section 1092, which applies to certain &#147;straddles,&#148;
               may affect the taxation of each Fund&#146;s sales of securities
               and options, futures and swap transactions. Under Section 1092,
               each Fund may be required to postpone recognition for tax
               purposes of losses incurred in certain sales of securities and
               certain closing transactions in options, futures and swap
               transactions.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx52"></A>
             Special Rules for Certain Foreign Currency
               Transactions</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
               Code Section 988, special rules are provided for certain
               transactions in a currency other than the taxpayer&#146;s
               functional currency (i.e, unless certain special rules apply,
               currencies other than the U.S. dollar). In general, foreign
               currency gains and losses in connection with certain of each
               Fund&#146;s debt instruments and foreign currency swaps will be
               treated as ordinary income or loss under Code Section 988 and
               will increase or decrease the amount of each Fund&#146;s
               investment company taxable income available to be distributed to
               shareholders as ordinary income. Additionally, if Code Section
               988 losses exceed other investment company taxable income during
               a taxable year for a Fund, such Fund would not be able to make
               any ordinary income dividend distributions, and any
               distributions made before the losses were realized but in the
               same taxable year would be recharacterized as a return of
               capital to shareholders, thereby reducing the basis of each
               shareholder&#146;s Fund shares, and resulting in a capital gain
               for any shareholder who received a distribution greater than the
               shareholder&#146;s tax basis in Fund shares (assuming the shares
               were held as a capital asset). These rules, however, will not
               apply to certain transactions entered into by each Fund solely
               to reduce the risk of currency fluctuations with respect to its
               investments.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx53"></A>
             ITEM 2.&nbsp;&nbsp;&nbsp;&nbsp;ELECTION OF
               DIRECTORS</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the
               Annual Meeting of each Fund, the Board of Directors for each
               Fund will be elected to serve until the next annual meeting of
               stockholders and until their successors are elected and
               qualified. If the stockholders of all of the Funds approve the
               Merger, then the current Board of Directors of each Fund will
               serve as the Board of the Surviving Fund, until its next annual
               meeting of stockholders. If the stockholders of any Fund vote
               against the Merger, then the Board of Directors elected at the
               annual meeting of each Fund will continue to serve until the
               next annual meeting of stockholders of each Fund. With respect
               to each Fund, it is intended that all properly executed proxies
               will be voted (unless such authority has been withheld in the
               proxy) in favor of the nine persons designated as Directors to
               be elected by the holders of Common Shares.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board
               of Directors of each Fund knows of no reason why any of these
               nominees will be unable to serve, but in the event of any such
               unavailability, the proxies received will be voted for such
               substitute nominee or nominees as the appropriate Board of each
               Fund may recommend.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
               information concerning the nominees is set forth below.
               Additional information concerning the nominees and other
               information relevant to the election of Directors is set forth
               in Exhibit I.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="622" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="258"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Name
                 and Address</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH WIDTH="11"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="23"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Age</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH WIDTH="13"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="315"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Principal Occupation During Past
               <BR>
               Five Years and Public Directorships(1)</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left" WIDTH="258"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Ronald
                 W. Forbes(1)(2)
               <BR>
               1400 Washington Avenue
               <BR>
               Albany, New York 12222</FONT></TD>
               <TD WIDTH="11"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="23"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">59</FONT></TD>
               <TD WIDTH="13"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="315" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Professor of Finance, School of Business, State
               <BR>
               University of New York at Albany, since 1989;
               <BR>
               International Consultant, Urban Institute, Washington,
               <BR>
               D.C. from 1995 to 1999.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left" WIDTH="258"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Terry
                 K. Glenn(1)*
               <BR>
               P. O. Box 9011
               <BR>
               Princeton, New Jersey 08543-9011</FONT></TD>
               <TD WIDTH="11"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="23"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">59</FONT></TD>
               <TD WIDTH="13"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="315" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Executive Vice President of FAM and MLIM (the terms
               <BR>
               FAM and MLIM, as used herein, include their corporate
               <BR>
               predecessors) since 1983; Executive Vice President and
               <BR>
               Director of Princeton Services, Inc. (&#147;Princeton
               <BR>
               Services&#148;) since 1993; President of FAM Distributors,
               <BR>
               Inc. (&#147;FAMD&#148;) since 1986 and Director thereof since
               <BR>
               1991; President of Princeton Administrators, L.P. since
               <BR>
               1988.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left" WIDTH="258"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Cynthia
                 A. Montgomery(1)(2)
               <BR>
               Harvard Business School
               <BR>
               Soldiers Field Road
               <BR>
               Boston, Massachusetts 02163</FONT></TD>
               <TD WIDTH="11"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="23"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">47</FONT></TD>
               <TD WIDTH="13"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="315" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Professor, Harvard Business School since 1989;
               <BR>
               Associate Professor, J.L. Kellogg Graduate School of
               <BR>
               Management, Northwestern University from 1985 to
               <BR>
               1989; Assistant Professor, Graduate School of Business
               <BR>
               Administration, The University of Michigan from 1979
               <BR>
               to 1985; Director, UnumProvident Corporation since
               <BR>
               1990 and Director, NewellRubbermaid since 1995.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left" WIDTH="258"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Charles
                 C. Reilly(1)(2)
               <BR>
               9 Hampton Harbor Road
               <BR>
               Hampton Bays, New York 11946</FONT></TD>
               <TD WIDTH="11"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right" WIDTH="23"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">69</FONT></TD>
               <TD WIDTH="13"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="315" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Self-employed financial consultant since 1990; President
               <BR>
               and Chief Investment Officer of Verus Capital, Inc. from 1979 to
                 1990; Senior Vice President of Arnhold and S.
               <BR>
               Bleichroeder, Inc. from 1973 to 1990; Adjunct
               <BR>
               Professor, Columbia University Graduate School of
               <BR>
               Business from 1990 to 1991; Adjunct Professor,
               <BR>
               Wharton School, The University of Pennsylvania from
               <BR>
               1989 to 1990; Partner, Small Cities Cable Television
               <BR>
               from 1986 to 1997.</FONT></TD>
              </TR>
             </TABLE>


             <BR>

             <TABLE ALIGN="center" WIDTH="0" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="214"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Name
                 and Address</B></FONT><FONT
               SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH WIDTH="34"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="71"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Age</B></FONT><FONT
               SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH WIDTH="22"><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center" WIDTH="282"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Principal Occupation During Past
               <BR>
               Five Years and Public Directorships(1)</B></FONT><FONT
               SIZE="1"> <HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
             </TABLE>


             <BR>

             <TABLE ALIGN="center" WIDTH="609" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Kevin
                 A. Ryan(1)(2)
               <BR>
               127 Commonwealth Avenue
               <BR>
               Chestnut Hill, Massachusetts 02467</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">67</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="307" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Founder
                 and currently Director Emeritus of The Boston
               <BR>
               University Center for the Advancement of Ethics and
               <BR>
               Character and Director thereof from 1989 to 1999;
               <BR>
               Professor from 1982 to 1999 and currently Professor
               <BR>
               Emeritus of Education at Boston University; formerly
               <BR>
               taught on the faculties of The University of Chicago,
               <BR>
               Stanford University and Ohio State University.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Roscoe
                 S. Suddarth(1)(2)
               <BR>
               1761 N Street, N.W.
               <BR>
               Washington, D.C. 20036</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">65</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="307" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">President, Middle East Institute since 1995; Foreign
               <BR>
               Service Officer, United States Foreign Service, from
               <BR>
               1961 to 1995; Career Minister, from 1989 to 1995; U.S.
               <BR>
               Ambassador to the Hashemite Kingdom of Jordan from
               <BR>
               1987 to 1990; Deputy Inspector General, U.S.
               <BR>
               Department of State, from 1991 to 1994.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Richard
                 R. West(1)(2)
               <BR>
               Box 604
               <BR>
               Genoa, Nevada 89411</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">62</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="307" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Professor of Finance since 1984, Dean from 1984 to
               <BR>
               1993, and currently Dean Emeritus of New York
               <BR>
               University, Leonard N. Stern School of Business
               <BR>
               Administration; Director of Bowne &amp; Co., Inc.,
               <BR>
               Vornado Realty Trust, Inc., Vornado Operating
               <BR>
               Company and Alexander&#146;s Inc.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Arthur
                 Zeikel(1)*
               <BR>
               300 Woodland Avenue
               <BR>
               Westfield, New Jersey 07090</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">67</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="307" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Chairman of FAM and MLIM from 1997 to 1999;
               <BR>
               President of FAM and MLIM from 1977 to 1997;
               <BR>
               Chairman of Princeton Services from 1997 to 1999,
               <BR>
               Director thereof from 1993 to 1999 and President from
               <BR>
               1993 to 1997; Executive Vice President of ML &amp; Co.
               <BR>
               from 1990 to 1999.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=5><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Edward
                 D. Zinbarg(1)(2)
               <BR>
               5 Hardwell Road
               <BR>
               Short Hills, New Jersey 07078-2117</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">65</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="307" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Self-employed financial consultant since 1994; Execu-
               <BR>
               tive Vice President of The Prudential Insurance Com-
               <BR>
               pany of America from 1988 to 1994; former Director of
               <BR>
               Prudential Reinsurance Company and former Trustee of
               <BR>
               the Prudential Foundation</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(1)</FONT></DIV>
               </TD>
               <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Each of
                 the nominees is a director, trustee or member of an advisory
                 board of one or more additional investment companies for which
                 FAM, MLIM or their affiliates act as investment adviser. See
                 &#147;Compensation of Directors&#148; in Exhibit I
                 hereto.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>


             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(2)</FONT></DIV>
               </TD>
               <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Member
                 of Audit Committee of the Boards.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">*</FONT></DIV>
               </TD>
               <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Interested person, as defined in the Investment Company
                 Act, of the Funds.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx54"></A>
             Committee and Board Meetings</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board
               of each Fund has a standing Audit Committee (the
               &#147;Committee&#148;), which consists of Board members who are
               not &#147;interested persons&#148; of the Fund within the
               meaning of the Investment Company Act. The principal purpose of
               the Committee is to review the scope of the annual audit
               conducted by the Fund&#146;s independent auditors and the
               evaluation by such auditors of the accounting procedures
               followed by the Fund. The Committee also reviews and nominates
               candidates to serve as non-interested Board members. The
               Committee generally will not consider nominees recommended by
               stockholders of the Fund. The non-interested Board members have
               retained independent legal counsel to assist them in connection
               with these duties.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
               each Fund&#146;s most recently completed fiscal year, each of
               the Board members then in office attended at least 75% of the
               aggregate of the total number of meetings of the Board held
               during the fiscal year and, if a member, of the total number of
               meetings of the Committee held during the period for which he or
               she served. See Exhibit I for further information about
               Committee and Board meetings.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx55"></A>
             Compliance with Section 16(a) of the Securities Exchange Act of
               1934</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
               16(a) of the Securities Exchange Act of 1934, as amended (the
               &#147;Exchange Act&#148;), requires the officers and Directors
               of each Fund and persons who own more than ten percent of a
               registered class of the Fund&#146;s equity securities, to file
               reports of ownership and changes in ownership on Forms 3, 4 and
               5 with the SEC and the NYSE. Officers, Directors and greater
               than ten percent stockholders are required by SEC regulations to
               furnish the Fund with copies of all Forms 3, 4 and 5 they
               file.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based
               solely on each Fund&#146;s review of the copies of such forms,
               and amendments thereto, furnished to it during or with respect
               to its most recent fiscal year, and written representations from
               certain reporting persons that they were not required to file
               Form 5 with respect to the most recent fiscal year, each Fund
               believes that all of its officers, Directors, greater than ten
               percent beneficial owners and other persons subject to Section
               16 of the Exchange Act because of the requirements of Section 30
               of the Investment Company Act (<I>i.e</I>., any advisory board
               member, investment adviser or affiliated person of the
               Fund&#146;s investment adviser) have complied with all filing
               requirements applicable to them with respect to transactions
               during the Fund&#146;s most recent fiscal year.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx56"></A>
             Interested Persons</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Fund
               considers Mr. Glenn and Mr. Zeikel to be &#147;interested
               persons&#148; of the Fund within the meaning of Section 2(a)(19)
               of the Investment Company Act because of the positions each
               holds or has held with FAM and its affiliates. Mr. Glenn is the
               President of each Fund.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx57"></A>
             Compensation of Directors</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM, the
               investment adviser of each Fund, pays all compensation to all
               officers of each Fund and all Directors of each Fund who are
               affiliated with ML &amp; Co. or its subsidiaries. Each Fund pays
               each Director not affiliated with FAM (each a
               &#147;non-affiliated Director&#148;) an annual fee plus a fee
               for each meeting attended, and each Fund also pays each member
               of its Committee, which consists of all of the non-affiliated
               Directors, an annual fee plus a fee for each meeting attended,
               together with such Director&#146;s out-of-pocket expenses
               relating to attendance at such meetings. Information with
               respect to the aggregate fees and expenses paid by each Fund to
               its non-affiliated Directors during each Fund&#146;s most
               recently completed fiscal year is set forth in Exhibit I
               hereto.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx58"></A>
             Officers of the Funds</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Information regarding the officers of each Fund is set
               forth in Exhibit I. Officers of the Funds are elected and
               appointed by the Board and hold office until they resign, are
               removed or are otherwise disqualified to serve.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx59"></A>
             ITEM 3.&nbsp;&nbsp;&nbsp;&nbsp;SELECTION OF INDEPENDENT
               AUDITORS</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board
               of each Fund, including a majority of the Directors who are not
               interested persons of the Fund, has selected Deloitte &amp;
               Touche <SMALL>LLP </SMALL>
             (&#147;D&amp;T&#148;) as the independent auditors, to audit the
               financial statements of each Fund for each Fund&#146;s current
               fiscal year. None of the Funds know of any direct or indirect
               financial interest of such auditors in any Fund. Such
               appointment is subject to ratification or rejection by the
               stockholders of each respective Fund. Unless a contrary
               specification is made, the accompanying proxy will be voted in
               favor of ratifying the selection of such Fund&#146;s
               auditors.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D&amp;T
               also acts as independent auditors for ML &amp; Co. and most of
               its subsidiaries, including MLIM and FAM, and for most other
               investment companies for which MLIM and FAM act as investment
               adviser. The Board of each Fund considered the fact that D&amp;T
               have been retained as the independent auditors for ML &amp; Co.
               and the other entities described above in its evaluation of the
               independence of D&amp;T with respect to each applicable
               Fund.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Representatives of D&amp;T are expected to be present at
               the Meetings and will have the opportunity to make a statement
               if they so desire and to respond to questions from
               stockholders.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx60"></A>
             INFORMATION CONCERNING THE ANNUAL MEETINGS</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx61"></A>
             Date, Time and Place of Meetings</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               Meetings will be held on August 23, 2000 at the offices of MLIM,
               800 Scudders Mill Road, Plainsboro, New Jersey at the times
               listed on Exhibit I to this Proxy Statement and
               Prospectus.</FONT></DIV>

             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx62"></A>
             Solicitation, Revocation and Use of Proxies</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
               stockholder executing and returning a proxy has the power to
               revoke it at any time prior to its exercise by executing a
               superseding proxy, by giving written notice of the revocation to
               the Secretary of the appropriate Fund or by voting in person at
               the Meeting. Although mere attendance at a Meeting will not
               revoke a proxy, a stockholder present at a Meeting may withdraw
               his or her proxy and vote in person.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
               shares represented by properly executed proxies, unless such
               proxies previously have been revoked, will be voted at the
               Meetings in accordance with the directions on the proxies; if no
               direction is indicated, the shares will be voted (i)
               &#147;FOR&#148; the proposal to approve of the Agreement and
               Plan of Merger, (ii) &#147;FOR&#148; the election of Directors
               and (iii) &#147;FOR&#148; the ratification of the selection of
               Deloitte &amp; Touche <SMALL>LLP </SMALL>
             as independent accountants.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is not
               anticipated that any other matters will be brought before the
               Meetings. If, however, any other business properly is brought
               before the Meetings, proxies will be voted in accordance with
               the judgment of the persons designated on such
               proxies.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx63"></A>
             Record Date and Outstanding Shares</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
               holders of record of shares of Common Stock of a Fund at the
               close of business on the Record Date are entitled to vote at a
               Meeting or any adjournment thereof. At the close of business on
               the Record Date, the Funds had the number of shares outstanding
               listed in Exhibit I to this Proxy Statement and
               Prospectus.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx64"></A>
             Security Ownership of Certain Beneficial Owners and
               Management</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the
               knowledge of the Funds, as of the date hereof, no person or
               entity owns beneficially 5% or more of the shares of the Common
               Stock of any Fund.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the
               Record Date, none of the nominees held shares of the Funds
               except as set forth in the table below:</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="540" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Nominee</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Fund
                 </B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>No.
                 of Shares Held*</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Ronald
                 W. Forbes</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="128" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">185.8</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="3" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="128" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies II</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">6.1</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Kevin
                 A. Ryan</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="128" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies II</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,900</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Richard
                 R. West</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="128" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies Fund</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="3" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="128" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies Fund II</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">*</FONT></DIV>
               </TD>
               <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">These
                 holdings represent less than 1% of the Common Stock
                 outstanding of the relevant Fund.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the
               Record Date, the Directors and officers of Debt Strategies as a
               group (12 persons) owned an aggregate of less than 1% of the
               outstanding shares of Common Stock of Debt
               Strategies.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the
               Record Date, the Directors and officers of Debt Strategies II as
               a group (12 persons) owned an aggregate of less than 1% of the
               outstanding shares of Debt Strategies II Common
               Stock.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the
               Record Date, the Directors and officers of Debt Strategies III
               as a group (12 persons) owned an aggregate of less than 1% of
               the outstanding shares of Common Stock of Debt Strategies
               III.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On the Record
               Date, Mr. Glenn, a Director and an officer of each Fund, Mr.
               Zeikel, a Director of each Fund, and the other Directors and
               officers of each Fund owned an aggregate of less than 1% of the
               outstanding shares of Common Stock of ML &amp; Co.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx65"></A>
             Voting Rights and Required Vote</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
               purposes of this Joint Proxy Statement and Prospectus, each
               share of Common Stock of each of the Funds is entitled to one
               vote. Approval of the Agreement and Plan of Merger requires the
               approval of the stockholders of each Fund. With respect to each
               Fund, approval of the Agreement and Plan of Merger requires the
               affirmative vote of stockholders representing a majority of the
               outstanding shares of a Fund&#146;s Common Stock.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
               purposes of any vote at a Meeting which requires the approval of
               the outstanding shares of a Fund&#146;s Common Stock, a quorum
               consists of one-third of the shares entitled to vote at that
               Meeting. If, by the time scheduled for each Meeting, a quorum of
               the applicable Fund&#146;s stockholders is not present, or if a
               quorum is present but sufficient votes in favor of the Agreement
               and Plan of Merger are not received from the stockholders of the
               applicable Fund, the persons named as proxies may propose one or
               more adjournments of a Meeting to permit further solicitation of
               proxies from stockholders. Any such adjournment will require the
               affirmative vote of a majority of the shares of the applicable
               Fund present in person or by proxy and entitled to vote at the
               session of a Meeting to be adjourned. The persons named as
               proxies will vote in favor of any such adjournment if they
               determine that adjournment and additional solicitation are
               reasonable and in the interests of the applicable Fund&#146;s
               stockholders.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
               respect to each Fund, assuming a quorum is present, election of
               the Directors of the Fund will require the affirmative vote of a
               plurality of the votes cast.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With
               respect to each Fund, assuming a quorum is present, approval of
               the ratification of the selection of the independent auditors of
               each Fund, will require the affirmative vote of a majority of
               the votes cast.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx66"></A>
             Appraisal Rights</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
               Maryland law, stockholders of a company whose shares are traded
               publicly on a national securities exchange, such as each Fund,
               are not entitled to demand the fair value of their shares upon a
               merger; therefore, the common stockholders of each Fund will be
               bound by the terms of the Merger, if approved at the Meetings.
               However, any common stockholder of a Fund may sell his or her
               shares of Common Stock at any time on the NYSE.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx67"></A>
             ADDITIONAL INFORMATION</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               expenses of preparation, printing and mailing of the enclosed
               form of proxy, the accompanying Notice and this Joint Proxy
               Statement and Prospectus will be borne by Debt Strategies II,
               the Surviving Fund after the Merger, so as to be borne equally
               and exclusively on a per share basis by the holders of Common
               Stock of each Fund. If the Merger is not approved, these
               expenses will be allocated pro rata among the Funds according to
               the net asset value of the Common Stock of each Fund on the
               Meeting date.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds
               likewise will reimburse banks, brokers and others for their
               reasonable expenses in forwarding proxy solicitation materials
               to the beneficial owners of shares of each Fund and certain
               persons that the Funds may employ for their reasonable expenses
               in assisting in the solicitation of proxies from such beneficial
               owners of shares of capital stock of the Funds.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order
               to obtain the necessary quorums at each Meeting, supplementary
               solicitation may be made by mail, telephone, telegraph or
               personal interview by officers of the Funds. Each Fund has
               retained Shareholder Communications Corporation, 17 State
               Street, New York, New York 10004 to aid in the solicitation of
               proxies, at a cost to be borne by each Fund of approximately
               $7,500, plus out-of-pocket expenses in the range of $24,000 to
               $40,000, in the aggregate.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker-dealer
               firms, including Merrill Lynch, holding Fund shares in
               &#147;street name&#148; for the benefit of their customers and
               clients will request the instructions of such customers and
               clients on how to vote their shares on each proposal before the
               Meetings. The Funds understand that, under the rules of the
               NYSE, such broker-dealer firms may, without instructions from
               their customers and clients, grant authority to the proxies
               designated to vote on the election of the Directors of each Fund
               (Item 2) and the ratification of the selection of independent
               auditors for each Fund (Item 3) if no instructions have been
               received prior to the date specified in the broker-dealer
               firm&#146;s request for voting instructions. With respect to
               shares of Common Stock of each Fund, broker-dealer firms,
               including Merrill Lynch, will not be permitted to grant voting
               authority without instructions with respect to the approval of
               the Agreement and Plan of Merger (Item 1). The Funds will
               include shares held of record by broker-dealers as to which such
               authority has been granted in its tabulation of the total number
               of shares present for purposes of determining whether the
               necessary quorum of stockholders of each Fund exists. Proxies
               that are returned to a Fund but that are marked
               &#147;abstain&#148; or on which a broker-dealer has declined to
               vote on any proposal (&#147;broker non-votes&#148;) will be
               counted as present for the purposes of determining a quorum.
               However, abstentions and broker non-votes will not be counted as
               votes cast. Abstentions and broker non-votes will not have an
               effect on the vote on Items 2 and 3; however, abstentions and
               broker non-votes will have the same effect as a vote against
               Item 1.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
               Joint Proxy Statement and Prospectus does not contain all of the
               information set forth in the registration statement and the
               exhibits relating thereto which Debt Strategies II has filed
               with the SEC under the Securities Act and the Investment Company
               Act, to which reference is hereby made.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Funds
               are subject to the informational requirements of the Exchange
               Act and the Investment Company Act and in accordance therewith
               are required to file reports, proxy statements and other
               information with the SEC. Any such reports, proxy statements and
               other information can be inspected and copied at the public
               reference facilities of the SEC at Room 1024, Judiciary Plaza,
               450 Fifth Street, N.W., Washington, D.C. 20549, and at the
               following regional offices of the SEC: Regional Office, at Seven
               World Trade Center, Suite 1300, New York, New York 10048;
               Pacific Regional Office, at 5670 Wilshire Boulevard, 11th Floor,
               Los Angeles, California 90036; and Midwest Regional Office, at
               Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
               Chicago, Illinois 60661-2511. Copies of such materials can be
               obtained from the public reference section of the SEC at 450
               Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
               The SEC maintains a Web site at http://www.sec.gov containing
               reports, proxy and information statements and other information
               regarding registrants, including the Funds, that file
               electronically with the SEC. Reports, proxy statements and other
               information concerning each Fund can also be inspected at the
               offices of the New York Stock Exchange, 20 Broad Street, New
               York, New York 10005.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx68"></A>
             CUSTODIAN</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bank
               of New York acts as the custodian for cash and securities of
               Debt Strategies and Debt Strategies II. The principal business
               address of The Bank of New York in such capacity is 90
               Washington Street, New York, New York 10286. State Street Bank
               and Trust Company acts as the custodian for cash and securities
               of Debt Strategies III. The principal business address of State
               Street Bank and Trust Company in such capacity is One Heritage
               Drive, P2N, North Quincy, Massachusetts 02171.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx69"></A>
             TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND
               REGISTRAR</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Bank
               of New York serves as the transfer agent, dividend disbursing
               agent and registrar with respect to the Common Stock of Debt
               Strategies and Debt Strategies II, pursuant to a registrar,
               transfer agency and service agreement with each of the Funds.
               The principal business address of The Bank of New York in such
               capacity is 101 Barclay Street, New York, New York
               10286.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State
               Street Bank and Trust Company serves as the transfer agent,
               dividend disbursing agent and registrar with respect to the
               Common Stock of Debt Strategies III, pursuant to a separate
               registrar, transfer agency and service agreement with Debt
               Strategies III. The principal business address of State Street
               Bank and Trust Company in such capacity is 225 Franklin Street,
               Boston, Massachusetts 02110.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx70"></A>
             LEGAL PROCEEDINGS</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There are
               no material legal proceedings to which any Fund is a
               party.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx71"></A>
             LEGAL OPINIONS</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
               legal matters in connection with the Merger will be passed upon
               for the Funds by Brown &amp; Wood <SMALL>LLP</SMALL>
             , New York, New York.</FONT></DIV>

             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx72"></A>
             EXPERTS</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D&amp;T,
               independent auditors, have audited the financial statements and
               financial highlights of each Fund as of February 29, 2000 as set
               forth in their reports which appear in this Joint Proxy
               Statement and Prospectus. The financial statements and financial
               highlights of each Fund are included in reliance upon their
               report, given on their authority as experts in accounting and
               auditing.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D&amp;T
               will serve as the independent auditors for the Surviving Fund
               after the Merger. The principal business address of D&amp;T is
               Princeton Forrestal Village, 116-300 Village Boulevard,
               Princeton, New Jersey 08540-6400.</FONT></DIV>

             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
             <A NAME="tx73"></A>
             STOCKHOLDER PROPOSALS</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The 2001
               Annual Meeting of each of Debt Strategies, Debt Strategies II
               and Debt Strategies III is expected to be held in May 2001. If a
               stockholder of a Fund intends to present a proposal at the 2001
               Annual Meeting of Stockholders of that Fund, and desires to have
               the proposal included in that Fund&#146;s proxy statement and
               form of proxy for that meeting, the stockholder must deliver the
               proposal to the offices of Debt Strategies, Debt Strategies II
               or Debt Strategies III, respectively, by December 15,
               2000.</FONT></DIV>

             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="52%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">By
                 Order of the Boards of Directors</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="52%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">BRADLEY
                 J. LUCIDO</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="52%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"><I>Secretary of
               <BR>
               Debt Strategies Fund, Inc.,
               <BR>
               Debt Strategies Fund II, Inc. and
               <BR>
               Debt Strategies Fund III, Inc.</I></FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">Plainsboro, New Jersey</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Dated:
               July 13, 2000</FONT></DIV>

             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV><FONT
             SIZE="7">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"> [This
               page is intentionally left blank.]</FONT></DIV>
             <P><FONT
             SIZE="2"></FONT></P>
             <P ALIGN="center"><B>
             <A NAME="tx74"></A>
             INDEX TO FINANCIAL STATEMENTS </B></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P><B>Page</B> </P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>
               <A HREF="#1">Audited Financial Statements for Debt Strategies
                 Fund, Inc.</A>
               </P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>&nbsp;&nbsp;
               <A HREF="#1">for the Fiscal Year Ended February 29, 2000</A>
               </P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="left"> &nbsp;&nbsp;&nbsp;F-2</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>
               <A HREF="#2">Audited Financial Statements for Debt Strategies
                 Fund II, Inc.</A>
               </P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>&nbsp;
               <A HREF="#2">&nbsp;for the Fiscal Year Ended February 29,
                 2000</A>
               </P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>F-22</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>
               <A HREF="#3">Audited Financial Statements for Debt Strategies
                 Fund III, Inc.</A>
               </P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>&nbsp;&nbsp;
               <A HREF="#3">for the Fiscal Year Ended February 29, 2000</A>
               </P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>F-42</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>
               <A HREF="#4">Pro Forma Unaudited Financial Statements for the
                 Surviving Fund,</A>
               </P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>&nbsp;&nbsp;
               <A HREF="#4">as of February 29, 2000</A>
               </P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>F-61</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-1</P>
             <P ALIGN="left"></P>
             <P ALIGN="center">
             <A NAME="1"></A>
             Audited Financial Statements for
             <BR>
             Debt Strategies Fund, Inc.
             <BR>
             for the Year Ended February 29, 2000</P>
             <P ALIGN="center">F-2</P>
             <P></P>
             <P><B>INDEPENDENT AUDITORS' REPORT </B></P>
             <P>The Board of Directors and Shareholders,
             <BR>
             Debt Strategies Fund, Inc.:</P>
             <P>We have audited the accompanying statement of assets,
               liabilities and capital, including the schedule of investments,
               of Debt Strategies Fund, Inc. as of February 29, 2000, the
               related statements of operations and cash flows for the year
               then ended and the statement of changes in net assets and the
               financial highlights for each of the years in the two-year
               period then ended and for the period May 30, 1997 (commencement
               of operations) to February 28, 1998. These financial statements
               and the financial highlights are the responsibility of the
               Fund's management. Our responsibility is to express an opinion
               on these financial statements and the financial highlights based
               on our audits.</P>
             <P>We conducted our audits in accordance with generally accepted
               auditing standards. Those standards require that we plan and
               perform the audit to obtain reasonable assurance about whether
               the financial statements and the financial highlights are free
               of material misstatement. An audit includes examining, on a test
               basis, evidence supporting the amounts and disclosures in the
               financial statements. Our procedures included confirmation of
               securities owned at February 29, 2000 by correspondence with the
               custodian and financial intermediaries; where replies were not
               received from financial intermediaries, we performed other
               auditing procedures. An audit also includes assessing the
               accounting principles used and significant estimates made by
               management, as well as evaluating the overall financial
               statement presentation. We believe that our audits provide a
               reasonable basis forour opinion.</P>
             <P>In our opinion, the financial statements and financial
               highlights present fairly, in all material respects, the
               financial position of Debt Strategies Fund, Inc. as of February
               29, 2000, the results of its operations, the changes in its net
               assets, its cash flows, and the financial highlights for the
               respective stated periods in conformity with generally accepted
               accounting principles.</P>
             <P>Deloitte &amp; Touche LLP
             <BR>
             Princeton, New Jersey
             <BR>
             April 17, 2000</P>
             <P ALIGN="center">F-3</P>
             <P ALIGN="left"></P>
             <P ALIGN="right"></P>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="27%">&nbsp;</TD>
               <TD WIDTH="43%">&nbsp;</TD>
               <TD WIDTH="30%"> <DIV ALIGN="right">Debt Strategies Fund, Inc.,
                 February 29, 2000</DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="27%">&nbsp;</TD>
               <TD WIDTH="43%">&nbsp;</TD>
               <TD WIDTH="30%"> <DIV ALIGN="right">(in US dollars)</DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="27%">SCHEDULE OF INVESTMENTS </TD>
               <TD WIDTH="43%">&nbsp;</TD>
               <TD WIDTH="30%">&nbsp;</TD>
              </TR>
             </TABLE>
             <P ALIGN="right">&nbsp;</P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"><B>INDUSTRIES</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"><B>S&amp;P
               <BR>
               Ratings</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"><B>Moody's
               <BR>
               Ratings</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"><B>Face
               <BR>
               Amount</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"><B>Corporate Debt
                 Obligations</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"><B>Value</B></TD>
              </TR>
              <TR>
               <TD VALIGN="top" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%" NOWRAP> <P><B>Advertising -
                 1.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">US$1,000,000</P>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="43%"> <P>Adams Outdoor Advertising Inc.,
                 10.75% due 3/15/2006</P>
               </TD>
               <TD VALIGN="top" WIDTH="1%"> <P>$</P>
               </TD>
               <TD VALIGN="top" WIDTH="16%"> <P ALIGN="right">1,037,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="43%"> <P>Outdoor Systems Inc., 8.875%
                 due 6/15/2007</P>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="16%"> <P ALIGN="right">3,060,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="43%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="16%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="43%">&#160; </TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="16%"> <P ALIGN="right">4,097,500</P>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="8"> <HR NOSHADE ALIGN="left" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Agricultural</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Sun World International,
                 Inc., 11.25% due 4/15/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">3,037,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%" NOWRAP> <P><B>Products -
                 1.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Amusement &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>AMC Entertainment Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Recreational</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">2,450,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>9.50% due 3/15/2009 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,874,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%" NOWRAP> <P><B>Services -
                 4.5%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">400,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>9.50% due 2/01/2011</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">302,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">475,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Carmike Cinemas Inc., 9.375%
                 due 2/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">356,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BBB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Baa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Metro Goldwyn Mayer Co.
                 (MGM), Term A, due 3/15/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV
                 ALIGN="right">4,908,335</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">3,350,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Riddell Sports, Inc., 10.50%
                 due 7/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">2,814,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">10,254,835</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%" NOWRAP> <P><B>Apparel -
                 2.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Arena Brands, Inc.**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,274,060</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Term A, due 6/01/2002</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,180,098</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">3,037,440</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Term B, due 6/01/2002</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">2,817,226</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,175,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>GFSI Inc., 9.625% due
                 3/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">705,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">4,702,324</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Automotive</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>D</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">580,259</P>
               </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P> &nbsp;&nbsp;&nbsp;Breed
                 Technologies Inc., Revolving Credit, due 4/27/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">340,612</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%" NOWRAP> <P><B>Equipment
                 -&nbsp;4.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CC</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ca</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">3,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Cambridge Industries Inc.,
                 10.25% due 7/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">630,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Citation Corporation, Term
                 B, due 12/01/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">990,313</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Hayes Lemmerz International
                 Inc., 8.25% due 12/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">436,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,850,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Key Plastics, Inc., 10.25%
                 due 3/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">592,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Newcor Inc., 9.875% due
                 3/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">590,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Safelite Glass Corp.**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">2,051,122</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Term B, due 12/23/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,119,912</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">2,051,122</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Term C, due 12/23/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,119,912</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">950,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Special Devices Inc.,
                 11.375% due 12/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">646,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Tenneco Inc., 11.625% due
                 10/15/2009 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">762,187</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Venture Holdings Trust:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,800,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>9.50% due 7/01/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,638,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">400,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>12% due 6/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">340,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">9,205,186</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%" NOWRAP> <P><B>Broadcast - Radio
                 &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,865,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Ackerley Group Inc., 9% due
                 1/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,760,094</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%" NOWRAP> <P><B>Television -
                 8.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Acme Television/Finance,
                 10.875% due 9/30/2004 (d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">881,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Albritton Communications,
                 9.75% due 11/30/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">485,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Capstar Broadcasting, 9.25%
                 due 7/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">4,080,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Corus Entertainment, Term B,
                 due 8/31/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">5,015,625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">1,800,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Gocom Communications, Term
                 B, due 12/31/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,795,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">3,175,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="43%"> <P>Radio Unica Corp., 14.384%
                 due 8/01/2006 (d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">2,032,000</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-4</P>
             <P ALIGN="left"></P>
             <P ALIGN="left">&nbsp;</P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,450,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Sirius Satellite, 14.50% due
                 5/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,399,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Spanish Broadcasting System,
                 9.625% due 11/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,965,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">19,413,719</P>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="8"> <HR NOSHADE SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Building &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">850,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Webb (Del E.) Corp., 10.25%
                 due 2/15/2010</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">741,625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Construction -0.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="100%" COLSPAN="8" HEIGHT="18"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Building</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,920,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Dal-Tile International Inc.,
                 Term B, due 12/31/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">4,843,125</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Materials - 2.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P
                 ALIGN="right">(Euro)&nbsp;511,292</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Schulte GmbH &amp; Co. KG,
                 Term B, due 12/02/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">489,810</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">5,332,935</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Cable Television</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>CSC Holdings Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%" HEIGHT="24"> <P><B>Services -
                 10.7%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%" HEIGHT="24"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%" HEIGHT="24"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%" HEIGHT="24"> <P
                 ALIGN="right">US$500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%" HEIGHT="24">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%" HEIGHT="24"> <P>7.25% due
                 7/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%" HEIGHT="24">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%" HEIGHT="24"> <P
                 ALIGN="right">466,775</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">650,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>7.625% due 7/15/2018</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">598,556</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Charter Communications
                 Holdings LLC:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,400,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>8.625% due 4/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,274,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>10% due 4/01/2009 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">4,968,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Classic Cable Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">475,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.375% due 8/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">445,312</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>10.50% due 3/01/2010 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,251,562</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,736,840</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Term C, due 1/31/2008**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,739,013</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Coaxial
                 Communications/Phoenix, 10% due 8/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">956,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Coaxial LLC, 11.864% due
                 8/15/2008 (d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">625,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Echostar DBS Corporation:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">400,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.25% due 2/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">390,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,925,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.375% due 2/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,881,687</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Globo Comunicacoes e
                 Participacoes, Ltd., 10.625% due 12/05/2008 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">863,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Insight Midwest/Insight
                 Capital, 9.75% due 10/01/2009 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,010,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Park 'N View Inc., 13% due
                 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">350,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Pegasus Communications:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.75% due 12/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">241,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Term, due 4/30/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,504,376</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>RCN Corporation, 10.125% due
                 1/15/2010</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">465,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>D</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>+Supercanal Holdings SA,
                 11.50% due 5/15/2005 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">590,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,600,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Telewest Communications PLC,
                 9.875% due 2/01/2010 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,602,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>United Pan-European
                 Communications NV, 11.25% due 2/01/2010 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">3,022,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">24,245,781</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Chemicals - 7.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BBB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Baa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Equistar Chemicals LP, 8.75%
                 due 2/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,949,520</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">6,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%" NOWRAP> <P>Huntsman Corp., 9.38%
                 due 7/01/2007 (b)(g)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">5,460,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,962,500</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Lyondell Petrochemical Co.,
                 Term E, due 5/17/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">5,094,954</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,875,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Pioneer American Holding
                 Corporation, Term, due 12/05/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">4,350,938</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">16,855,412</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Consumer</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Burhmann NV, Term B, due
                 10/26/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">755,906</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Products - 0.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">675,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Home Products International
                 Inc., 9.625% due 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">607,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">1,363,406</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Drilling - 3.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Cliffs Drilling, 10.25% due
                 5/15/2003</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">2,985,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BBB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Falcon Drilling Co. Inc.,
                 9.75% due 1/15/2001</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P ALIGN="right">3,000,000</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-5</P>
             <P><FONT
             SIZE="2"></FONT></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="896">
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD COLSPAN="5" VALIGN="BOTTOM"> <P><B></B></P>
               </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P><B></B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3">&#160; SCHEDULE OF INVESTMENTS
                 <I>(continued)</I></TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="4" ALIGN="right">Debt Strategies
                 Fund, Inc., February 29, 2000</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" HEIGHT="20">&nbsp;</TD>
               <TD VALIGN="BOTTOM" HEIGHT="20">&nbsp;</TD>
               <TD VALIGN="BOTTOM" HEIGHT="20">&nbsp;</TD>
               <TD VALIGN="BOTTOM" HEIGHT="20">&nbsp;</TD>
               <TD VALIGN="BOTTOM" HEIGHT="20" COLSPAN="4" ALIGN="right"><I>(in
                 US dollars)</I></TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8">&nbsp; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>INDUSTRIES</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>S&amp;P
               <BR>
               Ratings</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Moody's
               <BR>
               Ratings</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Face
               <BR>
               Amount</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Corporate Debt Obligations</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>Value</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Drilling</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">US$1,450,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Parker Drilling Co., 9.75% due
                 11/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>$</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,381,125</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B><I>(concluded)</I></B></P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>RBF Finance Company:</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">575,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>11% due 3/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">600,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">250,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>11.375% due 3/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">265,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">8,232,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Drug Stores - 1.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,450,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Duane Reade Co., Term B, due
                 2/15/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,450,767</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Electronics/Electrical</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,881,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Advanced Glassfiber Yarn, 9.875% due
                 1/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,730,520</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Components - 2.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Amkor Technologies Inc., 9.25% due
                 5/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,940,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">939,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>BGF Industries Inc., 10.25% due
                 1/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">859,185</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>High Voltage Engineering, 10.50% due
                 8/15/2004</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">817,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>&#160; </P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="top"> <DIV ALIGN="right"> 5,347,205</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Energy - 4.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Belco Oil &amp; Gas Corp., 8.875% due
                 9/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,860,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>CCC-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Caa3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Belden &amp; Blake Corp., 9.875% due
                 6/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,500,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>CCC</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">625,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Continental Resources, 10.25% due
                 8/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">593,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BBB+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Cross Timbers Oil Company, 8.75% due
                 11/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,835,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Forest Oil Corporation, 10.50% due
                 1/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,020,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Gulf Canada Resources Ltd., 9.25% due
                 1/15/2004</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,008,360</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Nuevo Energy Company, 9.50% due
                 6/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">975,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">10,792,110</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Environmental - 0.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,800,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>IT Group Inc., 11.25% due 4/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,712,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Financial</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,522,523</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Blackstone, Term, due 11/30/2000**</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,503,604</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Services - 6.5%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Investcorp SA, Term, due 10/21/2008**</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">496,915</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Lodgian Financing Corporation, 12.25%
                 due 7/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,820,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Pennant CBO Limited, 13.43% due
                 3/14/2011 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">990,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>SKM-Libertyview CBO Limited (b)(f):</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Baa2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>1A-C1, 8.71% due 4/10/2011</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,314,585</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>1A-D, 11.91% due 4/10/2011</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">877,031</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Sovereign Bank, Term, due
                 11/17/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,008,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,477,477</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Wasserstein, Term, due 11/30/2000**</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,458,896</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,425,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Willis Corroon Corporation, 9% due
                 2/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,140,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="top">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">14,609,781</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Food &amp; Kindred</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Envirodyne Industries, 10.25% due
                 12/01/2001</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Products - 5.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>GoldenState Foods, Term, due
                 5/01/2008**</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,468,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>SC International Services, Inc., 9.25%
                 due 9/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,840,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Specialty Foods, Inc.**:</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,832,299</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Revolving Credit, due 1/31/2001</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,823,137</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,127,011</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Term A, due 1/31/2001</P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,134,829</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="top">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">11,266,716</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-6</P>
             <P ALIGN="left"></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="896">
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Forest Products - 2.9%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Ainsworth Lumber Company, 12.50% due
                 7/15/2007 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,232,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">350,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Millar Western Forest, 9.875% due
                 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">345,625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Tembec Finance Corporation, 9.875% due
                 9/30/2005</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,515,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>CC</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ca</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Uniforet Inc., 11.125% due 10/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,350,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">6,443,125</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Furniture &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,800,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Formica Corporation, 10.875% due
                 3/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,593,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Fixtures - 0.7%</B></P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Gaming - 4.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">550,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Argosy Gaming Company, 10.75% due
                 6/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">565,125</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">750,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Coast Hotels &amp; Casino, 9.50% due
                 4/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">703,125</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">700,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Hollywood Park Inc., 9.25% due
                 2/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">677,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">625,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Horseshoe Gaming Holdings, 8.625% due
                 5/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">576,562</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,340,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Isle of Capri Casinos, 8.75% due
                 4/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,187,575</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Majestic Star LLC, 10.875% due
                 7/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,360,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,150,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Peninsula Gaming LLC, 12.25% due
                 7/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,236,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">9,305,637</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Health Care</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">968,641</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Caremark Rx, Inc., Term B, due
                 6/08/2001**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">908,100</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Providers - 0.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7">&#160; &#160; &#160; &#160;
                 &#160; &#160; <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1">
                 </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Hotels - 0.5%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Extended Stay America, 9.15% due
                 3/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">446,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">800,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>HMH Properties, Inc., 8.45% due
                 12/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">718,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">1,164,250</P>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="7"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Industrial</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>American Plumbing &amp; Mechanic,
                 11.625% due 10/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">455,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Services - 0.5%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">850,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Building One Services, 10.50% due
                 5/01/2009 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">782,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <DIV ALIGN="right">1,237,000</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Leasing &amp; Rental</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>National Equipment Services, 10% due
                 11/30/2004</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">482,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Services - 3.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">250,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Neff Corp., 10.25% due 6/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">225,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,975,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Panavision Inc., Term B, due
                 3/31/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,622,606</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>United Rental, Term C, due
                 8/12/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">998,906</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Universal Hospital Services, 10.25% due
                 3/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">680,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">7,009,012</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Manufacturing - 1.9%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Bucyrus International, 9.75% due
                 9/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,105,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,115,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Fairfield Manufacturing Company Inc.,
                 9.625% due 10/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,014,650</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">725,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Russell-Stanley Holding Inc, 10.875% due
                 2/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">630,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>TransTechnology, Term, due
                 8/31/2009**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,477,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top">&#160; </TD>
               <TD VALIGN="top"> <P ALIGN="right">4,227,900</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Medical</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Wilson Great Batch, 13% due 7/10/2007
                 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,162,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Equipment - 1.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Metals &amp; Mining -</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Acme Metals, Term, due 12/01/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,365,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>6.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>CC</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ca</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Anker Coal Group, Inc., 9.75% due
                 10/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,400,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">397,797</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Asarco Incorporated, Term B, due
                 5/15/2001**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">397,051</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">550,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Bayou Steel Corp., 9.50% due
                 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">507,375</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-7</P>
             <P ALIGN="left"></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="895">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="4"> <DIV ALIGN="right">&#160; </DIV>
               <P ALIGN="right"><B>Debt Strategies Fund, Inc., February 29,
                 2000</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <P ALIGN="left">SCHEDULE OF
                 INVESTMENTS (continued)</P>
               </TD>
               <TD COLSPAN="2" VALIGN="top"> <P ALIGN="right"><B><I>(in US
                 dollars)</I></B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P><B>S&amp;P</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P><B>Moody's</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P><B>Face</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>INDUSTRIES</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P><B>Ratings</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P><B>Ratings</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P><B>Amount</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P><B>Corporate Debt
                 Obligations</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right"><B>Value</B></P>
               </TD>
              </TR>
              <TR>
               <TD COLSPAN="9" VALIGN="top"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="228" ROWSPAN="2"> <P><B>Metals &amp;
                 Mining</B><B><I>
               <BR>
               (concluded)</I></B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P
                 ALIGN="right">US$5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>GS Technologies Operating
                 Co., 12% due 9/01/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16"> <P ALIGN="right">$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">2,800,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Ispat Inland LP**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">1,280,500</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="271">Term B, due 7/15/2005</TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">1,273,386</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">1,280,500</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="16"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="271">Term C, due 7/15/2006</TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">1,273,386</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Caa2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Metal Management Inc., 10%
                 due 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">750,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">550,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Pen Holdings Inc., 9.875%
                 due 6/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">500,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Russel Metals Inc., 10% due
                 6/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">1,020,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="16">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="top" WIDTH="16">&#160; </TD>
               <TD VALIGN="top" WIDTH="86"> <P ALIGN="right">14,286,698</P>
               </TD>
              </TR>
              <TR>
               <TD COLSPAN="9" VALIGN="top"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>Online Services -
                 0.5%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">675,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>PSINet Inc., 11% due
                 8/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">676,687</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Verio Inc., 11.25% due
                 12/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">512,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="top" WIDTH="16">&#160; </TD>
               <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="16">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="86"> <DIV ALIGN="right">1,189,187</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>Packaging - 0.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">400,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Consumers Packaging Inc.,
                 9.75% due 2/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">228,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>Paging - 0.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">525,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Metrocall Inc., 11% due
                 9/15/2008 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">435,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>Paper - 2.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">650,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>American Tissue Inc., 12.50%
                 due 7/15/2006 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">666,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">4,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Repap New Brunswick, Inc.,
                 Term B, due 6/01/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">4,407,188</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="16">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="top" WIDTH="16">&#160; </TD>
               <TD VALIGN="top" WIDTH="86"> <P ALIGN="right">5,073,438</P>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="9"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="228"> <P><B>Petroleum</B></P>
               </TD>
               <TD WIDTH="69"> <P>BB-</P>
               </TD>
               <TD WIDTH="70"> <P>Ba3</P>
               </TD>
               <TD WIDTH="107"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD WIDTH="5">&nbsp;</TD>
               <TD COLSPAN="3"> <P>Clark Refining &amp; Marketing Inc., Term,
                 due 11/15/2004**</P>
               </TD>
               <TD VALIGN="bottom" WIDTH="86"> <DIV
                 ALIGN="right">3,125,000</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>Refineries - 1.9%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>United Refining Co., 10.75%
                 due 6/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">1,200,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="16">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="top" WIDTH="16">&#160; </TD>
               <TD VALIGN="top" WIDTH="86"> <P ALIGN="right">4,325,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="228" ROWSPAN="2"> <P><B>Printing &amp;
                 </B><B>Publishing - 1.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Caa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">475,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Premier Graphics Inc.,
                 11.50% due 12/01/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">213,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">575,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Regional Independent Media,
                 10.50% due 7/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">575,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>T/SF Communications Corp.,
                 10.375% due 11/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">1,428,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Baa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>World Color Press Inc.,
                 8.375% due 11/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">488,883</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="16">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="top" WIDTH="16">&#160; </TD>
               <TD VALIGN="top" WIDTH="86"> <P ALIGN="right">2,706,383</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>Property</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>NRT Incorporated, Term, due
                 7/31/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">995,938</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>Management - 1.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">350,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Prison Realty Trust Inc.,
                 12% due 6/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">336,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD COLSPAN="3" VALIGN="top"> <P>Rockefeller Center Property
                 Trust, 11.404% due 12/31/2000 (Convertible) (d)</P>
               </TD>
               <TD VALIGN="bottom" WIDTH="86"> <DIV
                 ALIGN="right">1,670,000</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="16">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="86" ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="top" WIDTH="16">&#160; </TD>
               <TD VALIGN="top" WIDTH="86" ALIGN="right"> <DIV
                 ALIGN="right">3,001,938</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>Retail - Specialty
                 -</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>TM Group Holdings, 11% due
                 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">990,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228"> <P><B>2.7%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">4,409,504</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>US Office, Term B, due
                 6/09/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">3,293,899</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="70"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>United Auto Group, Inc., 11%
                 due 7/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">1,900,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="16">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="86"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="228">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="69">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="70">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="107"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="top" WIDTH="16">&#160; </TD>
               <TD VALIGN="top" WIDTH="86"> <P ALIGN="right">6,183,899</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" COLSPAN="9"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="228"> <P><B>Shipping - 1.0%</B></P>
               </TD>
               <TD VALIGN="top" WIDTH="69"> <P>B+</P>
               </TD>
               <TD VALIGN="top" WIDTH="70"> <P>B3</P>
               </TD>
               <TD VALIGN="top" WIDTH="107"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="top" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Equimar Shipholdings Ltd.,
                 9.875% due 7/01/2007 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">2,200,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" COLSPAN="9"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="228" ROWSPAN="2"> <P><B>Textile Mill
               <BR>
               </B><B>Products - 2.1%</B></P>
               </TD>
               <TD VALIGN="top" WIDTH="69"> <P>B</P>
               </TD>
               <TD VALIGN="top" WIDTH="70"> <P>Caa3</P>
               </TD>
               <TD VALIGN="top" WIDTH="107"> <P ALIGN="right">1,400,000</P>
               </TD>
               <TD VALIGN="top" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Galey &amp; Lord, Inc.,
                 9.125% due 3/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">434,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="69"> <P>B-</P>
               </TD>
               <TD VALIGN="top" WIDTH="70"> <P>Caa1</P>
               </TD>
               <TD VALIGN="top" WIDTH="107"> <P ALIGN="right">575,000</P>
               </TD>
               <TD VALIGN="top" WIDTH="5">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Globe Manufacturing Corp.,
                 10% due 8/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="16">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="86"> <P ALIGN="right">241,500</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-8</P>
             <P ALIGN="left"></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="906">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Joan Fabrics Corp.**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>2,617,820</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="337">Term B, due 6/30/2005</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">2,611,275</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>1,357,283</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="337">Term C, due 6/30/2006</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">1,353,890</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&nbsp;</TD>
               <TD VALIGN="top" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="91"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="top" COLSPAN="2">&#160; </TD>
               <TD VALIGN="top" WIDTH="91"> <P ALIGN="right">4,640,665</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="239" ROWSPAN="2"> <P><B>Tower
                 Construction</B><B>
               <BR>
               &amp; Leasing - 1.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>American Tower Systems Co.,
                 Term B, due 12/30/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">2,015,416</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>300,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Crown Castle International
                 Corporation, 9% due 5/15/2001</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">283,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <DIV
                 ALIGN="right">2,298,916</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="239" ROWSPAN="2"> <P><B>Transportation
               <BR>
               </B><B>Services - 3.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>D</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>Ca</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>+AmeriTruck Distribution
                 Corp., 12.25% due 11/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">63,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>2,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Autopistas del Sol SA,
                 10.25% due 8/01/2009 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">1,856,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18"> <P>&#163;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>3,200,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Eurotunnel, Term 2, due
                 7/15/2025**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">3,687,843</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>US$3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>MRS Logistica SA, 10.625%
                 due 8/15/2005 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">2,572,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>695,814</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Trism, 12% due 2/09/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">417,488</P>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="239">&nbsp;</TD>
               <TD WIDTH="51">&nbsp;</TD>
               <TD WIDTH="54">&nbsp;</TD>
               <TD WIDTH="18">&nbsp;</TD>
               <TD WIDTH="75">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="91"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="239">&nbsp;</TD>
               <TD WIDTH="51">&nbsp;</TD>
               <TD WIDTH="54">&nbsp;</TD>
               <TD WIDTH="18">&nbsp;</TD>
               <TD WIDTH="75">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="91"> <DIV ALIGN="right">8,597,831</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239"> <P><B>Utilities - 1.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>AES Corporation, 8.50% due
                 11/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">2,281,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239"> <P><B>Waste</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Norcal Waste Systems, 13.50%
                 due 11/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">1,052,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239"> <P><B>Management - 0.9%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>Ca</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Safety-Kleen Corporation,
                 9.25% due 5/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">645,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>350,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Stericycle Inc., 12.375% due
                 11/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">357,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <DIV
                 ALIGN="right">2,055,375</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="239" ROWSPAN="3">
                 <P><B>Wired</B><B>Telecommunications -</B><B>
               <BR>
               8.5%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>1,925,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Caprock Communications
                 Corporation, 11.50% due 5/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">1,953,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>2,100,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>E.Spire Communications,
                 10.52% due 7/01/2008 (d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">1,029,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>650,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Esprit Telecom Group PLC,
                 10.875% due 6/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">611,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>300,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Hermes Europe RailTel BV,
                 10.375% due 1/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">281,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Intermedia Communications
                 Inc., 8.875% due 11/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">1,870,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Metromedia Fiber Network,
                 10% due 11/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">491,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>BBB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>Baa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>1,050,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Metronet Communications,
                 9.95% due 6/15/2008 (d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">825,823</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Netia Holdings II BV,
                 13.125% due 6/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">532,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Nextlink Communications
                 Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">9% due 3/15/2008</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">1,395,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">9.45% due 4/15/2008 (d)</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">1,875,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Primus Telecommunications
                 Group:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>500,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">11.75% due 8/01/2004</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">495,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>850,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">11.25% due 1/15/2009</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">807,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Telegroup Inc.:_</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">8% due 11/01/2004 (d)</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">720,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">8% due 4/15/2005 (b)</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">15</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>3,333,333</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Teligent Inc., Term, due
                 7/01/2002**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">3,272,917</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>350,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Versatel Telecom BV, 11.875%
                 due 7/15/2009 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">357,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Williams Communications
                 Group Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>750,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">10.70% due 10/01/2007</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">770,625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>750,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">10.875% due 10/01/2009</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">765,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Worldwide Fiber Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>900,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">12.50% due 12/15/2005</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">942,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="54"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75"> <P>350,000</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM">12% due 8/01/2009</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">364,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="239">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="51">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="54">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="18">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="75">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="91"> <P ALIGN="right">19,359,505</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-9</P>
             <P ALIGN="left"></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="top" COLSPAN="5"> <DIV ALIGN="right"><B>Debt
                 Strategies Fund, Inc., February 29, 2000</B></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <P><B>SCHEDULE OF INVESTMENTS
                 (continued)</B></P>
               </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P ALIGN="right"><B>(in US
                 dollars)</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P><B>S&amp;P</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P><B>Moody's</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P><B>Face</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>INDUSTRIES</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P><B>Ratings</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P><B>Ratings</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P><B>Amount</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P><B>Corporate Debt
                 Obligations</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P><B>Value</B></P>
               </TD>
              </TR>
              <TR>
               <TD COLSPAN="10" VALIGN="top"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Wireless</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P>Dolphin Telecom PLC (d):</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" ROWSPAN="2" WIDTH="16%" NOWRAP>
                 <P><B>Telecommunications -</B></P>
               </TD>
               <TD VALIGN="top" ROWSPAN="2" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="top" ROWSPAN="2" WIDTH="5%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="top" ROWSPAN="2" WIDTH="2%"> <P ALIGN="right">US$</P>
               </TD>
               <TD VALIGN="top" ROWSPAN="2" WIDTH="6%"> <P
                 ALIGN="right">850,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%" COLSPAN="3"> &nbsp;&nbsp;11.50%
                 due 6/01/2008</TD>
               <TD VALIGN="BOTTOM" ROWSPAN="2" WIDTH="1%"> <P>$</P>
               </TD>
               <TD VALIGN="BOTTOM" ROWSPAN="2" WIDTH="25%"> <P
                 ALIGN="right">384,625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3"></TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>7.9%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">670,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> &nbsp;&nbsp;14% due
                 5/15/2009</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">281,400</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">950,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3" NOWRAP> <P>Microcell
                 Telecommunications, 12% due 6/01/2009 (d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">619,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P>Nextel Communications,
                 Inc.**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> &nbsp;&nbsp;Term B, due
                 6/30/2008</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">2,527,233</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> &nbsp;&nbsp;Term C, due
                 12/31/2008</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">2,527,233</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">2,075,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P>Nextel Partners Inc., 14%
                 due 2/01/2009 (d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">1,385,063</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD COLSPAN="3" VALIGN="top" NOWRAP> <P>PTC International
                 Finance BV, 10.269% due 7/01/2007 (d)</P>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="25%"> <DIV ALIGN="right">1,360,000</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">425,000</P>
               </TD>
               <TD COLSPAN="3" VALIGN="top" NOWRAP> <P>PTC International
                 Finance II SA, 11.25% due 12/01/2009 (b)</P>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="25%"> <DIV ALIGN="right">429,250</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">3,835,714</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P>PowerTel PCS, Term B, due
                 12/31/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">3,823,728</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="16%"> <P>&#160; </P>
               </TD>
               <TD VALIGN="top" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="top" WIDTH="5%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="top" WIDTH="2%"> <P>&#160; </P>
               </TD>
               <TD VALIGN="top" WIDTH="6%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD COLSPAN="3" VALIGN="top"> <P>Telesystem International
                 Wireless Inc., </P>
               </TD>
               <TD VALIGN="top" WIDTH="1%"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="top" WIDTH="25%"> <P ALIGN="right">1,280,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="top" COLSPAN="3">&nbsp;&nbsp;11.929% due 6/30/2007
                 (d)</TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="25%"> <DIV ALIGN="right"></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD COLSPAN="5" VALIGN="top" NOWRAP> <P>VoiceStream Wireless
                 Corporation/VoiceStream Wireless </P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="top" COLSPAN="3"> &nbsp;&nbsp;Holding Company: </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="25%"> <DIV ALIGN="right"></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">350,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> &nbsp;&nbsp;10.375% due
                 11/15/2009 (b)</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">361,813</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> &nbsp;&nbsp;Term B, due
                 2/25/2009**</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">3,017,577</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="25%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3">&#160; </TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="25%"> <DIV ALIGN="right">&#160;
                 17,997,797</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="top" COLSPAN="3" NOWRAP> <P><B>Total Investments in
                 Corporate Debt Obligations
               <BR>
               &nbsp;&nbsp;(Cost - $324,548,873) - 125.7%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%"></TD>
               <TD VALIGN="top" WIDTH="25%"> <DIV
                 ALIGN="right">284,573,208</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="top" ROWSPAN="2" WIDTH="6%"> <P><B>Shares
               <BR>
               </B><B>Held</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P ALIGN="center"><B>Stocks
                 &amp; Warrants</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD COLSPAN="10" VALIGN="top"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> <DIV ALIGN="right"></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Broadcast - Radio
                 &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">4,350</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P>Sirius Satellite (Warrants)
                 (a)(b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">565,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="16%"> <P><B>Television - 0.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>&#160; </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>&#160; </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%"> <P>&#160; </P>
               </TD>
               <TD VALIGN="top" WIDTH="6%"> <P ALIGN="right">25</P>
               </TD>
               <TD COLSPAN="3" VALIGN="top"> <P>Paxson Communications
                 (Convertible Preferred) (b)(c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="top" WIDTH="25%"> <DIV ALIGN="right">251,609</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">53</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P>Paxson Communications
                 (Preferred) (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">541,774</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">704</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <P>Paxson Communications
                 (Warrants) (a)(b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="25%"> <P ALIGN="right">2,112</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="25%"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="top" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="3">&#160; </TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="25%"> <P ALIGN="right">1,360,995</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="16%"> <P><B>Cable Television</B></P>
               </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <P ALIGN="right">500</P>
               </TD>
               <TD COLSPAN="3"> <P>Park 'N View Inc. (Warrants) (a)</P>
               </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <P ALIGN="right">500</P>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="16%"> <P><B>Services - 0.0%</B></P>
               </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD COLSPAN="3">&#160; </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="16%"> <P><B>Energy - 0.7%</B></P>
               </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <P ALIGN="right">111,533</P>
               </TD>
               <TD COLSPAN="3"> <P>Forcenergy Inc.</P>
               </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <P ALIGN="right">1,561,462</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="16%"> <P><B>High Technology - 0.1%</B></P>
               </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <P ALIGN="right">318,830</P>
               </TD>
               <TD COLSPAN="3"> <P>WGL Holdings (Warrants) (a)(e)</P>
               </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <P ALIGN="right">159,415</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="16%"> <P><B>Transportation</B></P>
               </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <P ALIGN="right">44,068</P>
               </TD>
               <TD COLSPAN="3"> <P>+Trism</P>
               </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <P ALIGN="right">22,034</P>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="16%"> <P><B>Services - 0.0%</B></P>
               </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD COLSPAN="3">&#160; </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD ROWSPAN="3" VALIGN="top" WIDTH="16%"> <P><B>Wired
               <BR>
               </B><B>Telecommunications-</B><B>
               <BR>
               0.3%</B></P>
               </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <P ALIGN="right">3,500</P>
               </TD>
               <TD COLSPAN="3"> <P>Metronet Communications (Warrants) (a)(b)</P>
               </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD VALIGN="bottom" WIDTH="25%"> <P ALIGN="right">719,250</P>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <P ALIGN="right">2,000</P>
               </TD>
               <TD COLSPAN="3"> <P>Unifi Communications (Warrants) (a)(b)</P>
               </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD VALIGN="bottom" WIDTH="25%"> <P ALIGN="right">20</P>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="5%">&nbsp;</TD>
               <TD WIDTH="5%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="6%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD COLSPAN="3">&nbsp;</TD>
               <TD WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="bottom" WIDTH="25%"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="16%">&nbsp;</TD>
               <TD WIDTH="5%">&nbsp;</TD>
               <TD WIDTH="5%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="6%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD COLSPAN="3">&nbsp;</TD>
               <TD WIDTH="1%">&nbsp;</TD>
               <TD WIDTH="25%"> <DIV ALIGN="right">719,270</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="top">
               <TD ROWSPAN="3" WIDTH="16%"> <P><B>Wireless</B><B>
               <BR>
               Telecommunications-</B><B>
               <BR>
               1.0%</B></P>
               </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <P ALIGN="right">2,135</P>
               </TD>
               <TD COLSPAN="3"> <P>Dobson Communications (Preferred) (c)</P>
               </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <P ALIGN="right">2,316,573</P>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD COLSPAN="3">&#160; </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="5%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD COLSPAN="3">&#160; </TD>
               <TD WIDTH="1%">&#160; </TD>
               <TD WIDTH="25%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="10"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="top">
               <TD ROWSPAN="2" WIDTH="16%">&#160; </TD>
               <TD ROWSPAN="2" WIDTH="5%">&#160; </TD>
               <TD ROWSPAN="2" WIDTH="5%">&#160; </TD>
               <TD ROWSPAN="2" WIDTH="2%">&#160; </TD>
               <TD ROWSPAN="2" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD COLSPAN="3"> <P><B>Total Investments in Stocks &amp;
                 Warrants</B></P>
               </TD>
               <TD ROWSPAN="2" WIDTH="1%">&nbsp;</TD>
               <TD ROWSPAN="2" WIDTH="25%"> <DIV ALIGN="right">6,140,249</DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="3%" COLSPAN="3"><B>&nbsp;&nbsp;(Cost - $5,598,022) -
                 2.7%</B></TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-10</P>
             <P><FONT
             SIZE="2"></FONT></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P><B>Face</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P><B>Amount</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%"> <P ALIGN="center"><B>Short-Term
                 Securities</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%"> <P><B>Commercial</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%"> <P>US$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>409,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" NOWRAP> <P>General Motors
                 Acceptance Corp., 5.94% due 3/01/2000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">409,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%"> <P><B>Paper*** - 0.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" NOWRAP> <P><B>Total Investments
                 in Short-Term Securities
               <BR>
               &nbsp;&nbsp;&nbsp; (Cost - $409,000) - 0.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">409,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" NOWRAP> <P><B>Total Investments
                 (Cost - $330,555,895) - 128.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">291,122,457</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" NOWRAP> <P><B>Unrealized
                 Appreciation on Forward Foreign Exchange</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" NOWRAP> <P><B>Contracts -
                 Net**** - 0.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">77,822</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%" HEIGHT="19">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%" HEIGHT="19">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%" HEIGHT="19">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%" HEIGHT="19">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%" HEIGHT="19">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" HEIGHT="19" NOWRAP>
                 <P><B>Liabilities in Excess of Other Assets - (28.6%)</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" HEIGHT="19"> <P
                 ALIGN="right">(64,725,737)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="19">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%" HEIGHT="19">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%" HEIGHT="19">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%" HEIGHT="19">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%" HEIGHT="19">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%" HEIGHT="19">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" HEIGHT="19" NOWRAP><B></B></TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" HEIGHT="19"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="19">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="58%" NOWRAP> <P><B>Net Assets -
                 100.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P ALIGN="right">$226,474,542</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="22%">&nbsp;</TD>
               <TD WIDTH="3%">&nbsp;</TD>
               <TD WIDTH="0%">&nbsp;</TD>
               <TD WIDTH="6%">&nbsp;</TD>
               <TD WIDTH="0%">&nbsp;</TD>
               <TD WIDTH="58%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="9%"> <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="2">
                 </TD>
               <TD WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
             </TABLE>
             <BR>
             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>(a)</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Warrants entitle the Fund to purchase a
                 predetermined number of shares of common stock and are
                 non-income producing. The purchase price and number of shares
                 are subject to adjustment under certain conditions until the
                 expiration date.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>(b)</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>The security may be offered and sold to
                 &quot;qualified institutional buyers&quot; under Rule 144A of
                 the Securities Act of 1933.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>(c)</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Represents a pay-in-kind security which may
                 pay interest/dividends in additional face/share.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>(d)</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Represents a zero coupon or step bond; the
                 interest rate shown reflects the effective yield at the time
                 of purchase by the Fund.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>(e)</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Restricted securities as to resale. The value
                 of the Fund's investment in restricted securities was
                 approximately $159,000, representing 0.1% of net
                 assets.</I></TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="4"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="40%" VALIGN="bottom"><B>Issue</B></TD>
               <TD WIDTH="18%" VALIGN="bottom"> <P ALIGN="center"><B>Acquisition
               <BR>
               </B><I><B> </B></I><B>Date</B></P>
               </TD>
               <TD WIDTH="17%" VALIGN="bottom"> <DIV
                 ALIGN="center"><B>Cost</B></DIV>
               </TD>
               <TD WIDTH="21%" VALIGN="bottom"> <DIV
                 ALIGN="center"><B>Value</B></DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="4"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="40%">WGL Holdings (Warrants) 9/03/1997</TD>
               <TD WIDTH="18%"> <DIV ALIGN="center">9/03/1997</DIV>
               </TD>
               <TD WIDTH="17%"> <DIV ALIGN="center">$318,000</DIV>
               </TD>
               <TD WIDTH="21%"> <DIV ALIGN="center">$159,415</DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="4"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="40%">Total</TD>
               <TD WIDTH="18%"><I></I></TD>
               <TD WIDTH="17%"> <DIV ALIGN="center">$318,000</DIV>
               </TD>
               <TD WIDTH="21%"> <DIV ALIGN="center">$159,415</DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="40%" VALIGN="top"><I></I></TD>
               <TD WIDTH="18%" VALIGN="top"><I></I></TD>
               <TD WIDTH="17%" VALIGN="top"> <DIV ALIGN="center"></DIV>
               <HR NOSHADE ALIGN="center" WIDTH="50%" SIZE="2"> </TD>
               <TD WIDTH="21%" VALIGN="top"> <HR NOSHADE ALIGN="center"
                 SIZE="2" WIDTH="40%"> </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="4"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>(f)</I></TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="4"><I>Mortgage-Backed Obligations are subject to
                 principal paydowns as a result of prepayments or refinancings
                 of the underlying mortgage instruments. As a result, the
                 average life may be substantially less than the original
                 maturity.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I></I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>See Notes to Financial Statements.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I></I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>(g)</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Floating rate note.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>* </I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Not Rated.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>**</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Floating or Variable Rate Corporate Debt -
                 The interest rates on floating or variable rate corporate debt
                 are subject to change periodically, based on the change in the
                 prime rate of a US Bank, LIBOR (London Interbank Offered Rate)
                 or, in some cases, another base lending rate. Corporate loans
                 represent 47.2% of the Fund's net assets.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>***</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Commercial Paper is traded on a discount
                 basis; the interest rate shown reflects the discount rate paid
                 at the time of purchase by the Fund.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%" VALIGN="top"><I>****</I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I>Forward foreign exchange contracts as of
                 February 29, 2000 were as follows:</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"><I></I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="40%"><I><B>Foreign
               <BR>
               Currency Sold</B></I></TD>
               <TD WIDTH="18%"> <DIV ALIGN="center"><I><B>Expiration
               <BR>
               Date</B></I></DIV>
               </TD>
               <TD WIDTH="17%"> <DIV ALIGN="center"></DIV>
               </TD>
               <TD WIDTH="21%"> <DIV ALIGN="center"><I><B>Unrealized
               <BR>
               Appreciation</B></I></DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="40%"><I>512,108</I></TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P ALIGN="center"><I>March
                 2000</I></P>
               </TD>
               <TD WIDTH="17%"><I></I></TD>
               <TD WIDTH="21%"> <DIV ALIGN="center"><I>$12,659</I></DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="40%"><I>&#163; 2,489,984</I></TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P ALIGN="center"><I>March
                 2000</I></P>
               </TD>
               <TD WIDTH="17%"><I></I></TD>
               <TD WIDTH="21%"> <DIV ALIGN="center"><I>65,163</I></DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="40%" NOWRAP><I><B>Total Unrealized Appreciation on
                 Forward
               <BR>
               Foreign Exchange Contracts - Net
               <BR>
               (US$ Commitment - $4,501,968)</B></I></TD>
               <TD WIDTH="18%"><I></I></TD>
               <TD WIDTH="17%"><I></I></TD>
               <TD VALIGN="bottom" WIDTH="21%"> <DIV
                 ALIGN="center"><I>$77,822</I></DIV>
               </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="40%"><I></I></TD>
               <TD WIDTH="18%"><I></I></TD>
               <TD WIDTH="17%"><I></I></TD>
               <TD VALIGN="bottom" WIDTH="21%"> <HR NOSHADE ALIGN="center"
                 WIDTH="35%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="4"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD WIDTH="2%"> <DIV ALIGN="center"><I>+</I></DIV>
               </TD>
               <TD COLSPAN="4"><I>Non-income producing security.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="2%"><I></I></TD>
               <TD COLSPAN="5"><I>Ratings of issues shown have not been audited
                 by Deloitte &amp; Touche LLP.</I></TD>
              </TR>
             </TABLE>
             <P><DIV ALIGN="center"></DIV>
             <P ALIGN="center">F-11</P>
             <P ALIGN="left"></P>
             <P ALIGN="left">&nbsp;</P>
             <P><P><P><P><P><P><P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="7" VALIGN="BOTTOM"> <P ALIGN="center"><B>Debt
                 Strategies Fund, Inc., February 29, 2000</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="4"><B>STATEMENT OF ASSETS,
                 LIABILITIES AND CAPITAL</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P><B>As of February 29,
                 2000</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P><B>Assets:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Investments, at value
                 (identified cost - $330,555,895)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left">$</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">291,122,457</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Cash</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P ALIGN="right">661</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Unrealized appreciation on
                 forward foreign exchange contracts</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">77,822</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Receivables:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%"> <P>Interest</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <P ALIGN="left">$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">6,350,131</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%"> <P>Securities sold</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">269,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">6,619,131</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="64%">&nbsp;</TD>
               <TD COLSPAN="2" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Prepaid expenses and other
                 assets</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">204,129</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="left" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Total assets</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">298,024,200</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="left" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="8"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P><B>Liabilities:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Loans</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">70,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Payables:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%"> <P>Interest on loans</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">876,385</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%"> <P>Dividends to shareholders</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">159,048</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%"> <P>Investment adviser</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">116,532</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%"> <P>Commitment fees</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">12,053</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">1,164,018</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="64%">&nbsp;</TD>
               <TD COLSPAN="2" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Deferred income</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P ALIGN="right">6,047</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Accrued expenses</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">379,593</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="left" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Total liabilities</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">71,549,658</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="left" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="8"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%" NOWRAP> <P><B>Net Assets:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Net assets</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left">$</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">226,474,542</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="left" WIDTH="100%"
                 SIZE="2"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P><B>Capital:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Common Stock, $.10 par
                 value, 200,000,000 shares authorized</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left">$</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">3,142,523</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Paid-in capital in excess of
                 par</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">310,639,558</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Undistributed investment
                 income - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">2,144,532</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Accumulated realized capital
                 losses on investments and foreign currency transactions -
                 net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">(50,217,316)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Unrealized depreciation on
                 investments and foreign currency transactions - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">(39,234,755)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="64%">&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="left" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Total - Equivalent to $7.21
                 per share based on 31,425,226 shares of capital stock
                 outstanding</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <DIV ALIGN="right">&#160;
                 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>(market price - $6.1875)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left">$</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP> <P
                 ALIGN="right">226,474,542</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="8%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="64%">&nbsp;</TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="left" WIDTH="100%"
                 SIZE="2"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="8"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="64%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <P ALIGN="center">See Notes to Financial Statements. </P>
             <P ALIGN="center">F-12</P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="4"><B>STATEMENT OF
                 OPERATIONS</B></TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P><B>For the Year Ended
                 February 29, 2000</B></P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD NOWRAP COLSPAN="8"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="11%" NOWRAP> <P><B>Investment
               <BR>
               </B><B>Income:</B></P>
               </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD COLSPAN="2" NOWRAP> <P>Interest and discount earned (net of
                 $35,794 foreign
               <BR>
               withholding tax)</P>
               </TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD NOWRAP WIDTH="10%"> <P ALIGN="right">$
                 &nbsp;&nbsp;34,958,766</P>
               </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Facility and other fees</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">290,359</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="11%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">Dividends</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%"> <DIV ALIGN="right">223,305</DIV>
               </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="11%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="11%">&#160; </TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2"> <P>Total income</P>
               </TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD NOWRAP WIDTH="10%"> <P ALIGN="right">35,472,430</P>
               </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="11%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P><B>Expenses:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Loan interest expense</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">$</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">&nbsp;&nbsp; 5,620,670</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Investment advisory fees</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">2,063,756</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Borrowing costs</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">263,187</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Professional fees</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">200,497</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Accounting services</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">104,589</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Printing and shareholder
                 reports</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">51,949</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Listing fees</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">49,018</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Transfer agent fees</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">48,489</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Organization expenses</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">38,786</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Custodian fees</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">33,104</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Directors' fees and
                 expenses</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">27,003</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Pricing services</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">14,188</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Other</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">58,829</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="11%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Total expenses</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">8,574,065</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="11%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Investment income - net</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">26,898,365</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="11%" ROWSPAN="6"> <P><B>Realized &amp;
                 Unrealized</B> <B>Gain (Loss) On Investments &amp; Foreign
                 </B><B>Currency </B><B>Transactions - </B><B>Net: </B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Realized gain (loss)
                 from:</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51%"> <P>Investments - net</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">(34,118,643)</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51%"> <P>Foreign currency
                 transactions - net</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">202,781</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">(33,915,862)</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="51%">&nbsp;</TD>
               <TD VALIGN="top" NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="top" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="top" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP COLSPAN="2">&nbsp; </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P>Change in unrealized
                 appreciation/depreciation on:</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51%"> <P>Investments - net</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">2,608,571</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51%"> <P>Foreign currency
                 transactions - net</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">(8,392)</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">2,600,179</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="11%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD WIDTH="51%">&nbsp;</TD>
               <TD NOWRAP COLSPAN="2"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P><B>Net Decrease in Net
                 Assets Resulting from Operations</B></P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <P
                 ALIGN="right">$&nbsp;&nbsp; (4,417,318)</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="11%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
               <TD NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD NOWRAP WIDTH="10%"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="2"> </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="8"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51%">&#160; </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="51%"> <P ALIGN="center">See Notes to
                 Financial Statements.</P>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="2%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="10%">&nbsp;</TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-13</P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
              <TR VALIGN="bottom">
               <TD WIDTH="13%">&#160; </TD>
               <TD COLSPAN="6"> <P ALIGN="center"><B>Debt Strategies Fund,
                 Inc., February 29, 2000</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; &#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD COLSPAN="4" VALIGN="BOTTOM" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3"><B>STATEMENTS OF CHANGES IN NET
                 ASSETS</B></TD>
               <TD COLSPAN="4" VALIGN="BOTTOM" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="3"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD COLSPAN="4" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&#160; &#160; </TD>
               <TD COLSPAN="4" VALIGN="BOTTOM" NOWRAP> <P ALIGN="center"><B>For
                 the Year Ended</B></P>
               </TD>
              </TR>
              <TR VALIGN="middle">
               <TD WIDTH="13%">&nbsp;</TD>
               <TD WIDTH="57%">&nbsp;</TD>
               <TD WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="3" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="57%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="center"><B>February 29,</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="center"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="center"><B>February 28,</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="57%"> <P><B><I>Increase (Decrease) in
                 Net Assets:</I></B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="center"><B>2000</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="center"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="center"><B>1999</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="6"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="13%"> <P><B>Operations:</B></P>
               </TD>
               <TD COLSPAN="2"> <P>Investment income - net</P>
               </TD>
               <TD WIDTH="11%" NOWRAP> <P ALIGN="right">$ &nbsp;26,898,365</P>
               </TD>
               <TD WIDTH="2%" NOWRAP> <DIV ALIGN="right"></DIV>
               </TD>
               <TD WIDTH="12%" NOWRAP> <P ALIGN="right">$&nbsp; 28,979,361</P>
               </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="57%"> <P>Realized loss on investments
                 and foreign currency transactions - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%"> <P></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right">(33,915,862</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left">)</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right">(14,808,405</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>Change in unrealized
                 appreciation/depreciation on investments and foreign currency
                 transactions - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right">2,600,179</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right">(46,022,747</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">)</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="13%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="11%" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="12%" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>Net decrease in net assets
                 resulting from operations</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right">(4,417,318</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left">)</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right">(31,851,791</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">)</TD>
              </TR>
              <TR VALIGN="middle">
               <TD WIDTH="13%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="11%" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="12%" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="6"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Dividends to</B></P>
               </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>Dividends to shareholders
                 from investment income - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right">(26,887,455</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left">)</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right">(29,289,396</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"><B>Shareholders:</B></TD>
               <TD COLSPAN="2" VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="11%" NOWRAP> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="top" WIDTH="12%" NOWRAP> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="6"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Capital Share</B></P>
               </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>Value of shares issued in
                 reinvestment of dividends</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right">&#151;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right">1,185,810</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"><B>Transactions:</B></TD>
               <TD COLSPAN="2" VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="11%" NOWRAP> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="top" WIDTH="12%" NOWRAP> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="6"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Net Assets:</B></P>
               </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>Total decrease in net
                 assets</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right">(31,304,773</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="left">)</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right">(59,955,377</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>Beginning of year</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right">257,779,315</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right">317,734,692</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD COLSPAN="2" VALIGN="top">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="11%" NOWRAP> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="top" WIDTH="12%" NOWRAP> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>End of year*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right">$226,474,542</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right">$257,779,315</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="13%">&nbsp;</TD>
               <TD COLSPAN="2">&nbsp;</TD>
               <TD WIDTH="11%" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="2"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="12%" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="2"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>* <I>Undistributed
                 investment income - net </I></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P
                 ALIGN="right"><I>$&nbsp;&nbsp;&nbsp;&nbsp;2,144,532</I></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP> <P
                 ALIGN="right"><I>$&nbsp;&nbsp;&nbsp; 1,930,842</I></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%"><I></I></TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="13%">&#160; </TD>
               <TD WIDTH="57%">&#160; </TD>
               <TD WIDTH="2%">&#160; </TD>
               <TD WIDTH="11%" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="2"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD WIDTH="12%" NOWRAP> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="2"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="6"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </TD>
               <TD WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="57%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="57%"> <P ALIGN="center">See Notes to
                 Financial Statements.</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%" NOWRAP>&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
              </TR>
             </TABLE>
             <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"><P
               ALIGN="center">F-14</P>
             <P> <P>&nbsp;
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3" HEIGHT="0"><B>STATEMENT OF CASH
                 FLOWS</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <DIV
                 ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="3" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP HEIGHT="0">&nbsp;</TD>
               <TD WIDTH="11%" NOWRAP HEIGHT="0"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P><B>For the Year
                 Ended February 29, 2000</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" NOWRAP COLSPAN="5" HEIGHT="0"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" NOWRAP HEIGHT="0"> <P><B>Cash
                 Provided by</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Net decrease in
                 net assets resulting from operations</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0"> <P
                 ALIGN="left">$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(4,417,318</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="23%" NOWRAP HEIGHT="0"> <P><B>Operating
                 Activities:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Adjustments to
                 reconcile net decrease in net assets resulting from operations
                 to net cash provided by
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operating activities:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="60%" HEIGHT="0">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in receivables</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(462,623</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="60%" HEIGHT="0">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Decrease in other assets</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">3,401</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="60%" HEIGHT="0">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in other
                 liabilities</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">251,020</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="60%" HEIGHT="0">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Realized and unrealized loss
                 on investments and foreign currency transactions - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">31,315,683</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="60%" HEIGHT="0">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of discount</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(2,504,569</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="23%" HEIGHT="0">&nbsp;</TD>
               <TD WIDTH="2%" HEIGHT="0">&nbsp;</TD>
               <TD WIDTH="60%" HEIGHT="0">&nbsp;</TD>
               <TD NOWRAP COLSPAN="2" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Net cash provided
                 by operating activities</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">24,185,594</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="23%" HEIGHT="0">&nbsp;</TD>
               <TD COLSPAN="2" HEIGHT="0">&nbsp;</TD>
               <TD NOWRAP COLSPAN="2" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="5" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0"> <P><B>Cash Provided
                 by</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Proceeds from
                 sales of long-term investments</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">210,264,959</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0"> <P><B>Investing
                 Activities:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Purchases of
                 long-term investments</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(166,108,607</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Purchases of
                 short-term investments</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(144,297,825</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Proceeds from
                 sales and maturities of short-term investments</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">144,733,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="23%" HEIGHT="0">&nbsp;</TD>
               <TD COLSPAN="2" HEIGHT="0">&nbsp;</TD>
               <TD NOWRAP COLSPAN="2" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Net cash provided
                 by investing activities</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">44,591,527</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" COLSPAN="2" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" NOWRAP COLSPAN="2" HEIGHT="0"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="5" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0"> <P><B>Cash Used
                 for</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Cash receipts
                 from borrowings</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">136,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0"> <P><B>Financing
                 Activities:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Cash payments
                 from borrowings</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(178,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Dividends paid to
                 shareholders</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(26,923,236</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Net cash used for
                 financing activities</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(68,923,236</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="5" HEIGHT="0"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0"> <P><B>Cash:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Net decrease in
                 cash</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">(146,115</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>)</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Cash at beginning
                 of year</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">146,776</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Cash at end of
                 year</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0"> <P>$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">661</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="23%" HEIGHT="0">&nbsp;</TD>
               <TD COLSPAN="2" HEIGHT="0">&nbsp;</TD>
               <TD NOWRAP COLSPAN="2" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="middle">
               <TD COLSPAN="5" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0"> <P><B>Cash
                 Flow</B></P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P>Cash paid for
                 interest</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0"> <P>$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">5,569,304</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%"
                 HEIGHT="0"><B>Information:</B></TD>
               <TD VALIGN="top" COLSPAN="2" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" NOWRAP COLSPAN="2" HEIGHT="0"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="5" HEIGHT="0"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="60%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="23%" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="60%" HEIGHT="0"> <P
                 ALIGN="center">See Notes to Financial Statements.</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" NOWRAP>&nbsp;</TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-15</P>
             <P><FONT
             SIZE="2"></FONT></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="95%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD COLSPAN="7" VALIGN="BOTTOM"> <P ALIGN="right"><B>Debt
                 Strategies Fund, Inc., February 29, 2000</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P><B>FINANCIAL
                 HIGHLIGHTS</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%">&#160; </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P><B>The following per share
                 data and ratios have been derived
               <BR>
               from information provided in the financial statements.</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P ALIGN="center"><B>For the
                 Year Ended</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" ROWSPAN="3" WIDTH="21%">&#160; <P
                 ALIGN="center"><B>For the Period
               <BR>
               May 30, 1997&#134;
               <BR>
               to February 28, 1998</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD COLSPAN="3" VALIGN="top"> <HR NOSHADE ALIGN="center"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P><B><I>Increase (Decrease) in
                 Net Asset Value:</I></B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="center"><B>February
                 29, 2000&#134;&#134;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="center"><B>February
                 28, 1999</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Per Share</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Net asset value, beginning
                 of period</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;8.20</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.15</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;10.00</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"><B>Operating</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV
                 ALIGN="left"><B>Performance:</B></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Investment income - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">.86</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">.91</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">.71</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Realized and unrealized gain
                 (loss) on investments and foreign currency transactions -
                 net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">(.99)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">(1.93)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">.09</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Total from investment
                 operations</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">(.13)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">(1.02)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">.80</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Less dividends from
                 investment income - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">(.86)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">(.93)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">(.63)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Capital charge resulting
                 from the issuance of Common Stock</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">(.02)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Net asset value, end of
                 period</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;7.21</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;8.20</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;10.15</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" HEIGHT="0" WIDTH="33%"> <P>Market price per
                 share, end of period</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1875</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.625</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2" HEIGHT="0"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;10.5625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <DIV ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </DIV>
               <DIV ALIGN="right"></DIV>
               <DIV ALIGN="right"></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="13%"> <P><B>Total
                 Investment</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Based on market price per
                 share</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">(8.30%)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">(19.90%)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P
                 ALIGN="right">12.38%&#134;&#134;</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="13%"> <P><B>Return:**</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="top" WIDTH="15%"> <DIV ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="80%" SIZE="2"> &#160; </DIV>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="14%"> <DIV ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="80%" SIZE="2"> &#160; </DIV>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="21%"> <DIV ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="80%" SIZE="2"> &#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Based on net asset value per
                 share</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">(.64%)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">(10.36%)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P
                 ALIGN="right">7.99%&#134;&#134;</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <DIV ALIGN="right"></DIV>
               <HR NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> <DIV
                 ALIGN="right"></DIV>
               <DIV ALIGN="right"></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" NOWRAP WIDTH="13%"> <P><B>Ratios to Average
               <BR>
               Net Assets:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Expenses, net of
                 reimbursement and excluding interest expense</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1.19%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1.09%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">.61%*</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&#160;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160;</TD>
               <TD VALIGN="top" WIDTH="15%"> <DIV ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="80%" SIZE="2"> </DIV>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="14%"> <DIV ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="80%" SIZE="2"> &#160; </DIV>
               </TD>
               <TD VALIGN="top" WIDTH="1%">&#160; </TD>
               <TD VALIGN="top" WIDTH="21%"> <DIV ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="80%" SIZE="2"> &#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Expenses, net of
                 reimbursement</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">3.46%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">3.48%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">2.28%*</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Expenses</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">3.46%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">3.48%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">2.56%*</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Investment income - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">10.85%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">10.03%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">9.64%*</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <DIV ALIGN="right"></DIV>
               <DIV ALIGN="right"> <HR NOSHADE ALIGN="right" WIDTH="100%"
                 SIZE="1"> </DIV>
               <DIV ALIGN="right"></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Leverage:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Amount of borrowings, end of
                 period (in thousands)</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">&nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;70,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;112,000</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;142,600</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Average amount of borrowings
                 outstanding during the period (in thousands)</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;97,120</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <P
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;120,528</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;85,903</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Average amount of borrowings
                 outstanding per share during the period</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.09</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;3.84</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;2.79</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="top" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <DIV ALIGN="right"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </DIV>
               <DIV ALIGN="right"></DIV>
               <DIV ALIGN="right"></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Supplemental</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Net assets, end of period
                 (in thousands)</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;226,475</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;257,779</P>
               </TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;$&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;317,735</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"><B>Data:</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="33%"> <P>Portfolio turnover</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">48.73%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">61.30%</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <P ALIGN="right">43.79%</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="33%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="21%"> <HR NOSHADE ALIGN="right"
                 WIDTH="80%" SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P>*<I> Annualized.</I></P>
             <P>**<I> Total investment returns exclude the effects of sales
               charges. Total investment returns based on market value, which
               can be significantly greater or
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;lesser than the net asset value,
               may result in substantially different returns.</I></P>
             <P><I>&#134;Commencement of operations.</I></P>
             <P>&#134;&#134;<I>Based on average shares outstanding.</I></P>
             <P>&#134;&#134;<I>Aggregate total investment return.</I></P>
             <P>See Notes to Financial Statements.</P>
             <P ALIGN="center">F-16</P>
             <P><B>NOTES TO FINANCIAL STATEMENTS</B></P>
             <P><B>1. Significant Accounting Policies:</B></P>
             <P>Debt Strategies Fund, Inc. (the &quot;Fund&quot;) is registered
               under the Investment Company Act of 1940 as a diversified,
               closed-end management investment company. The Fund's financial
               statements are prepared in accordance with generally accepted
               accounting principles, which may require the use of management
               accruals and estimates. The Fund determines and makes available
               for publication the net asset value of its Common Stock on a
               weekly basis. The Fund's Common Stock is listed on the New York
               Stock Exchange under the symbol DBS.</P>
             <P><I>(a) Corporate debt obligations </I>- The Fund invests
               principally in debt obligations of companies, including
               corporate loans made by banks and other financial institutions
               and both privately and publicly offered corporate bonds and
               notes. Because agents and intermediaries are primarily
               commercial banks, the Fund's investment in corporate loans could
               be considered concentrated in financial institutions.</P>
             <P><I>(b) Valuation of investments </I>- Corporate Loans are
               valued in accordance with guidelines established by the Board of
               Directors. Until July 9, 1999, Corporate Loans for which an
               active secondary market exists and for which the Investment
               Adviser can obtain at least two quotations from banks or dealers
               in Corporate Loans were valued by calculating the mean of the
               last available bid and asked prices in the markets for such
               Corporate Loans, and then using the mean of those two means. If
               only one quote for a particular Corporate Loan was available,
               such Corporate Loan was valued on the basis of the mean of the
               last available bid and asked prices in the market. As of July
               12, 1999, pursuant to the approval of the Board of Directors,
               the Corporate Loans are valued at the mean between the last
               available bid and asked prices from one or more brokers or
               dealers as obtained from Loan Pricing Corporation. For Corporate
               Loans for which an active secondary market does not exist to a
               reliable degree in the opinion of the Investment Adviser, such
               Corporate Loans will be valued by the Investment Adviser at fair
               value, which is intended to approximate market value.</P>
             <P>Other portfolio securities may be valued on the basis of prices
               furnished by one or more pricing services which determines
               prices for normal, institutional-size trading units of such
               securities using market information, transactions for comparable
               securities and various relationships between securities that are
               generally recognized by institutional traders. In certain
               circumstances, portfolio securities are valued at the last sale
               price on the exchange that is the primary market for such
               securities, or the last quoted bid price for those securities
               for which the over-the-counter market is the primary market or
               for listed securities in which there were no sales during the
               day. The value of interest rate swaps, caps, and floors is
               determined in accordance with a formula and then confirmed
               periodically by obtaining a bank quotation. Options written or
               purchased are valued at the last sale price in the case of
               exchange-traded options. In the case of options traded in the
               over-the-counter market, valuation is the last asked price
               (options written) or the last bid price (options purchased).
               Short-term securities with remaining maturities of sixty days or
               less are valued at amortized cost, which approximates market
               value. Securities and assets for which market price quotations
               are not readily available are valued at fair value as determined
               in good faith by or under the direction of the Board of
               Directors of the Fund.</P>
             <P><I>(c) Derivative financial instruments </I>- The Fund may
               engage in various portfolio strategies to seek to increase its
               return by hedging its portfolio against adverse movements in the
               debt and currency markets. Losses may arise due to changes in
               the value of the contract or if the counterparty does not
               perform under the contract.</P>
             <P>&#183; <I>Financial futures contracts </I>- The Fund may
               purchase or sell financial futures contracts and options on such
               futures contracts for the purpose of hedging the market risk
               on</P>
             <P ALIGN="center">F-17</P>
             <P ALIGN="right"><B>Debt Strategies Fund, Inc., February 29,
               2000</B></P>
             <P><B>NOTES TO FINANCIAL STATEMENTS <I>(continued)</I></B></P>
             <P>existing securities or the intended purchase of securities.
               Futures contracts are contracts for delayed delivery of
               securities at a specific future date and at a specific price or
               yield. Upon entering into a contract, the Fund deposits and
               maintains as collateral such initial margin as required by the
               exchange on which the transaction is effected. Pursuant to the
               contract, the Fund agrees to receive from or pay to the broker
               an amount of cash equal to the daily fluctuation in value of the
               contract. Such receipts or payments are known as variation
               margin and are recorded by the Fund as unrealized gains or
               losses. When the contract is closed, the Fund records a realized
               gain or loss equal to the difference between the value of the
               contract at the time it was opened and the value at the time it
               was closed.</P>
             <P>&#183; <I>Forward foreign exchange contracts </I>- The Fund is
               authorized to enter into forward foreign exchange contracts as a
               hedge against either specific transactions or portfolio
               positions. Such contracts are not entered on the Funds records.
               However, the effect on operations is recorded from the date the
               Fund enters into such contracts.</P>
             <P>&#183; <I>Options </I>- The Fund is authorized to write covered
               call and put options and purchase call and put options. When the
               Fund writes an option, an amount equal to the premium received
               by the Fund is reflected as an asset and an equivalent
               liability. The amount of the liability is subsequently marked to
               market to reflect the current market value of the option
               written. When a security is purchased or sold through an
               exercise of an option, the related premium paid (or received) is
               added to (or deducted from) the basis of the security acquired
               or deducted from (or added to) the proceeds of the security
               sold. When an option expires (or the Fund enters into a closing
               transaction), the Fund realizes a gain or loss on the option to
               the extent of the premiums received or paid (or gain or loss to
               the extent the cost of the closing transaction exceeds the
               premium paid or received). Written and purchased options are
               non-income producing investments.</P>
             <P>&#183; <I>Interest rate transactions </I>- The Fund is
               authorized to enter into interest rate swaps and purchase or
               sell interest rate caps and floors. In an interest rate swap,
               the Fund exchanges with another party their respective
               commitments to pay or receive interest on a specified notional
               principal amount. The purchase of an interest rate cap (or
               floor) entitles the purchaser, to the extent that a specified
               index exceeds (or falls below) a predetermined interest rate, to
               receive payments of interest equal to the difference between the
               index and the predetermined rate on a notional principal amount
               from the party selling such interest rate cap (or floor).</P>
             <P><I>(d) Foreign currency transactions </I>- Transactions
               denominated in foreign currencies are recorded at the exchange
               rate prevailing when recognized. Assets and liabilities
               denominated in foreign currencies are valued at the exchange
               rate at the end of the period. Foreign currency transactions are
               the result of settling (realized) or valuing (unrealized) assets
               or liabilities expressed in foreign currencies into US dollars.
               Realized and unrealized gains or losses from investments include
               the effects of foreign exchange rates on investments.</P>
             <P><I>(e) Income taxes </I>- It is the Funds policy to comply with
               the requirements of the Internal Revenue Code applicable to
               regulated investment companies and to distribute substantially
               all of its taxable income to its shareholders. Therefore, no
               Federal income tax provision is required. Under the applicable
               foreign tax law, a withholding tax may be imposed on interest,
               dividends and capital gains at various rates.</P>
             <P><I>(f) Security transactions and investment income </I>-
               Security transactions are recorded on the dates the transactions
               are entered into (the trade dates). Dividend income is recorded
               on the ex-dividend dates. Interest income (including
               amortization of discount) is recognized on the accrual basis.
               Realized gains and losses on security transactions are
               determined on the identified cost basis. Facility fees are
               accreted to income over the term of the related loan.</P>
             <P> <I>(g) Organization expenses </I>- In accordance with
               Statement of Position 98-5, unamortized organization expenses
               of</P>
             <P ALIGN="center">F-18</P>
             <P> $38,786 were expensed during the year ended February 29, 2000.
               This was considered to be a change in accounting principle and
               had no material impact on the operations of the Fund.</P>
             <P><I>(h) Dividends and distributions </I>- Dividends from net
               investment income are declared and paid monthly. Distributions
               of capital gains are recorded on the ex-dividend dates.</P>
             <P> <I>(i) Reclassification </I>- Generally accepted accounting
               principles require that certain components of net assets be
               adjusted to reflect permanent differences between financial and
               tax reporting. Accordingly, current year's permanent book/tax
               differences of $202,780 have been reclassified between
               undistributed net investment income and accumulated net realized
               capital losses. Those reclassifications have no effect on net
               assets or net asset value per share.</P>
             <P><B>2. Investment Advisory Agreement and Transactions with
               Affiliates:</B></P>
             <P>The Fund has entered into an Investment Advisory Agreement with
               Fund Asset Management, L.P. (&quot;FAM&quot;). The general
               partner of FAM is Princeton Services, Inc. (&quot;PSI&quot;), an
               indirect wholly-owned subsidiary of Merrill Lynch &amp; Co.,
               Inc. (&quot;ML &amp; Co.&quot;), which is the limited
               partner.</P>
             <P>FAM is responsible for the management of the Fund's portfolio
               and provides the necessary personnel, facilities, equipment and
               certain other services necessary to perform the investment
               advisory function. For such services the Fund pays a monthly fee
               at an annual rate of .60% of the Fund's average weekly net
               assets plus the proceeds of any outstanding borrowings used for
               leverage.</P>
             <P>For the year ended February 29, 2000, the Fund paid Merrill
               Lynch Security Pricing Service, an affiliate of Merrill Lynch,
               Pierce, Fenner &amp; Smith Incorporated
               (&quot;MLPF&amp;S&quot;), $520 for security price quotations to
               compute the net asset value of the Fund.</P>
             <P>Accounting services are provided to the Fund by FAM at cost.</P>
             <P>Certain officers and/or directors of the Fund are officers
               and/or directors of FAM, PSI, and/or ML &amp; Co.</P>
             <P><B>3. Investments:</B></P>
             <P>Purchases and sales of investments, excluding short-term
               securities, for the year ended February 29, 2000 were
               $164,083,607 and $209,536,131, respectively.</P>
             <P>Net realized gains (losses) for the year ended February 29,
               2000 and net unrealized gains (losses) as of February 29, 2000
               were as follows:</P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="center"><B>Realized</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="center"><B>Unrealized</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="center"><B>Gains (Losses)</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="center"><B>Gains (Losses)</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>Long-term investments</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">$(34,118,643)</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">$(39,433,438)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>Unfunded corporate loans</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">122,042</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>Forward foreign exchange contracts</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">176,466</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">77,822</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>Foreign currency transactions</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">26,315</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">(1,181)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>Total</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">$(33,915,862)</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">$(39,234,755)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="2"> </TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P>As of February 29, 2000, net unrealized depreciation for
               Federal income tax purposes aggregated $39,502,060, of which
               $3,982,938 related to appreciated securities and $43,484,998
               related to depreciated securities. The aggregate cost of
               investments at February 29, 2000 for Federal income tax purposes
               was $330,624,517.</P>
             <P><B>4. Capital Stock Transactions:</B></P>
             <P>The Fund is authorized to issue 200,000,000 shares of Common
               Stock, par value $.10 per share. Shares issued and outstanding
               during the year ended February 29, 2000 remained constant and
               during the year ended February 28, 1999 increased by 122,228 as
               a result of dividend reinvestment.</P>
             <P><B>5. Unfunded Loan Interests:</B></P>
             <P>As of February 29, 2000, the Fund had unfunded loan commitments
               of $15,955, which would be extended at the option of the
               borrower, pursuant to the following loan agreement:</P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Borrower</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="center"><B>Unfunded
               <BR>
               Commitment
               <BR>
               (in thousands)</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P>Breed Technologies Inc</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="center">$16</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-19</P>
             <P ALIGN="right"><B>Debt Strategies Fund, Inc., February 29,
               2000</B></P>
             <P><B>NOTES TO FINANCIAL STATEMENTS <I>(concluded)</I></B></P>
             <P><B>6. Short-Term Borrowings:</B></P>
             <P>On August 3, 1999, the Fund extended its one-year credit
               agreement with The Bank of New York, Fleet National Bank and
               certain other institutions party thereto. The agreement is a
               $160,000,000 credit facility bearing interest at the Prime rate,
               Federal Funds rate plus .55% and/or Eurodollar rate plus .55%.
               For the year ended February 29, 2000, the average amount
               borrowed by the Fund was approximately $97,120,000 and the daily
               weighted average interest rate was 5.77%. For the year ended
               February 29, 2000, facility and commitment fees were
               approximately $263,000.</P>
             <P><B>7. Capital Loss Carryforward:</B></P>
             <P>At February 29, 2000, the Fund had a net capital loss carry
               forward of approximately $33,583,000, of which $264,000 expires
               in 2006, $12,067,000 expires in 2007 and $21,252,000 expires in
               2008. This amount will be available to offset like amounts of
               any future taxable gains.</P>
             <P><B>8. Subsequent Event:</B></P>
             <P>On March 7, 2000, the Fund's Board of Directors declared an
               ordinary income dividend to Common Stock shareholders in the
               amount of $.065926 per share, payable on March 31, 2000 to
               shareholders of record as of March 17, 2000.</P>
             <P ALIGN="center">F-20</P>
             <P ALIGN="center">[This page is intentionally left blank.]</P>
             <P ALIGN="center">F-21</P>
             <P><FONT
             SIZE="2"></FONT> </P>
             <P ALIGN="center">
             <A NAME="2"></A>
             Audited Financial Statements for
             <BR>
             Debt Strategies Fund II, Inc.
             <BR>
             for the Year Ended February 29, 2000</P>
             <P ALIGN="center">&nbsp;</P>
             <P ALIGN="center">&nbsp;</P>
             <P ALIGN="center">F-22 </P>
             <P ALIGN="left"></P>
             <P ALIGN="left">INDEPENDENT AUDITORS' REPORT<B> </B></P>
             <P ALIGN="left">The Board of Directors and Shareholders,
             <BR>
             Debt Strategies Fund II, Inc.:</P>
             </DIV>
             <P>We have audited the accompanying statement of assets,
               liabilities and capital, including the schedule of investments,
               of Debt Strategies Fund II, Inc. as of February 29, 2000, the
               related statements of operations and cash flows for the year
               then ended, and the statement of changes in net assets, and the
               financial highlights for the year then ended and for the period
               March 27, 1998 (commencement of operations) to February 28,
               1999. These financial statements and the financial highlights
               are the responsibility of the Fund's management. Our
               responsibility is to express an opinion on these financial
               statements and the financial highlights based on our audits.</P>
             <P>We conducted our audits in accordance with generally accepted
               auditing standards. Those standards require that we plan and
               perform the audit to obtain reasonable assurance about whether
               the financial statements and the financial highlights are free
               of material misstatement. An audit includes examining, on a test
               basis, evidence supporting the amounts and disclosures in the
               financial statements. Our procedures included confirmation of
               securities owned at February 29, 2000 by correspondence with the
               custodian and financial intermediaries; where replies were not
               received from financial intermediaries, we performed other
               auditing procedures. An audit also includes assessing the
               accounting principles used and significant estimates made by
               management, as well as evaluating the overall financial
               statement presentation. We believe that our audits provide a
               reasonable basis for our opinion. </P>
             <P>In our opinion, such financial statements and financial
               highlights present fairly, in all material respects, the
               financial position of Debt Strategies Fund II, Inc. as of
               February 29, 2000, the results of its operations, the changes in
               its net assets, its cash flows, and the financial highlights for
               the respective stated periods in conformity with generally
               accepted accounting principles.</P>
             <P>Deloitte &amp; Touche LLP
             <BR>
             Princeton, New Jersey
             <BR>
             April 17, 2000</P>
             <P ALIGN="center">F-23 </P>
             <P ALIGN="left"></P>
             <P ALIGN="right"><B>Debt Strategies Fund II, Inc., February 29,
               2000
             <BR>
             (in US dollars)</B></P>
             <P ALIGN="left"><B>SCHEDULE OF INVESTMENTS</B></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>INDUSTRIES</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P><B>S&amp;P
               <BR>
               Ratings</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P><B>Moody's
               <BR>
               Ratings</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P><B>Face
               <BR>
               Amount</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P><B>Corporate Debt
                 Obligations</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P><B>Value</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Advertising - 0.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" NOWRAP> <P ALIGN="right">US$
                 1,300,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Adams Outdoor Advertising
                 Inc., 10.75% due 3/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%"> <P>$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,348,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Aircraft &amp; Parts -
                 1.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Argo-Tech Corporation,
                 8.625% due 10/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,050,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>BE Aerospace, 9.50% due
                 11/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">921,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">6,970,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Compass Aerospace Corp.,
                 10.125% due 4/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,136,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">6,107,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Amusement &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>AMC Entertainment Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Recreational</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>9.50% due 3/15/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">765,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Services - 2.9%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">850,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>9.50% due 2/01/2011</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">641,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,095,236</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>American Ski, Term, due
                 5/31/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,033,331</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Carmike Cinemas Inc., 9.375%
                 due 2/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">750,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Hollywood Entertainment,
                 10.625% due 8/15/2004 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,715,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,912,500</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Kerasotes Theatres, Inc.,
                 Term B, due 12/31/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,900,219</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,300,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Loews Cineplex
                 Entertainment, 8.875% due 8/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,007,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>SFX Entertainment, Term B,
                 due 6/30/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,001,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">15,814,550</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Apparel - 0.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>CS Brooks Canada, Inc.,
                 Term, due 6/25/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,225,625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Automotive</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>American Axle and
                 Manufacturing Inc., 9.75% due 3/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,196,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Equipment - 6.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>D</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">543,579</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>_Breed Technologies Inc.,
                 Revolving Credit, due 4/27/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">319,081</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Citation Corporation, Term
                 B, due 12/01/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,980,626</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">9,900,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Collins &amp; Aikman Corp.,
                 Term C, due 12/31/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">9,847,411</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Group 1 Automotive Inc.,
                 10.875% due 3/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,252,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,200,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Holley Performance Products,
                 12.25% due 9/15/2007 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,104,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Newcor Inc., 9.875% due
                 3/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,770,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Safelite Glass Corp.**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,051,121</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Term B, due 12/23/2003</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,119,912</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,051,121</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Term C, due 12/23/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,119,912</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,050,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Special Devices Inc.,
                 11.375% due 12/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,394,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Tenneco Inc., 11.625% due
                 10/15/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,286,563</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">800,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Venture Holdings Trust, 12%
                 due 6/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">680,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">32,070,880</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Broadcast - Radio
                 &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,875,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Ackerley Group Inc., 9% due
                 1/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,600,781</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Television - 7.7%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Benedek Broad, Term, due
                 11/20/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,992,190</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,700,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Citadel Broadcasting
                 Company, 9.25% due 11/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,632,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Cumulus Media, Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>10.375% due 7/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,040,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,200,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Term B, due 9/30/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,206,376</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">800,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Term C, due 2/28/2008**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">804,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,200,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Gocom Communications, Term
                 B, due 12/31/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,189,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,525,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Granite Broadcasting, 9.375%
                 due 12/01/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,448,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Jones International Networks
                 Ltd., 11.75% due 7/01/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,261,250</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-24 </P>
             <P ALIGN="left"></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">18,550,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Radio Unica Corp., 14.636%
                 due 8/01/2006 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">11,872,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,950,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Sirius Satellite, 14.50% due
                 5/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,846,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,200,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Spanish Broadcasting System,
                 9.625% due 11/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,161,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Young Broadcasting Inc.,
                 8.75% due 6/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,335,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">41,390,347</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Building &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,600,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Webb (Del E.) Corp., 10.25%
                 due 2/15/2010</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,396,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Construction -
                 0.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Building</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,950,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Amatek Industries, 12% due
                 2/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">5,593,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Materials - 2.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,100,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Republic Group Inc., 9.50%
                 due 7/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,590,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P
                 ALIGN="right">(Euro)&nbsp;639,115</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Schulte GmbH &amp; Co. KG,
                 Term B, due 12/02/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">612,263</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">US$ 3,000,000</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Trussway Industries, Term B,
                 due 7/08/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,985,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">13,780,263</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Business</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">7,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Muzak Holdings LLC, 13% due
                 3/15/2010 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,500,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Services - 0.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Cable Television</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>CSC Holdings Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Services - 11.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,025,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>7.25% due 7/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">956,889</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,275,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>7.625% due 7/15/2018</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,174,090</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Charter Communications
                 Holdings LLC:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,800,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>8.625% due 4/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,548,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>10% due 4/01/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,968,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Term B, due 3/18/2008**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">5,014,665</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Classic Cable Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.375% due 8/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">937,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,925,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>10.50% due 3/01/2010 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,928,656</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,605,263</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Term C, due 1/31/2008**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,608,520</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">17,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Coaxial LLC, 12.875% due
                 8/15/2008 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">10,625,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BBB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,300,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Comcast Corp., 9.375% due
                 5/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,507,604</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Echostar DBS Corporation:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">900,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.25% due 2/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">877,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,225,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.375% due 2/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,129,937</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Golden Sky Systems, 12.375%
                 due 8/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,696,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Insight Midwest/Insight
                 Capital, 9.75% due 10/01/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,010,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Multicanal SA, 10.50% due
                 4/15/2018</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,615,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Pegasus Communications:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">450,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.75% due 12/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">434,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Term, due 4/30/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,005,834</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>D</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>+Supercanal Holdings SA,
                 11.50% due 5/15/2005 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,180,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Telewest Communications
                 PLC:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>11.25% due 11/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,062,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,800,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>9.875% due 2/01/2010 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">3,804,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>United Pan-Europe
                 Communications, 11.25% due 2/01/2010 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,518,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">59,604,445</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="8"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Chemicals - 3.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BBB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Baa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Equistar Chemicals LP, 8.75%
                 due 2/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,873,800</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,442,437</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="42%"> <P>Huntsman Corp., Term B, due
                 6/30/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">3,445,126</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-25</P>
             <P ALIGN="left"></P>
             <P ALIGN="right"><B>Debt Strategies Fund II, Inc., February 29,
               2000
             <BR>
             (in US dollars)</B></P>
             <P ALIGN="left"><B>SCHEDULE OF INVESTMENTS (continued)  </B> </P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P>&nbsp;</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD COLSPAN="6" VALIGN="BOTTOM"> <P><B></B></P>
               </TD>
               <TD COLSPAN="2" VALIGN="BOTTOM"> <P><B></B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P
                 ALIGN="center"><B>INDUSTRIES</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="center"><B>S&amp;P
               <BR>
               Ratings</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P ALIGN="center"><B>Moody's
               <BR>
               Ratings</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="center"><B>Face
               <BR>
               Amount</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%"> <DIV ALIGN="center"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P ALIGN="center"><B>Corporate
                 Debt Obligations</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%"> <DIV ALIGN="center">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P
                 ALIGN="center"><B>Value</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Chemicals</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">US$
                 4,175,707</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Koppers Industries, Inc.,
                 Term B, due 11/30/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%"> <P>$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,157,438</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B><I>(concluded)</I></B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ca</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,700,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>LaRoche Industries Inc.,
                 9.50% due 9/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">810,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,962,500</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Lyondell Petrochemical Co.,
                 Term E, due 5/17/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">5,094,954</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">18,381,318</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Computer-Related</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,225,983</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Bridge Information Systems,
                 Term B, due 5/29/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,072,204</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Products - 0.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Consumer</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Diamond Brands Inc., 12.875%
                 due 4/15/2009 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">500,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Products - 0.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,100,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Diamond Brands Operating,
                 10.125% due 4/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,470,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,225,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Evenflo Company Inc., 11.75%
                 due 8/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,188,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,325,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Home Products International
                 Inc., 9.625% due 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,192,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,350,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Diversified - 0.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,995,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Blount Inc., Term B, due
                 6/30/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">2,007,469</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Drilling - 3.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Cliffs Drilling, 10.25% due
                 5/15/2003</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,975,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,987,500</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Key Energy Services Inc.,
                 Term B, due 9/14/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,996,852</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Parker Drilling Co.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>5.50% due 8/01/2004
                 (Convertible)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,825,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,075,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>9.75% due 11/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">2,928,937</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>RBF Finance Company:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,100,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>11% due 3/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,149,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,200,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>11.375% due 3/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,452,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%" HEIGHT="14">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%" HEIGHT="14">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%" HEIGHT="14">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%" HEIGHT="14"> <DIV
                 ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%" HEIGHT="14">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%" HEIGHT="14">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%" HEIGHT="14">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%" HEIGHT="14">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%" HEIGHT="14"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">20,327,289</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Educational</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,325,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>La Petite Academy/LPA
                 Holdings, 10% due 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">874,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Services - 0.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">
                 <P><B>Electronics/Electrical</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,112,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Advanced Glassfiber Yarn,
                 9.875% due 1/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">3,783,040</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Components - 3.7%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Amkor Technologies Inc.,
                 9.25% due 5/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,455,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,053,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>BGF Industries Inc., 10.25%
                 due 1/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,878,495</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Chippac International, Term
                 B, due 7/31/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">999,375</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,970,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Dynamic Details, Term B, due
                 4/22/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,929,619</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,575,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Filtronic PLC, 10% due
                 12/01/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,523,812</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Flextronics International
                 Ltd., 8.75% due 10/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,058,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,214,286</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Viasystems, Revolving
                 Credit, due 11/30/2002**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,190,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">19,818,091</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%"> <P><B>Energy - 2.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">550,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Belden &amp; Blake Corp.,
                 9.875% due 6/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">275,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BBB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Chesapeake Energy Corp.,
                 9.625% due 5/01/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">945,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,275,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Continental Resources,
                 10.25% due 8/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,211,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,575,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Energy Corp. of America,
                 9.50% due 5/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,828,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Forest Oil Corporation,
                 10.50% due 1/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">2,777,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="17%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,850,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Gothic Production Corp.,
                 11.125% due 5/01/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,540,125</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-26 </P>
             <P><FONT
             SIZE="2"></FONT> </P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Nuevo Energy Company, 9.50% due
                 6/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,925,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,631,122</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Plain Scurlock, Term B, due
                 5/12/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,612,772</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">13,114,897</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Environmental</B></P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>URS Corporation**:</P>
               </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Services - 0.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">995,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Term B, due 6/09/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,003,084</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">995,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Term C, due 6/09/2007</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,003,084</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,006,168</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Financial</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Ares Leveraged Fund II, Junior
                 Subordinate Secured Note, due 10/31/2005 (c)(e)</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,723,700</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Services - 3.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,422,081</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Blackstone Capital, Term, due
                 11/30/2000**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,403,915</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Investcorp SA, Term, due 10/21/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">993,830</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Pennant CBO Limited, 13.43% due
                 3/14/2011 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">990,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Sovereign Bank, Term, due
                 11/17/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">5,021,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,378,830</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Wasserstein, Term, due 11/30/2000**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,360,988</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,150,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Willis Corroon Corporation, 9% due
                 2/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,520,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">17,014,308</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Food &amp; Kindred</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>B &amp; G Foods, Term B, due
                 3/15/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,245,938</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Products - 3.9%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">7,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Luigino's Inc., 10% due 2/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">6,150,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>SC International Services, Inc., 9.25%
                 due 9/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,840,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Specialty Foods, Inc.**:</P>
               </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,572,648</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Revolving Credit, due 1/31/2001</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,554,785</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">6,097,101</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Term, due 1/31/2001</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">6,112,343</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">20,903,066</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Forest Products - 0.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Ainsworth Lumber Company, 12.50% due
                 7/15/2007 (b)</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,155,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">650,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Millar Western Forest, 9.875% due
                 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">641,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>CCC-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Uniforet Inc., 11.125% due 10/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">450,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,246,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7" HEIGHT="22"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Furniture &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,425,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Formica Corporation, 10.875% due
                 3/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,031,125</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Fixtures - 0.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM"> <P><B>Gaming - 7.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Aladdin Gaming**:</P>
               </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Term B, due 8/26/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,782,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Term C, due 2/26/2008</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,173,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Ameristar Casinos, Inc., 10.50% due
                 8/01/2004</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,207,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,600,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Argosy Gaming Company, 10.75% due
                 6/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,644,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,650,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Coast Hotels &amp; Casino, 9.50% due
                 4/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,546,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Eldorado Resorts LLC, 10.50% due
                 8/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,500,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,465,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Harvey Casino Resorts, 10.625% due
                 6/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,587,787</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Hollywood Park Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,350,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>9.25% due 2/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,306,125</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,750,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>9.50% due 8/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">2,667,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">9,200,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Horseshoe Gaming LLC, 9.375% due
                 6/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">8,901,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">4,180,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Isle of Capri Casinos, 8.75% due
                 4/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">3,704,525</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,950,000</P>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <P>Trump Atlantic City Associates/Funding
                 Inc., 11.25% due 5/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">1,326,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM">&#160; </TD>
               <TD VALIGN="BOTTOM"> <P ALIGN="right">38,347,562</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="7"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <DIV ALIGN="center">F-27 </DIV>
             <H3></H3>
             <P ALIGN="right"></P>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD><B></B></TD>
               <TD><B></B></TD>
               <TD> <DIV ALIGN="right"><B>Debt Strategies Fund II, Inc.,
                 February 29, 2000 </B></DIV>
               </TD>
              </TR>
              <TR>
               <TD><B></B></TD>
               <TD><B></B></TD>
               <TD><B></B></TD>
              </TR>
              <TR>
               <TD><B>SCHEDULE OF INVESTMENTS
                 <I>(continued)</I>&nbsp;&nbsp;</B></TD>
               <TD><B></B></TD>
               <TD> <DIV ALIGN="right"><B>(in US dollars)</B></DIV>
               </TD>
              </TR>
             </TABLE>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"><B>INDUSTRIES</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"><B>S&amp;P
               <BR>
               Ratings</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"><B>Moody's
               <BR>
               Ratings</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV
                 ALIGN="right"><B>Face&nbsp;&nbsp;&nbsp;&nbsp;
               <BR>
               Amount</B></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"><B>Corporate Debt
                 Obligations</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"><B>Value</B></TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Grocery - 0.9%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">US$
                 5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Grand Union Co., Term, due
                 8/17/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%"> <P>$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,975,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Hotels &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">6,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Extended Stay America, 9.15%
                 due 3/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,355,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Motels - 5.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM" NOWRAP>
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Starwood Hotels &amp; Resorts
                 Trust, Term 2, due 2/23/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,011,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Wyndham International,
                 Term**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">6,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>due 6/30/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">6,415,702</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">13,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>due 6/30/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">13,147,502</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">27,929,454</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Industrial</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,750,000</P>
               </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM">
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;American Plumbing &amp;
                 Mechanic, 11.625% due 10/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,592,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Services - 0.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Building One Services,
                 10.50% due 5/01/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,610,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,202,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Leasing &amp;
                 Rental</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Anthony Crane Rental, Term,
                 due 7/24/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,659,374</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Services - 3.7%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Avis Rent A Car**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Term B, due 6/30/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,523,153</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Term C, due 6/30/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,525,375</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,930,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Coinmach Laundry Corp., Term
                 B, due 6/30/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,930,817</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">550,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>National Equipment Services,
                 10% due 11/30/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">530,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Neff Corp., 10.25% due
                 6/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">450,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">900,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Penhall International, 12%
                 due 8/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">904,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>United Rental, Term C, due
                 8/12/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,996,718</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Universal Hospital Services,
                 10.25% due 3/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">510,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">20,030,687</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Manufacturing -
                 4.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,950,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Environmental Systems, Term
                 B, due 9/30/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,714,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,478,000</P>
               </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM" NOWRAP>
                 <P>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fairfield Manufacturing
                 Company Inc., 9.625% due 10/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,254,980</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Metokote Corp., Term B, due
                 11/02/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,012,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>CCC-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ca</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Morris Materials Handling,
                 9.50% due 4/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">855,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,575,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Russell-Stanley Holding
                 Inc., 10.875% due 2/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,370,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,273,065</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Terex Corporation, Term B,
                 due 3/06/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,279,172</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>TransTechnology, Term, due
                 8/31/2009**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,432,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Westinghouse Air Brake,
                 9.375% due 6/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,940,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">25,859,277</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Medical</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Hudson Respiratory Care,
                 9.125% due 4/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,200,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Equipment - 0.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Metals &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>CCC-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,940,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>AEI Resources, Term B, due
                 12/31/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,609,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%"> <P><B>Mining - 4.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,922,857</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Acme Metals Inc., Term, due
                 12/01/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,551,654</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">795,594</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Asarco Incorporated, Term 2,
                 due 5/15/2001**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">794,102</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,050,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Bayou Steel Corp., 9.50% due
                 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">968,625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,625,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>GS Technologies Operating
                 Co., 12% due 9/01/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">910,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>D</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>C</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Geneva Steel, 9.50% due
                 1/15/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">950,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="19%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="9%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Golden Northwest Aluminum,
                 12% due 12/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,190,000</P>
               </TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <P ALIGN="center">F-28 </P>
             <P ALIGN="left"></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Great Central Mines Ltd.,
                 8.875% due 4/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">3,620,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,400,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Lodestar Holdings Inc.,
                 11.50% due 5/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">600,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,975,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Metal Management Inc., 10%
                 due 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,481,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>WHX Corp., 10.50% due
                 4/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,700,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">23,374,881</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="18%" ROWSPAN="2"> <P><B>Online
               <BR>
               </B><B>Services - 1.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,425,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>PSINet Inc., 11% due
                 8/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,428,562</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Splitrock Services Inc.,
                 11.75% due 7/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">3,195,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Verio Inc., 11.25% due
                 12/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,025,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">5,648,562</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Packaging - 1.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">850,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Consumers Packaging Inc.,
                 9.75% due 2/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">484,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Indesco International, 9.75%
                 due 4/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">340,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Packaging Corporation of
                 America, 9.625% due 4/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,500,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Spinnaker Industries Inc.,
                 10.75% due 10/15/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,200,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">5,524,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Paging - 0.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">325,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Metrocall Inc., 11% due
                 9/15/2008 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">269,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Paper - 4.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,550,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Norampac Inc., 9.50% due
                 2/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,537,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,975,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Pacifica Paper, Term B, due
                 12/31/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,999,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">6,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Repap New Brunswick, Inc.,
                 Term B, due 6/01/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">5,876,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>SD Warren Co., 12% due
                 12/15/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,150,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">5,801,556</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Stone Container Corporation,
                 Term E, due 10/01/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">5,824,971</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">23,388,346</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="18%" ROWSPAN="2"> <P><B>Petroleum
               <BR>
               </B><B>Refineries - 0.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Clark Refining &amp;
                 Marketing Inc., Term, due 11/15/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,250,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="18%" ROWSPAN="2"> <P><B>Pharmaceuticals
                 -</B><B>0.5%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Dade Behring Inc.**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,243,750</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Term B, due 6/30/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,247,082</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,243,750</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Term C, due 6/30/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,247,082</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,494,164</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="18%" ROWSPAN="2"> <P><B>Printing &amp;
               <BR>
               </B><B>Publishing - 0.3%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,050,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Premier Graphics Inc.,
                 11.50% due 12/01/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">472,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BBB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Baa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>World Color Press Inc.,
                 8.375% due 11/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">977,767</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,450,267</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="18%" ROWSPAN="2"> <P><B>Property
               <BR>
               </B><B>Management - 1.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>NRT Incorporated, Term, due
                 7/31/2004**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,987,814</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">675,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Prison Realty Trust Inc.,
                 12% due 6/01/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">648,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Rockefeller Center Property
                 Trust, 10.573% due 12/31/2000 (Convertible) (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,087,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">5,723,314</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P><B>Restaurants - 0.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Domino &amp; Bluefence**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Term B, due 12/21/2006</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,005,313</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">2,162,446</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Term C, due 12/21/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">2,174,417</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <P ALIGN="right">1,160,194</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%"> <P>Domino Pizza Funding Corp.,
                 Term B, due 12/21/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">1,166,358</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="12%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="12%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="40%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="14%"> <P ALIGN="right">4,346,088</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-29 </P>
             <P ALIGN="left"></P>
             <P ALIGN="right"><B>Debt Strategies Fund II, Inc., February 29,
               2000</B></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="32%" COLSPAN="5"><B>SCHEDULE OF
                 INVESTMENTS <I>(continued)</I></B></TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%" NOWRAP> <DIV
                 ALIGN="right"><B>(in US dollars)</B></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" COLSPAN="2">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%"><B>INDUSTRIES</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"><B>S&amp;P
               <BR>
               Ratings</B></TD>
               <TD VALIGN="BOTTOM" COLSPAN="2"><B>Moody's
               <BR>
               Ratings</B> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"><B>Face&nbsp;&nbsp;&nbsp;&nbsp;
               <BR>
               Amount</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"><B>Corporate Debt
                 Obligations</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"><B>Value</B></TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="9"> <HR NOSHADE SIZE="1"
                 ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="15%" ROWSPAN="2"> <P><B>Retail -
               <BR>
               </B><B>Specialty - 1.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P
                 ALIGN="right">US$3,960,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Asbury Automotive Group,
                 Senior Secured Note, due 3/31/2005**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">$3,910,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>TM Group Holdings, 11% due
                 5/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">1,980,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,890,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>United Auto Group, Inc., 11%
                 due 7/15/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">1,795,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">7,686,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="9"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P><B>Shipping - 0.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Enterprises Shipholding,
                 8.875% due 5/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">1,220,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="9"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="15%" ROWSPAN="2"> <P><B>Textile Mill
               <BR>
               </B><B>Products - 1.2%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Caa3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">6,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Galey &amp; Lord, Inc.,
                 9.125% due 3/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">2,015,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,150,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Globe Manufacturing Corp.,
                 10% due 8/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">483,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,968,049</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Joan Fabrics Corp., Term A,
                 due 6/30/2003**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">3,940,769</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">6,438,769</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="9"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
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                 Construction
               <BR>
               &amp;</B><B>Leasing - 1.8%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>American Tower Systems Co.,
                 Term B, due 12/30/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">5,038,540</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">650,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Crown Castle International
                 Corporation, 9% due 5/15/2011</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">614,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Spectracite, Term B, due
                 6/30/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">4,014,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">9,666,790</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="9"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="15%" ROWSPAN="2"> <P><B>Transportation
               <BR>
               </B><B>Services - 2.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Autopistas del Sol SA,
                 10.25% due 8/01/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">825,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P
                 ALIGN="right">&#163;3,199,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Eurotunnel, Tier 1 Tranche,
                 due 11/04/2007**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">4,144,371</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P
                 ALIGN="right">US$5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>MRS Logistica SA, 10.625%
                 due 8/15/2005 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">4,287,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,975,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Transportation
                 Manufacturing, Term B, due 6/15/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">5,002,984</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">14,259,855</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="9"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P><B>Utilities - 0.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Ba1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Monterrey Power, SA de CV,
                 9.625% due 11/15/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">2,447,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="9"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="15%" ROWSPAN="2"> <P><B>Waste
               <BR>
               </B><B>Management - 1.7%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>ISG Resources Inc., 10% due
                 4/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">2,231,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,590,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Norcal Waste Systems, 13.50%
                 due 11/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">4,830,975</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,525,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Safety-Kleen Corporation,
                 9.25% due 5/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">1,311,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">725,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Stericycle Inc., 12.375% due
                 11/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">741,312</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">9,115,037</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="9"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="15%" ROWSPAN="3"> <P><B>Wired
               <BR>
               </B><B>Telecommunications </B><B>12.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">2,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Call-Net Enterprises Inc.,
                 9.375% due 5/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">1,580,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,925,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Caprock Communications
                 Corporation, 11.50% due 5/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">3,983,875</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,275,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>E. Spire Communications,
                 10.521% due 7/01/2008 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">2,094,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,825,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Global Telesystems Group,
                 9.875% due 2/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">4,101,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Globenet Communications
                 Group Ltd., 13% due 7/15/2007 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">4,750,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">650,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Hermes Europe RailTel BV,
                 10.375% due 1/15/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">609,375</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Intermedia Communications
                 Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>9.046% due 7/15/2007 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">3,170,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">4,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>9.50% due 3/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">4,069,375</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">3,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Level 3 Communications Inc.,
                 9.125% due 5/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">2,941,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Metromedia Fiber Network,
                 10% due 11/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">982,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">1,400,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Netia Holdings II BV,
                 13.125% due 6/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">1,491,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Nextlink Communications,
                 9.45% due 4/15/2008 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">3,125,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="15%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="11%"> <P ALIGN="right">8,750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="45%"> <P>Pacific Crossing Ltd., Term
                 B, due 7/28/2006**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">8,553,125</P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-30 </P>
             <P ALIGN="left"></P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Primus Telecommunications
                 Group:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>11.75% due 8/01/2004</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">990,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,875,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>11.25% due 1/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,781,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>RSL Communications PLC:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>11.965% due 3/01/2008 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,627,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,950,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>9.875% due 11/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,628,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">6,129,032</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Teligent Inc., Term, due
                 7/01/2002**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">6,017,944</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Time-Warner Telecom LLC,
                 9.75% due 7/15/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">3,000,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>NR*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">700,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Versatel Telecom BV, 11.875%
                 due 7/15/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">714,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Viatel, Inc., 11.50% due
                 3/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">3,780,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Williams Communications
                 Group Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>10.70% due 10/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,541,250</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>10.875% due 10/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,530,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Worldwide Fiber Inc.:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,950,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>12.50% due 12/15/2005</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">2,042,625</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">700,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>12% due 8/01/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">728,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">66,832,319</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>Wireless</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">8,750,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>CTI Holdings SA, 11.316% due
                 4/15/2008 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">5,775,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">
                 <P><B>Telecommunications-</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Dolphin Telecom PLC (a):</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%"> <P><B>8.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">700,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>16.331% due 6/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">316,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,500,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>14% due 5/15/2009</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">630,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>ESAT Telecom Group PLC:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">2,225,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>12.427% due 2/01/2007 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">2,002,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">8,660,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>11.875% due 12/01/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">10,045,600</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,900,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Microcell
                 Telecommunications, 12% due 6/01/2009 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,239,750</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Nextel Communications,
                 Inc.**:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Term B, due 6/30/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">5,054,465</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>BB-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Ba2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">5,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Term C, due 12/31/2008</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">5,054,465</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B3</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,725,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Nextel Partners Inc., 14%
                 due 2/01/2009 (a)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">3,153,938</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B2</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">1,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>PTC International Finance II
                 SA, 11.25% due 12/01/2009 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">1,010,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Telesystem International
                 Wireless Inc. (a):</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">3,350,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>16.147% due 6/30/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">2,144,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>CCC+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>Caa1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">4,250,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>10.052% due 11/01/2007</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">2,337,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>VoiceStream Wireless
                 Corporation/VoiceStream Wireless Holding Company:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">725,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>10.375% due 11/15/2009
                 (c)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">749,469</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%"> <P>B+</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P>B1</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P ALIGN="right">7,000,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P>Term B, due 2/25/2009**</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">7,041,013</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">46,554,450</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="16%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="5%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="44%"> <P><B>Total Investments in
                 Corporate Debt Obligations (Cost - $722,242,901) -
                 124.4%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">669,621,742</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="8"> <HR NOSHADE
                 SIZE="1" ALIGN="left"> </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-31 </P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="86%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM" NOWRAP> <P
                 ALIGN="center"><B>Debt Strategies Fund II, Inc.,
               <BR>
               February 29, 2000
               <BR>
               <B>(in U.S. Dollars)</B></B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" COLSPAN="5">&#160; <B>SCHEDULE OF
                 INVESTMENTS (<I>concluded)</I></B></TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="2" VALIGN="BOTTOM">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P><B>Shares</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%"> <B>INDUSTRIES</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P><B>Held</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P><B>Stocks &amp;
                 Warrants</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P
                 ALIGN="center"><B>Value</B></P>
               </TD>
              </TR>
              <TR VALIGN="top">
               <TD COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%" HEIGHT="22"> <B>Broadcast -
                 Radio &amp;</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%" HEIGHT="22">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%" HEIGHT="22"> <P
                 ALIGN="right">8,850</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%" HEIGHT="22">&nbsp;</TD>
               <TD COLSPAN="2" VALIGN="BOTTOM" NOWRAP HEIGHT="22"> <P>Sirius
                 Satellite (Warrants) (c)(d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%" HEIGHT="22">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%" HEIGHT="22">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%" HEIGHT="22">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%" HEIGHT="22">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%" HEIGHT="22"> <P
                 ALIGN="right">$1,150,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%"> <B>Television - 0.2%</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%"> <B>Online Services -
                 0.1%</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">3,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P>Splitrock Services Inc.
                 (Warrants) (d)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">690,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%"> <B>Packaging - 0.6%</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">26,452</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="4" VALIGN="BOTTOM" NOWRAP> <P>Packaging Corporation
                 of America (Preferred) (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">3,088,312</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%"> <B>Tower Construction</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">6,025</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="4" VALIGN="BOTTOM" NOWRAP> <P>Crown Castle
                 International Corporation (Preferred) (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">6,205,363</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%"> <B>&amp; Leasing - 1.2%</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%"> <B>Wired</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">17,336</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%"> <P>Viatel, Inc.</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">976,234</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%" NOWRAP><B>Telecommunications -
                 0.2%</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%"> <B>Wireless</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">2,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P>Centaur Funding Corp.
                 (Preferred)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">2,049,376</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%"> <B>Telecommunications
                 -1.3%</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">4,804</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P>Dobson Communications
                 (Preferred) (b)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">5,212,303</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">7,261,679</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="11"> <TR>
               <TD VALIGN="BOTTOM" COLSPAN="11" NOWRAP> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3" NOWRAP>
                 <B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Investments in Stocks
                 &amp; Warrants</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" NOWRAP COLSPAN="2"> <P><B>(Cost -
                 $16,583,812)</B><B>- 3.6%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">19,372,088</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="center"><B>Face</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="29%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P><B>Amount</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P><B>Short-Term
                 Securities</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="29%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%"> <P><B>Commercial</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%"> <P>US$</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%"> <P ALIGN="right">634,000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="3" VALIGN="BOTTOM"> <P>Vastar Resources, 5.95% due
                 3/01/2000</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">634,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%"> <P><B>Paper*** - 0.1%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="4" VALIGN="BOTTOM"><B>Total Investments in
                 Short-Term Securities (Cost - $634,000) - 0.1%</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <DIV ALIGN="right">634,000</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="4" VALIGN="BOTTOM"><B>Total Investments (Cost -
                 $739,460,713) - 128.1%</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <DIV
                 ALIGN="right">689,627,830</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="4" VALIGN="BOTTOM"> <P><B>Unrealized Appreciation
                 on Forward Foreign</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="bottom" COLSPAN="3"> <B>Exchange Contracts - Net****
                 - 0.0%</B> </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <P ALIGN="right">74,339</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="4" VALIGN="BOTTOM"> <P><B>Liabilities in Excess of
                 Other Assets - (28.1%)</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%"> <P ALIGN="right">&nbsp;</P>
               </TD>
               <TD VALIGN="bottom" WIDTH="29%"> <DIV
                 ALIGN="right">(151,359,479)</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="4" VALIGN="BOTTOM">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%"> <P><B>Net Assets -
                 100.0%</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD COLSPAN="2" VALIGN="bottom"> <DIV
                 ALIGN="right">$538,342,690</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="22%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="6%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="23%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="7%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="4%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="2%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="29%"> <HR NOSHADE> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="11"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
             </TABLE>

             <TABLE WIDTH="100%" BORDER="0">
              <TR>
               <TD WIDTH="9%"><I>(a)</I></TD>
               <TD COLSPAN="5"><I>Represents a zero coupon or step bond; the
                 interest rate shown reflects the effective yield at the time
                 of purchase by the Fund.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="9%"><I>(b)</I></TD>
               <TD COLSPAN="5"><I>Represents a pay-in-kind security which may
                 pay interest/dividends in additional face/shares.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="9%"><I>(c)</I></TD>
               <TD COLSPAN="5"><I>The security may be offered and sold to
                 &quot;qualified institutional buyers&quot;under Rule 144A of
                 the Securities Act of 1933.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="9%"><I>(d)</I></TD>
               <TD COLSPAN="5"><I>Warrants entitle the Fund to purchase a
                 predetermined number of shares of common stock and are
                 non-income producing. The purchase price and number of shares
                 are subject to adjustment under certain conditions until the
                 expiration date.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="9%"><I>(e)</I></TD>
               <TD COLSPAN="5"><I>Floating rate note.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="9%"><I>* </I></TD>
               <TD COLSPAN="5"><I>Not Rated.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="9%"><I>***</I></TD>
               <TD COLSPAN="5"><I>Commercial Paper is traded on a discount
                 basis; the interest rate shown reflects the discount rate paid
                 at the time of purchase by the Fund.</I></TD>
              </TR>
              <TR>
               <TD WIDTH="9%"><I>****</I></TD>
               <TD COLSPAN="5"><I> Forward foreign exchange contracts as of
                 February 29, 2000 were as follows:</I></TD>
              </TR>
              <TR>
               <TD COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD COLSPAN="2"><I><B>Foreign Currency Sold</B></I></TD>
               <TD WIDTH="15%"> <DIV ALIGN="right"><I><B>Expiration
                 Date</B></I></DIV>
               </TD>
               <TD WIDTH="14%" NOWRAP><I></I></TD>
               <TD WIDTH="18%" NOWRAP> <DIV ALIGN="right"><I><B>Unrealized
                 Appreciation</B></I></DIV>
               </TD>
               <TD WIDTH="24%">&nbsp;</TD>
              </TR>
              <TR>
               <TD COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD COLSPAN="2"><I>(Euro)&nbsp;638,617</I></TD>
               <TD WIDTH="15%"> <DIV ALIGN="right"><I>March 2000</I></DIV>
               </TD>
               <TD WIDTH="14%"><I></I></TD>
               <TD WIDTH="18%"> <DIV ALIGN="right"><I>$15,786</I></DIV>
               </TD>
               <TD WIDTH="24%">&nbsp;</TD>
              </TR>
              <TR>
               <TD COLSPAN="2"><I>&#163; 2,760,621</I></TD>
               <TD WIDTH="15%"> <DIV ALIGN="right"><I>March 2000</I></DIV>
               </TD>
               <TD WIDTH="14%"><I></I></TD>
               <TD WIDTH="18%"> <DIV ALIGN="right"><I>58,553</I></DIV>
               </TD>
               <TD WIDTH="24%">&nbsp;</TD>
              </TR>
              <TR>
               <TD COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD COLSPAN="2"><I><B>Total Unrealized Appreciation on
                 Forward</B></I></TD>
               <TD WIDTH="15%"><I></I></TD>
               <TD WIDTH="14%"><I></I></TD>
               <TD WIDTH="18%"><I></I></TD>
               <TD WIDTH="24%">&nbsp;</TD>
              </TR>
              <TR>
               <TD COLSPAN="2"><I><B>Foreign Exchange Contracts -
                 Net</B></I></TD>
               <TD WIDTH="15%"><I></I></TD>
               <TD WIDTH="14%"><I></I></TD>
               <TD WIDTH="18%"><I></I></TD>
               <TD WIDTH="24%">&nbsp;</TD>
              </TR>
              <TR>
               <TD COLSPAN="2"><I><B>(US$ Commitment - $5,047,587)</B></I></TD>
               <TD WIDTH="15%">&nbsp;</TD>
               <TD WIDTH="14%">&nbsp;</TD>
               <TD WIDTH="18%"> <DIV ALIGN="right"><I>$74,339</I></DIV>
               </TD>
               <TD WIDTH="24%">&nbsp;</TD>
              </TR>
              <TR>
               <TD COLSPAN="2"><I></I></TD>
               <TD WIDTH="15%"><I></I></TD>
               <TD WIDTH="14%"><I></I></TD>
               <TD WIDTH="18%"> <HR NOSHADE> </TD>
               <TD WIDTH="24%">&nbsp;</TD>
              </TR>
             </TABLE>
             <HR NOSHADE SIZE="1"><DIV ALIGN="center">
             <BR>
             F-32 </DIV>

             <TABLE WIDTH="100%" BORDER="0">
              <TR>
               <TD VALIGN="top"><I>**</I></TD>
               <TD> <P><I>Floating or Variable Rate Corporate Debt - The
                 interest rates on floating or variable rate corporate debt are
                 subject to change periodically based on the change in the
                 prime rate of a US Bank, LIBOR (London Interbank Offered
                 Rate)or, in some cases, another base lending rate. Corporate
                 loans represent 50.4% of the Fund's net assets.</I></P>
               </TD>
               <TD>&nbsp;</TD>
              </TR>
              <TR>
               <TD><I>+</I></TD>
               <TD><I>Non-income producing security.</I></TD>
               <TD>&nbsp;</TD>
              </TR>
              <TR>
               <TD COLSPAN="2"><I>Ratings of issues shown have not been audited
                 by Deloitte &amp; Touche LLP.</I></TD>
               <TD>&nbsp;</TD>
              </TR>
             </TABLE>
             <P> See Notes to Financial Statements.</P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR NOWRAP>
               <TD VALIGN="BOTTOM" COLSPAN="5"> <P><B>STATEMENT OF ASSETS,
                 LIABILITIES AND CAPITAL</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%">&#160; <B>As of February 29,
                 2000</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="5"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Assets:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Investments, at value
                 (identified cost - $739,460,713)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P
                 ALIGN="right">$689,627,830</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Cash</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">49,209</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Unrealized appreciation on
                 forward foreign exchange contracts</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">74,339</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Receivables:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>&nbsp;&nbsp;Interest </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">$
                 13,253,517</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>&nbsp;&nbsp;Securities sold
                 </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">487,563</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>&nbsp;&nbsp;Dividends </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">233,364</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">13,974,444</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="56%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="13%"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Deferred facility fees</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,107</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Prepaid expenses </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">98,220</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="56%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Total assets</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">703,828,149</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%"></TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="5"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Liabilities:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Loans</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">161,000,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Payables:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right"> &#160;
                 </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>&nbsp;&nbsp;Interest on
                 loans </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">2,406,730</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>&nbsp;&nbsp;Dividends to
                 shareholders</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">1,122,672</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>&nbsp;&nbsp;Investment
                 adviser</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">265,844</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>&nbsp;&nbsp;Securities
                 purchased</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">260,821</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>&nbsp;&nbsp;Commitment
                 fees</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P ALIGN="right">9,078</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">4,065,145</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="56%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="13%"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Deferred income</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">50,633</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Accrued expenses</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">369,681</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="56%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Total liabilities</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">165,485,459</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%"></TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="5"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Net Assets:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Net assets</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P
                 ALIGN="right">$538,342,690</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="13%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="3%"></TD>
               <TD WIDTH="15%"> <HR NOSHADE> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="5"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%"> <P><B>Capital:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Common Stock, $.10 par
                 value, 200,000,000 shares authorized </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">$ 6,261,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Paid-in capital in excess of
                 par</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">619,266,581</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Undistributed investment
                 income - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P ALIGN="right">5,195,536</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Accumulated realized capital
                 losses on investments and foreign currency transactions -
                 net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P
                 ALIGN="right">(42,755,240)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>Unrealized depreciation on
                 investments and foreign currency transactions - net </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <P
                 ALIGN="right">(49,625,187)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="56%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD WIDTH="56%"> <P>Net Assets - Equivalent to $8.60 per share
                 based on
               <BR>
               62,610,000 shares of capital stock outstanding
               <BR>
               (market price - $7.1875)</P>
               </TD>
               <TD VALIGN="top" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD WIDTH="15%" VALIGN="bottom"> <P
                 ALIGN="right">$538,342,690</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="15%"> <HR NOSHADE SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="5"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="56%"> <P>See Notes to Financial
                 Statements.</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="3%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="15%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV ALIGN="center">
             <BR>
             <FONT
             SIZE="3">F-33</FONT> </DIV>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"><B>&#160; </B></TD>
               <TD COLSPAN="4" VALIGN="BOTTOM" HEIGHT="0" WIDTH="0"> <P
                 ALIGN="right"><B>Debt Strategies Fund II, Inc., February 29,
                 2000</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="5" HEIGHT="0" WIDTH="0">&nbsp; </TD>
              </TR>
              <TR NOWRAP>
               <TD VALIGN="BOTTOM" COLSPAN="5" HEIGHT="0"
                 WIDTH="0"><B>STATEMENT OF OPERATIONS </B></TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"><B>&#160; </B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"><B>&#160; </B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"><B>&#160; </B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P><B>For the Year
                 Ended February 29, 2000</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="5" HEIGHT="0" WIDTH="0"> <HR
                 NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P><B>Investment
                 Income:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Interest and
                 discount earned (net of $35,782 foreign withholding tax) </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P ALIGN="right">$
                 75,022,886</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Dividends</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">1,637,840</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Facility and other
                 fees</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">685,818</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="0" HEIGHT="0"> <HR NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Total income</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">77,346,544</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="0" HEIGHT="0"> <HR NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="5" HEIGHT="0" WIDTH="0"> <HR
                 NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P><B>Expenses:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Loan interest
                 expense</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" NOWRAP HEIGHT="0"> <P
                 ALIGN="right">$ 10,655,187</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Investment advisory
                 fees </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">4,459,855</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Professional
                 fees</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">206,308</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Accounting services
                 </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">122,348</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Listing fees </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">94,061</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Transfer agent
                 fees</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">85,477</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Custodian fees </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">60,588</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Printing and
                 shareholder reports </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">51,924</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Organization
                 expenses</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">42,833</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Directors' fees and
                 expenses</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">27,003</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Pricing services</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">15,471</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Other</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">66,848</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="0" HEIGHT="0"> <HR NOSHADE SIZE="1">
                 </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Total expenses </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">16,143,487</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="0" HEIGHT="0"> <HR NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Investment income -
                 net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">61,203,057</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="0" HEIGHT="0"> <HR NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="5" HEIGHT="0" WIDTH="0"> <HR
                 NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P><B>Realized
                 &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Realized gain
                 (loss) from:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P><B>Unrealized Gain
                 (Loss)</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Investments -
                 net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">(29,321,429)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P><B>On Investments
                 &amp;</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">&nbsp;</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"><B>Foreign
                 Currency</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">Foreign currency
                 transactions - net</TD>
               <TD VALIGN="bottom" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">137,183 </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">(29,184,246) </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="7">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="7">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="7"> <HR NOSHADE SIZE="1">
                 </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="7">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="7">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Change in
                 unrealized appreciation/depreciation on:</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P><B>Transactions -
                 Net:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Investments -
                 net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">(6,155,982)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>Foreign currency
                 transactions - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">(92,194)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P
                 ALIGN="right">(6,248,176)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="0" HEIGHT="0"> <HR NOSHADE SIZE="1">
                 </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="0" HEIGHT="0"> <HR NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P><B>Net Increase in
                 Net Assets Resulting from Operations</B> </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P ALIGN="right">$
                 25,770,635</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="0" HEIGHT="0"> <DIV ALIGN="right"> <HR
                 NOSHADE SIZE="2"> &#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" COLSPAN="5" HEIGHT="0"> <HR
                 NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <P>See Notes to
                 Financial Statements.</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0" HEIGHT="0"> <DIV
                 ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV ALIGN="center">
             <BR>
             F-34 </DIV>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="3">&#160; <B>STATEMENT OF CHANGES
                 IN NET ASSETS</B> </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <B><I>Increase (Decrease) in
                 Net Assets: </I></B></TD>
               <TD VALIGN="BOTTOM" WIDTH="8%" NOWRAP> <DIV
                 ALIGN="center"><B>For the
               <BR>
               Year Ended
               <BR>
               February 29, 2000 </B></DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%" NOWRAP> <P ALIGN="center"><B>For
                 the Period
               <BR>
               March 27, 1998</B>+
               <BR>
               <B>to February 28, 1999</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P><B>Operations:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P>Investment income - net</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P ALIGN="right">$ 61,203,057</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P ALIGN="right">$
                 47,590,151</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">Realized loss on investments and
                 foreign currency transactions - net</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <DIV
                 ALIGN="right">(29,184,246)</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <DIV
                 ALIGN="right">(13,489,541)</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">Change in unrealized
                 appreciation/depreciation on investments and foreign currency
                 transactions - net</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <DIV
                 ALIGN="right">(6,248,176)</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <DIV
                 ALIGN="right">(43,377,011)</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="0%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"></TD>
               <TD WIDTH="8%" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%"></TD>
               <TD WIDTH="18%" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P>Net increase (decrease) in
                 net assets resulting from operations </P>
               </TD>
               <TD VALIGN="bottom" WIDTH="8%"> <DIV
                 ALIGN="right">25,770,635</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="bottom" WIDTH="18%"> <DIV
                 ALIGN="right">(9,276,401)</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="100%" COLSPAN="6"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"><B>Dividends to
                 Shareholders:</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">Dividends to shareholders from
                 investment
               <BR>
               income - net </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <DIV
                 ALIGN="right">(60,330,046)</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <DIV
                 ALIGN="right">(43,349,079)</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="8%"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="18%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P><B>Capital Share
               <BR>
               Transactions:</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P>Proceeds from issuance of
                 Common Stock</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P ALIGN="right">-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P ALIGN="right">626,000,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <P>&nbsp;</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P>Offering costs resulting
                 from the issuance of Common Stock</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P ALIGN="right">-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P ALIGN="right">(572,419)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="8%"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="18%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P>Net increase in net assets
                 resulting from capital share transactions</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P ALIGN="right">-</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P ALIGN="right">625,427,581</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">&#160; </TD>
               <TD VALIGN="top" WIDTH="8%"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%"></TD>
               <TD VALIGN="top" WIDTH="18%"> <HR NOSHADE SIZE="1"
                 ALIGN="right"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"><B>Net Assets:</B></TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">Total increase (decrease) in net
                 assets</TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <DIV
                 ALIGN="right">(34,559,411)</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%"></TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <DIV
                 ALIGN="right">572,802,101</DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P>Beginning of period</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P ALIGN="right">572,902,101</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P ALIGN="right">100,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="8%"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="18%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P>End of period*</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P ALIGN="right">$538,342,690</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P
                 ALIGN="right">$572,902,101</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">&#160; </TD>
               <TD VALIGN="top" WIDTH="8%"> <HR NOSHADE SIZE="2"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="18%"> <HR NOSHADE SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160;
                 *</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P> <I>Undistributed investment
                 income - net</I></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <P ALIGN="right"><I>$
                 5,195,536</I></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <P ALIGN="right"><I>$
                 4,159,105</I></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%">&#160; </TD>
               <TD VALIGN="top" WIDTH="8%"> <HR NOSHADE SIZE="2"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="top" WIDTH="18%"> <HR NOSHADE SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%"> <DIV ALIGN="right">&#160;
                 +</DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P><I>Commencement of
                 operations.</I></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="10%">&#160; </TD>
               <TD VALIGN="BOTTOM" WIDTH="0%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="63%"> <P>See Notes to Financial
                 Statements.</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="8%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="1%">&nbsp;</TD>
               <TD VALIGN="BOTTOM" WIDTH="18%"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV ALIGN="center">
             <BR>
             <FONT
             FACE="Times New Roman, Times, serif">F-35</FONT> </DIV>
             <P>
             <TABLE WIDTH="100%">
              <TR>
               <TD WIDTH="198"></TD>
               <TD WIDTH="477"></TD>
               <TD WIDTH="104"></TD>
               <TD WIDTH="11"></TD>
               <TD WIDTH="129"></TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"><B>&#160; </B></TD>
               <TD COLSPAN="4" VALIGN="TOP"> <P ALIGN="right"><B>Debt
                 Strategies Fund II, Inc., February 29, 2000</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"><B>&#160; </B></TD>
               <TD VALIGN="TOP" WIDTH="477"><B>&#160; </B></TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" COLSPAN="5"><B>&#160; STATEMENT OF CASH FLOWS
                 &#160; &#160; </B></TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"><B>&#160; </B></TD>
               <TD VALIGN="TOP" WIDTH="477"><B>&#160; </B></TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"><B>&#160; </B></TD>
               <TD VALIGN="TOP" WIDTH="477"> <P><B>For the Year Ended February
                 29, 2000</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129">&#160; </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" COLSPAN="5"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Cash Provided by</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Net increase in net assets
                 resulting from operations</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11"> <P ALIGN="right">&nbsp;</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">$25,770,635</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198" NOWRAP> <P><B>Operating
                 Activities:</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Adjustments to reconcile net
                 increase in net assets resulting from</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>operations to net cash provided
                 by operating activities:</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198" HEIGHT="23">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477" HEIGHT="23">
                 <P>&nbsp;&nbsp;Increase in receivables </P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104" HEIGHT="23">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11" HEIGHT="23">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129" HEIGHT="23"> <P
                 ALIGN="right">(1,963,930)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>&nbsp;&nbsp;Decrease in other
                 assets</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">54,261</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>&nbsp;&nbsp;Increase in other
                 liabilities.</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">1,243,487</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477" NOWRAP> &nbsp;&nbsp;Realized and
                 unrealized loss on investments and foreign currency
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;transactions - net </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">35,432,422</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>&nbsp;&nbsp;Amortization of
                 discount </P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(9,273,659)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="477">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Net cash provided by operating
                 activities </P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">51,263,216</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" COLSPAN="5"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Cash Used for</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Proceeds from sales of
                 long-term investments</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">450,152,458</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Investing Activities:</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Purchases of long-term
                 investments</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(460,073,831)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Purchases of short-term
                 investments </P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(186,278,653)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Proceeds from sales and
                 maturities of short-term investments </P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">186,224,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="477">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Net cash used for investing
                 activities</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(9,976,026)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" COLSPAN="5"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Cash Used for</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Cash receipts from borrowings
                 </P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">330,000,000</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Financing Activities:</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Cash payments on borrowings</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(311,000,000)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Dividends paid to
                 shareholders</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(60,520,118)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="477">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Net cash used for financing
                 activities</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(41,520,118)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Cash:</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Net decrease in cash</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(232,928)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Cash at beginning of year</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">282,137</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Cash at end of year</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11"> <P ALIGN="right">&nbsp;</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">$49,209</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="2"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198" HEIGHT="22"> <P><B>Cash Flow</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477" HEIGHT="22"> <P>Cash paid for
                 interest </P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104" HEIGHT="22">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11" HEIGHT="22"> <P
                 ALIGN="right">&nbsp;</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="129" HEIGHT="22"> <P
                 ALIGN="right">$9,305,212</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Information:</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <DIV ALIGN="right"> <HR NOSHADE
                 SIZE="2"> &#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" COLSPAN="5"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="477">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129">&nbsp;</TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>See Notes to Financial
                 Statements.</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198" NOWRAP> <B>FINANCIAL
                 HIGHLIGHTS</B></TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <DIV ALIGN="right">&#160; </DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P><B>The following per share data
                 and ratios have been derived
               <BR>
               from information provided in the financial statements.</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="11">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">&nbsp;</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD WIDTH="477" VALIGN="bottom"> <P><B><I>Increase ( Decrease )
                 in Net Asset Value:</I></B></P>
               </TD>
               <TD WIDTH="104" VALIGN="bottom"> <DIV ALIGN="center"><B>For
                 the</B>
               <BR>
               <B>Year Ended
               <BR>
               February 29, 2000</B></DIV>
               </TD>
               <TD WIDTH="11" VALIGN="bottom"> <DIV ALIGN="center"></DIV>
               </TD>
               <TD WIDTH="129" VALIGN="bottom"> <DIV ALIGN="center"><B>For the
                 Period
               <BR>
               March 27, <B>1998+
               <BR>
               </B>to February, 28</B>&#160;
               <BR>
               <B> </B> <B>1999</B></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" COLSPAN="5"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Per Share Operating</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Net asset value, beginning of
                 period <B> </B></P>
               </TD>
               <TD VALIGN="bottom" WIDTH="104"> <DIV ALIGN="right">&#160; $
                 9.15</DIV>
               </TD>
               <TD VALIGN="bottom" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="bottom" WIDTH="129"> <P ALIGN="right">$ 10.00</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198"> <P><B>Performance:</B></P>
               </TD>
               <TD VALIGN="TOP" WIDTH="477">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="104"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Investment income - net</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104"> <DIV ALIGN="right">&#160; .97</DIV>
               </TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">.76</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Realized and unrealized loss on
                 investments and foreign currency
               <BR>
               &nbsp;&nbsp; transactions - net </P>
               </TD>
               <TD VALIGN="bottom" WIDTH="104"> <DIV ALIGN="right">&#160;
                 (.56)</DIV>
               </TD>
               <TD VALIGN="bottom" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="bottom" WIDTH="129"> <P ALIGN="right">(.91)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="477">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="104"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Total from investment
                 operations</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104"> <DIV ALIGN="right">&#160; .41</DIV>
               </TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(.15)</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="477">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="104"> <HR NOSHADE SIZE="1"> </TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="TOP" WIDTH="198">&#160; </TD>
               <TD VALIGN="TOP" WIDTH="477"> <P>Less dividends from investment
                 income - net</P>
               </TD>
               <TD VALIGN="TOP" WIDTH="104"> <DIV ALIGN="right">&#160;
                 (.96)</DIV>
               </TD>
               <TD VALIGN="TOP" WIDTH="11">&nbsp;</TD>
               <TD VALIGN="TOP" WIDTH="129"> <P ALIGN="right">(.69)</P>
               </TD>
              </TR>
             </TABLE>
             <DIV ALIGN="center">
             <BR>
             F-36</DIV>
             <P>&nbsp; </P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="2" WIDTH="100%">
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Capital charge resulting from
                 the issuance of Common Stock </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>-</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>(.01)</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Net asset value, end of period
                 </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>8.60</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>9.15</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Market price per share, end of
                 period</P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>7.1875</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>7.875</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD VALIGN="top" COLSPAN="6"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> <P><B>Total Investment </B></P>
               </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Based on market price per
                 share</P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>3.19%</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>(14.87%)++</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top" HEIGHT="27"><B>Return:**</B></TD>
               <TD WIDTH="60%" VALIGN="top" HEIGHT="27">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top" HEIGHT="27">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top" HEIGHT="27"> <HR
                 NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top" HEIGHT="27">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top" HEIGHT="27"> <HR
                 NOSHADE ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Based on net asset value per
                 share</P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>6.26%</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>(1.09%)++</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD VALIGN="top" COLSPAN="6"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> <P><B>Ratios to Average</B></P>
               </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Expenses, net of reimbursement
                 and excluding interest expense </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>.98%</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>.54%*</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> <P><B>Net Assets:</B></P>
               </TD>
               <TD WIDTH="60%" VALIGN="top"> </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Expenses, net of reimbursement
                 </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>2.87%</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>.93%*</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Expenses </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>2.87%</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>1.20%*</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Investment income - net </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>10.88%</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>8.60%*</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" VALIGN="top" COLSPAN="6"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> <P><B>Leverage:</B></P>
               </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Amount of borrowings, end of
                 period (in thousands) </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>161,000</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>142,000</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Average amount of borrowings
                 outstanding during the period (in thousands) </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>182,404</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>42,330</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Average amount of borrowings
                 outstanding per share during the period </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>2.91</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>.69</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" VALIGN="top" COLSPAN="6"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> <P><B>Supplemental</B></P>
               </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Net assets, end of period (in
                 thousands)</P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>538,343</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> <P>$</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>572,902</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> <P><B>Data:</B></P>
               </TD>
               <TD WIDTH="60%" VALIGN="top"> </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"> </TD>
               <TD WIDTH="60%" VALIGN="top"> <P>Portfolio turnover </P>
               </TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>61.76%</P>
               </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"> </TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <P>89.76%</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"></TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"></TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"></TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="2"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" VALIGN="top" HEIGHT="21" COLSPAN="6"> <HR
                 NOSHADE ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="16%" VALIGN="top"></TD>
               <TD WIDTH="60%" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="right" VALIGN="top"></TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="3%" ALIGN="right" VALIGN="top"></TD>
               <TD WIDTH="10%" ALIGN="right" VALIGN="top">&nbsp;</TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" VALIGN="top" COLSPAN="6"></TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" VALIGN="top" COLSPAN="6"></TD>
              </TR>
             </TABLE>
             <P> * <I>&nbsp;&nbsp;&nbsp;Annualized.</I></P>
             <P>** <I>Total investment returns based on market value, which can
               be significantly greater or lesser than the net asset value, may
               result in substantially different </I><I>returns. Total
               investment returns exclude the effects of sales charges.</I></P>
             <P>+<I>&nbsp;&nbsp;Commencement of operations.</I></P>
             <P>++&nbsp;&nbsp;<I>Aggregate total investment return.</I></P>
             <P> See Notes to Financial Statements.</P>
             <P><B>NOTES TO FINANCIAL STATEMENTS</B></P>
             <P><B>1. Significant Accounting Policies:</B></P>
             <P>Debt Strategies Fund II, Inc. (the &quot;Fund&quot;) is
               registered under the Investment Company Act of 1940 as a
               diversified, closed-end management investment company. The
               Fund's financial statements are prepared in accordance with
               generally accepted accounting principles, which may require the
               use of management accruals and estimates. The Fund determines
               and makes available for publication the net asset value of its
               Common Stock on a weekly basis. The Fund's Common Stock is
               listed on the New York Stock Exchange under the symbol DSU.</P>
             <P><I>(a) Corporate debt obligations </I>- The Fund invests
               principally in debt obligations of companies, including
               corporate loans made by banks and other financial institutions
               and both privately and publicly offered corporate bonds and
               notes. Because agents and intermediaries are primarily
               commercial banks, the Fund's investment in corporate loans could
               be considered concentrated in financial institutions.</P>
             <P><I>(b) Valuation of investments </I>- Corporate Loans are
               valued in accordance with guidelines established by the Board of
               Directors. Until July 9, 1999, Corporate Loans for which an
               active secondary market exists and for which the Investment
               Adviser can obtain at least two quotations from banks or dealers
               in Corporate Loans were valued by calculating the mean of the
               last bid and asked prices in the markets for such Corporate
               Loans, and then using the mean of those two means. If only one
               quote for a particular Corporate Loan was available, such
               Corporate Loan was valued on the basis of the mean of the last
               available bid and asked prices in the market. As of July 12,
               1999, pursuant to the approval of the Board of Directors, the
               Corporate Loans are valued at the mean between the last </P>
             <P ALIGN="center">F-37</P>
             <P ALIGN="right"><B>Debt Strategies Fund II, Inc., February 29,
               2000</B></P>
             <P><B>NOTES TO FINANCIAL STATEMENTS <I>(continued) </I></B></P>
             <P>available bid and asked prices from one or more brokers or
               dealers as obtained from Loan Pricing Corporation. For Corporate
               Loans for which an active secondary market does not exist to a
               reliable degree in the opinion of the Investment Adviser, such
               Corporate Loans will be valued by the Investment Adviser at fair
               value, which is intended to approximate market value.</P>
             <P>Other portfolio securities may be valued on the basis of prices
               furnished by one or more pricing services, which determines
               prices for normal, institutional-size trading units of such
               securities using market information, transactions for comparable
               securities and various relationships between securities that are
               generally recognized by institutional traders. In certain
               circumstances, portfolio securities are valued at the last sale
               price on the exchange that is the primary market for such
               securities, or the last quoted bid price for those securities
               for which the over-the-counter market is the primary market or
               for listed securities in which there were no sales during the
               day. The value of interest rate swaps, caps, and floors is
               determined in accordance with a formula and then confirmed
               periodically by obtaining a bank quotation. Options written or
               purchased are valued at the last sale price in the case of
               exchange-traded options. In the case of options traded in the
               over-the-counter market, valuation is the last asked price
               (options written) or the last bid price (options purchased).
               Short-term securities with remaining maturities of sixty days or
               less are valued at amortized cost, which approximates market
               value. Securities and assets for which market price quotations
               are not readily available are valued at fair value as determined
               in good faith by or under the direction of the Board of
               Directors of the Fund.</P>
             <P><I>(c) Derivative financial instruments </I>- The Fund may
               engage in various portfolio strategies to seek to increase its
               return by hedging its portfolio against adverse movements in the
               debt and currency markets. Losses may arise due to changes in
               the value of the contract or if the counterparty does not
               perform under the contract.</P>
             <P>&#183; <I>Financial futures contracts </I>- The Fund may
               purchase or sell financial futures contracts and options on such
               futures contracts for the purpose of hedging the market risk on
               existing securities or the intended purchase of securities.
               Futures contracts are contracts for delayed delivery of
               securities at a specific future date and at a specific price or
               yield. Upon entering into a contract, the Fund deposits and
               maintains as collateral such initial margin as required by the
               exchange on which the transaction is effected. Pursuant to the
               contract, the Fund agrees to receive from or pay to the broker
               an amount of cash equal to the daily fluctuation in value of the
               contract. Such receipts or payments are known as variation
               margin and are recorded by the Fund as unrealized gains or
               losses. When the contract is closed, the Fund records a realized
               gain or loss equal to the difference between the value of the
               contract at the time it was opened and the value at the time it
               was closed.</P>
             <P>&#183; <I>Forward foreign exchange contracts </I>- The Fund is
               authorized to enter into forward foreign exchange contracts as a
               hedge against either specific transactions or portfolio
               positions. Such contracts are not entered on the Fund's records.
               However, the effect on operations is recorded from the date the
               Fund enters into such contracts.</P>
             <P>&#183; <I>Options </I>- The Fund is authorized to write covered
               call and put options and purchase call and put options. When the
               Fund writes an option, an amount equal to the premium received
               by the Fund is reflected as an asset and an equivalent
               liability. The amount of the liability is subsequently marked to
               market to reflect the current market value of the option
               written. When a security is purchased or sold through an
               exercise of an option, the related premium paid (or received) is
               added to (or deducted from) the basis of the security acquired
               or deducted from (or added to) the proceeds of the security
               sold. When an option expires (or the Fund enters into a closing
               transaction), the Fund realizes a gain or loss on the option to
               the extent of the premiums received or paid (or gain or loss to
               the extent the cost of the closing transaction exceeds the
               premium paid or received).</P>
             <P>Written and purchased options are non-income producing
               investments.</P>
             <P><I>&#183; Interest rate transactions </I>- The Fund is
               authorized to enter into interest rate swaps and purchase or
               sell interest rate caps and floors. In an interest rate swap,
               the Fund exchanges with another party their respective
               commitments to pay or </P>
             <P ALIGN="center">F-38</P>
             <H3>&nbsp;</H3>
             <P> receive interest on a specified notional principal amount. The
               purchase of an interest rate cap (or floor) entitles the
               purchaser, to the extent that a specified index exceeds (or
               falls below) a predetermined interest rate, to receive payments
               of interest equal to the difference between the index and the
               predetermined rate on a notional principal amount from the party
               selling such interest rate cap or floor).</P>
             <P><I>(d) Foreign currency transactions </I>- Transactions
               denominated in foreign currencies are recorded at the exchange
               rate prevailing when recognized. Assets and liabilities
               denominated in foreign currencies are valued at the exchange
               rate at the end of the period. Foreign currency transactions are
               the result of settling (realized) or valuing (unrealized) assets
               or liabilities expressed in foreign currencies into US dollars.
               Realized and unrealized gains or losses from investments include
               the effects of foreign exchange rates on investments.</P>
             <P><I>(e) Income taxes</I> - It is the Fund's policy to comply
               with the requirements of the Internal Revenue Code applicable to
               regulated investment companies and to distribute substantially
               all of its taxable income to its shareholders. Therefore, no
               Federal income tax provision is required. Under the applicable
               foreign tax law, a withholding tax may be imposed on interest,
               dividends and capital gains at various rates.</P>
             <P><I>(f) Security transactions and investment income </I>-
               Security transactions are recorded on the dates the transactions
               are entered into (the trade dates). Dividend income is recorded
               on the ex-dividend dates. Interest income (including
               amortization of discount) is recognized on the accrual basis.
               Realized gains and losses on security transactions are
               determined on the identified cost basis. Facility fees are
               accreted to income over the term of the related loan.</P>
             <P><I>(g) Organization expenses </I>- In accordance with Statement
               of Position 98-5, unamortized organization expenses of $42,833
               were expensed during the year ended February 29, 2000. This was
               considered to be a change in accounting principle and had no
               material impact on the operations of the Fund.</P>
             <P><I>(h) Dividends and distributions</I> - Dividends from net
               investment income are declared and paid monthly. Distributions
               of capital gains are recorded on the ex-dividend dates.</P>
             <P><I>(i) Reclassification</I> - Generally accepted accounting
               principles require that certain components of net assets be
               adjusted to reflect permanent differences between financial and
               tax reporting. Accordingly, current year's permanent book/tax
               differences of $163,420 have been reclassified between
               undistributed net investment income and accumulated net realized
               capital losses. These reclassifications have no effect on net
               assets or net asset value per share.</P>
             <P><B>2. &nbsp;Investment Advisory Agreement and Transactions with
               Affiliates:</B></P>
             <P>The Fund has entered into an Investment Advisory Agreement with
               Fund Asset Management, L.P. (&quot;FAM&quot;). The general
               partner of FAM is Princeton Services, Inc. (&quot;PSI&quot;), an
               indirect wholly-owned subsidiary of Merrill Lynch &amp; Co.,
               Inc. (&quot;ML &amp; Co.&quot;), which is the limited
               partner.</P>
             <P>FAM is responsible for the management of the Fund's portfolio
               and provides the necessary personnel, facilities, equipment and
               certain other services necessary to perform the investment
               advisory function. For such services the Fund pays a monthly fee
               at an annual rate of .60% of the Fund's average weekly net
               assets plus the proceeds of any outstanding borrowings used for
               leverage.</P>
             <P>For the year ended February 29, 2000, the Fund paid Merrill
               Lynch Security Pricing Service, an affiliate of Merrill Lynch,
               Pierce, Fenner &amp; Smith Incorporated
               (&quot;MLPF&amp;S&quot;), $380 for security price quotations to
               compute the net asset value of the Fund.</P>
             <P>Accounting services are provided to the Fund by FAM at cost.
               </P>
             <P>Certain officers and/or directors of the Fund are officers
               and/or directors of FAM, PSI, and/or ML &amp; Co.</P>
             <P><B>3.&nbsp; Investments:</B></P>
             <P>Purchases and sales of investments, excluding short-term
               securities, for the year ended February 29, 2000 were
               $454,974,089 and $450,640,021, respectively.</P>
             <P>Net realized gains (losses) for the year ended February 29,
               2000 and net unrealized gains (losses) as of February 29, 2000
               were as follows:</P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="620">
              <TR VALIGN="bottom">
               <TD WIDTH="100%" COLSPAN="4"></TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" COLSPAN="4"></TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" COLSPAN="4"></TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" COLSPAN="4"></TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" HEIGHT="25" COLSPAN="4"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%"> </TD>
               <TD WIDTH="15%" ALIGN="center"> <P><B>Realized</B></P>
               </TD>
               <TD WIDTH="10%" ALIGN="center">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="center"> <P><B>Unrealized</B></P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%"> </TD>
               <TD WIDTH="15%" ALIGN="center"> <P><B>Gains (Losses)</B></P>
               </TD>
               <TD WIDTH="10%" ALIGN="center">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="center"> <P><B>Gains (Losses)</B></P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" COLSPAN="4"></TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" COLSPAN="4"></TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="100%" COLSPAN="4"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%"> <P>Long-term investments</P>
               </TD>
               <TD WIDTH="15%" ALIGN="right"> <P>$(29,321,429)</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <P>$(49,832,883)</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%"> <P>Unfunded corporate loans </P>
               </TD>
               <TD WIDTH="15%" ALIGN="right"> <P>&#151;</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <P>133,974</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%"> <P>Forward foreign exchange contracts</P>
               </TD>
               <TD WIDTH="15%" ALIGN="right"> <P>199,438</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <P>74,339</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%"> <P>Foreign currency transactions </P>
               </TD>
               <TD WIDTH="15%" ALIGN="right"> <P>(62,255)</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <P>(617)</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD WIDTH="10%" ALIGN="right">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%"> <P>Total</P>
               </TD>
               <TD WIDTH="15%" ALIGN="right"> <P>$(29,184,246)</P>
               </TD>
               <TD WIDTH="10%" ALIGN="right">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <P>$(49,625,187)</P>
               </TD>
              </TR>
              <TR VALIGN="bottom">
               <TD WIDTH="56%">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="2"> </TD>
               <TD WIDTH="10%" ALIGN="right">&nbsp;</TD>
               <TD WIDTH="15%" ALIGN="right"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="2"> </TD>
              </TR>
             </TABLE>
             <P>As of February 29, 2000, net unrealized depreciation for
               Federal income tax purposes aggregated $50,156,118, of </P>
             <P ALIGN="center">F-39</P>
             <P ALIGN="right"><B>Debt Strategies Fund II, Inc., February 29,
               2000</B></P>
             <P><B>NOTES TO FINANCIAL STATEMENTS <I>(concluded) </I></B></P>
             <P>which $8,634,497 related to appreciated securities and
               $58,790,615 related to depreciated securities. The aggregate
               cost of investments at February 29, 2000 for Federal income tax
               purposes was $739,783,948.</P>
             <P><B>4. &nbsp;Capital Stock Transactions:</B></P>
             <P>The Fund is authorized to issue 200,000,000 shares of Common
               Stock, par value $.10 per share. Shares issued and outstanding
               during the year ended February 29, 2000 remained constant and
               during the period March 27, 1998 to February 28, 1999 increased
               by 62,600,000 from shares sold.</P>
             <P><B>5.&nbsp; Unfunded Loan Interests:</B></P>
             <P>As of February 29, 2000, the Fund had unfunded loan commitments
               of approximately $1,595,000, which would be extended at the
               option of the borrower, pursuant to the following loan
               agreements:</P>
             <P>
             <TABLE BORDER="0" CELLSPACING="0" CELLPADDING="0" WIDTH="100%">
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="2"></TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="2"></TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="87%"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%" ALIGN="center">
                 <P><B>Unfunded</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="87%"> </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%" ALIGN="center">
                 <P><B>Commitment</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="87%"> <P><B>Borrower</B></P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%" ALIGN="center" NOWRAP> <P><B>(in
                 Thousands)</B></P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="87%"> <P>Breed Technologies Inc. </P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%" ALIGN="right"> <P>$ 15</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="87%"> <P>Metro-Goldwyn-Mayer Inc.
                 (MGM)</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%" ALIGN="right"> <P>1,500</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" WIDTH="87%"> <P>Specialty Foods, Inc.</P>
               </TD>
               <TD VALIGN="BOTTOM" WIDTH="13%" ALIGN="right"> <P>80</P>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="BOTTOM" COLSPAN="2"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P><B>6. &nbsp;Short-Term Borrowings:</B></P>
             <P>On July 14, 1999, the Fund extended its one-year credit
               agreement with The Bank of New York and Harris Trust and Saving
               Bank. The agreement is a $225,000,000 credit facility bearing
               interest at the Prime rate, the Federal Funds rate plus .55%
               and/or Eurodollar plus .55%. For the year ended February 29,
               2000, the average amount borrowed was approximately $182,404,000
               and the daily weighted average interest rate was 5.84%. For the
               year ended February 29, 2000, facility and commitment fees
               aggregated approximately $256,000.</P>
             <P><B>7. &nbsp;Capital Loss Carryforward:</B></P>
             <P>At February 29, 2000, the Fund had a net capital loss
               carry-forward of approximately $29,650,000, of which $5,992,000
               expires in 2007 and $23,658,000 expires in 2008. This amount
               will be available to offset like amounts of any future taxable
               gains.</P>
             <P><B>8. &nbsp;Subsequent Event:</B></P>
             <P>On March 7, 2000, the Fund's Board of Directors declared an
               ordinary income dividend to Common Stock shareholders in the
               amount of $.080372 per share, payable on March 31, 2000 to
               shareholders of record as of March 17, 2000.</P>
             <P ALIGN="center">F-40</P>
             <P ALIGN="center"><FONT
             SIZE="2"></FONT>[This page is intentionally left blank.]</P>
             <P ALIGN="center">F-41</P>
             <P ALIGN="center">
             <A NAME="3"></A>
             Audited Financial Statements
             <BR>
             for Debt Strategies Fund III, Inc.
             <BR>
             for the Year Ended February 29, 2000 </P>
             <P ALIGN="center">F-42 </P>
             <P ALIGN="LEFT"><B>INDEPENDENT AUDITORS&#146; REPORT </B></P>
             <P ALIGN="LEFT">The Board of Directors and Shareholders, Debt
               Strategies Fund III, Inc.: </P>
             <P ALIGN="LEFT">We have audited the accompanying statement of
               assets, liabilities and capital, including the schedule of
               investments, of Debt Strategies Fund III, Inc. as of February
               29, 2000, the related statements of operations and cash flows
               for the year then ended and the statement of changes in net
               assets, and the financial highlights for the year then ended and
               the period July 31, 1998 (commencement of operations) to
               February 28, 1999. These financial statements and the financial
               highlights are the responsibility of the Fund's management. Our
               responsibility is to express an opinion on these financial
               statements and the financial highlights based on our audits. </P>
             <P ALIGN="LEFT">We conducted our audits in accordance with
               generally accepted auditing standards. Those standards require
               that we plan and perform the audit to obtain reasonable
               assurance about whether the financial statements and the
               financial highlights are free of material misstatement. An audit
               includes examining, on a test basis, evidence supporting the
               amounts and disclosures in the financial statements. Our
               procedures included confirmation of securities owned at February
               29, 2000 by correspondence with the custodian and financial
               intermediaries; where replies were not received from financial
               intermediaries, we performed other auditing procedures. An audit
               also includes assessing the accounting principles used and
               significant estimates made by management, as well as evaluating
               the overall financial statement presentation. We believe that
               our audits provide a reasonable basis for our opinion. </P>
             <P ALIGN="LEFT">In our opinion, such financial statements and
               financial highlights present fairly, in all material respects,
               the financial position of Debt Strategies Fund III, Inc. as of
               February 29, 2000, the results of its operations, the changes in
               its net assets, its cash flows, and the financial highlights for
               the respective stated periods in conformity with generally
               accepted accounting principles. </P>
             <P ALIGN="LEFT">Deloitte & Touche LLP
             <BR>
             Princeton, New Jersey
             <BR>
             April 17, 2000 </P>
             <P ALIGN="center">F-43 </P>

               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="11"> <DIV ALIGN="RIGHT">Debt Strategies Fund III,
                 Inc., February 29, 2000</DIV>
               </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="11">&nbsp;</TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="11"> <DIV ALIGN="LEFT">SCHEDULE OF INVESTMENTS (in
                 US dollars)</DIV>
               </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2">&nbsp;</TH>
               <TH COLSPAN="2">&nbsp;</TH>
               <TH COLSPAN="2">&nbsp;</TH>
               <TH COLSPAN="2">&nbsp;</TH>
               <TH COLSPAN="2">&nbsp;</TH>
               <TH>&nbsp;</TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2">INDUSTRIES </TH>
               <TH COLSPAN="2">S&P
               <BR>
               Ratings </TH>
               <TH COLSPAN="2">Moody's
               <BR>
               Ratings </TH>
               <TH COLSPAN="2">Face
               <BR>
               Amount </TH>
               <TH COLSPAN="2">Corporate Debt Obligations </TH>
               <TH>Value </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="98%" ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="16%" ALIGN="LEFT"><B>Advertising - 1.0%</B></TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="16%" ALIGN="LEFT">B</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT">B2</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="7%" ALIGN="RIGHT">$1,000,000</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="40%" ALIGN="LEFT">Adams Outdoor Advertising Inc.,
                 10.75% due 3/15/2006</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="7%" ALIGN="RIGHT">$1,037,500</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" NOWRAP><B>Aircraft & Parts - 1.3%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Argo-Tech Corporation, 8.625% due
                 10/01/2007</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">410,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BE Aerospace, 9.50% due 11/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">460,625</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Compass Aerospace Corp., 10.125% due
                 4/15/2005</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">450,000</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,320,625</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Amusement &</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">AMC Entertainment Inc.:</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Recreational</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">9.50% due 3/15/2009 (c)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">191,250</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Services - 1.3%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">200,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">9.50% due 2/01/2011</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">151,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">200,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Carmike Cinemas Inc., 9.375% due 2/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">150,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Hollywood Entertainment, 10.625% due 8/15/2004
                 (c)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">452,500</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Loews Cineplex Entertainment, 8.875% due
                 8/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">387,500</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,332,250</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Apparel - 1.9%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">CS Brooks Canada, Inc., Term, due 6/25/2006
                 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,985,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Automotive</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">750,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">American Axle and Manufacturing Inc., 9.75% due
                 3/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">740,625</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Equipment - 3.6%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,485,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Collins & Aikman Corp., Term C, due 12/31/2005
                 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,477,112</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">D</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Key Plastics, Inc., 10.25% due 3/15/2007</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">640,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">400,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Special Devices Inc., 11.375% due
                 12/15/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">272,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">375,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Tenneco Inc., 11.625% due 10/15/2009 (c)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">381,094</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Venture Holdings Trust, 12% due 6/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">212,500</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">3,723,331</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Broadcast -</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">3,260,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ackerley Group Inc., 9% due 1/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">3,076,625</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Radio &</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Benedek Broadcasting, Term, due 11/20/2007
                 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,497,657</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Television - 8.2%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">300,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Citadel Broadcasting Company, 9.25% due
                 11/15/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">288,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">800,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Gocom Communications, Term B, due 12/31/2007
                 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">798,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,800,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Radio Unica Corp., 14.77% due 8/01/2006 (b)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,792,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">CCC+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">600,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Sirius Satellite, 14.50% due 5/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">579,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">450,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Spanish Broadcasting System, 9.625% due
                 11/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">442,125</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">8,473,407</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Building &</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">325,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Webb (Del E.) Corp., 10.25% due 2/15/2010</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">283,562</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Construction - 0.3%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Building</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,050,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Amatek Industries, 12% due 2/15/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">987,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Materials - 1.8%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">900,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Republic Group Inc., 9.50% due 7/15/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">810,000</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,797,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Business</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,875,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Muzak Holdings LLC, 13% due 3/15/2010 (b)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,125,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Services - 1.1%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Cable - 10.8%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Charter Communications Holdings LLC, 8.625% due
                 4/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">455,000</TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-44 </P>
             <P><FONT
             SIZE="2"></FONT></P>
             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2"><B></B></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Classic Cable Inc.:</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B-</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">250,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">9.375% due 8/01/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">234,375</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B-</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">575,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">10.50% due 3/01/2010 (c)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">575,719</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">CCC+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">3,500,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Coaxial Communications/Phoenix, 10%
                 due 8/15/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">3,346,875</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">CCC+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Caa1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">2,000,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Coaxial LLC, 11.864% due
                 8/15/2008 (b)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,250,000</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Echostar DBS
                 Corporation:</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">200,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">9.25% due 2/01/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">195,000</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">800,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">9.375% due 2/01/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">782,000</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">CCC+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">750,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Golden Sky Systems, 12.375%
                 due 8/01/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">828,750</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">500,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Insight Midwest/Insight Capital,
                 9.75% due 10/01/2009 (c)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">505,000</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Pegasus Communications:</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">250,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">9.75% due 12/01/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">241,250</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B-</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">500,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Term, due 4/30/2005 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">501,459</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B-</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">500,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">RCN Corporation, 10.125% due
                 1/15/2010</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">465,000</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Telewest Communications
                 PLC:</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,000,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">11.25% due 11/01/2008</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,062,500</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">700,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">9.875% due 2/01/2010 (c)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">700,875</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">11,143,803</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B>Chemicals -
                 9.1%</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">BBB-</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Baa3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,000,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Equistar Chemicals LP, 8.75%
                 due 2/15/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">974,760</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Huntsman Corp./ICI Chemical
                 (a):</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">BB</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">750,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Term B, due 6/30/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">755,893</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">BB</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">750,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Term C, due 6/30/2008</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">755,893</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">BB</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Ba2</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">2,086,326</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Huntsman Corporation, Term,
                 due 12/31/2002 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">2,074,156</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">NR*</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">2,977,500</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Lyondell Petrochemical Co.,
                 Term E, due 5/17/2006 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">3,056,972</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,936,533</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Pioneer Americas, Inc.,
                 Term, due 12/05/2006 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,728,356</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">9,346,030</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" ROWSPAN="2"
                 WIDTH="14%"><B>Computer-Related&nbsp;Services - 2.4%</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">NR*</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">NR*</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">2,535,590</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Bridge Information Systems, Term B,
                 due 5/29/2005 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">2,443,322</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B>Consumer</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">BB-</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">375,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Burhmann NV, Term B, due
                 10/26/2007 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">377,953</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B>Products -
                 0.6%</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">250,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Evenflo Company Inc., 11.75%
                 due 8/15/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">242,500</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">620,453</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B>Drilling -
                 6.2%</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">BB-</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">3,000,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Cliffs Drilling, 10.25% due
                 5/15/2003</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">2,985,000</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,496,250</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Key Energy Services Inc., Term B,
                 due 9/14/2004 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,499,055</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">500,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Parker Drilling Co., 9.75%
                 due 11/15/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">476,250</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">BB-</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,300,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">R & B Falcon Corp., 11.375%
                 due 3/15/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">1,378,000</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">6,338,305</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11" VALIGN="top"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top"
                 WIDTH="14%"><B>Electronics/Electronic</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">775,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Advanced Glassfiber Yarn,
                 9.875% due 1/15/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">713,000</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B>Components -
                 2.8%</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">395,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">BGF Industries Inc., 10.25%
                 due 1/15/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">361,425</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">300,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">Filtronic PLC, 10% due
                 12/01/2005</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">290,250</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">BB+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">Ba2</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">750,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Flextronics International Ltd.,
                 8.75% due 10/15/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">716,250</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">B+</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">995,000</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">High Voltage Engineering,
                 10.50% due 8/15/2004</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">813,412</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%"> <HR NOSHADE ALIGN="right"
                 WIDTH="100%" SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="14%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="8%">2,894,337</TD>
               <TD ALIGN="LEFT" WIDTH="4%">&nbsp;</TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-45 </P>

             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="101%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="14"> <DIV ALIGN="RIGHT">Debt Strategies Fund III,
                 Inc., February 29, 2000 </DIV>
               </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="14">&nbsp;</TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="14"> <DIV ALIGN="LEFT">SCHEDULE OF INVESTMENTS
                 <I>(continued) (in US dollars)</I></DIV>
               </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2">&nbsp;</TH>
               <TH COLSPAN="3">&nbsp;</TH>
               <TH COLSPAN="2" ALIGN="left">&nbsp;</TH>
               <TH COLSPAN="3">&nbsp;</TH>
               <TH COLSPAN="2">&nbsp;</TH>
               <TH WIDTH="0%">&nbsp;</TH>
               <TH WIDTH="16%">&nbsp;</TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2">INDUSTRIES </TH>
               <TH COLSPAN="3">S&P
               <BR>
               Ratings </TH>
               <TH COLSPAN="2" ALIGN="left">Moody's
               <BR>
               Ratings </TH>
               <TH COLSPAN="3">Face
               <BR>
               Amount </TH>
               <TH COLSPAN="2"> Corporate Debt Obligations </TH>
               <TH WIDTH="0%">&nbsp;</TH>
               <TH WIDTH="16%"> Value </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="59%" ALIGN="LEFT" COLSPAN="14"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="10%" ALIGN="LEFT" NOWRAP><B>Energy - 2.5%</B></TD>
               <TD WIDTH="0%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="0%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="6%" ALIGN="LEFT" VALIGN="top"> <DIV
                 ALIGN="left">B</DIV>
               </TD>
               <TD WIDTH="0%" ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="8%" ALIGN="LEFT" VALIGN="top">Ba2</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD WIDTH="13%" ALIGN="RIGHT" VALIGN="top"> <DIV
                 ALIGN="right">$&nbsp;&nbsp;&nbsp;500,000</DIV>
               </TD>
               <TD WIDTH="4%" ALIGN="RIGHT">&nbsp;</TD>
               <TD WIDTH="0%" ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" VALIGN="top" NOWRAP>Belco Oil & Gas
                 Corp., 8.875% due 9/15/2007</TD>
               <TD WIDTH="0%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="16%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;465,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%" VALIGN="top"> <DIV
                 ALIGN="left">B</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%" VALIGN="top">Ba2</TD>
               <TD ALIGN="LEFT" WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%" VALIGN="top"> <DIV
                 ALIGN="right">500,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" VALIGN="top" NOWRAP>Canadian Forest
                 Oil Ltd., 8.75% due 9/15/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">465,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%" VALIGN="top"> <DIV
                 ALIGN="left">BBB</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%" VALIGN="top">B3</TD>
               <TD ALIGN="LEFT" WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%" VALIGN="top"> <DIV
                 ALIGN="right">500,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" VALIGN="top" NOWRAP>Chesapeake
                 Energy Corp., 9.625% due 5/01/2005</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">472,500</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%" VALIGN="top"> <DIV
                 ALIGN="left">B-</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%" VALIGN="top">Caa1</TD>
               <TD ALIGN="LEFT" WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%" VALIGN="top"> <DIV
                 ALIGN="right">675,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" VALIGN="top" NOWRAP>Energy Corp. of
                 America, 9.50% due 5/15/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">479,250</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%" VALIGN="top"> <DIV
                 ALIGN="left">B</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%" VALIGN="top">B2</TD>
               <TD ALIGN="LEFT" WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%" VALIGN="top"> <DIV
                 ALIGN="right">250,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" VALIGN="top" NOWRAP>Forest Oil
                 Corporation, 10.50% due 1/15/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">252,500</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%" VALIGN="top"> <DIV
                 ALIGN="left">B+</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%" VALIGN="top">B1</TD>
               <TD ALIGN="LEFT" WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%" VALIGN="top"> <DIV
                 ALIGN="right">500,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" VALIGN="top" NOWRAP>Nuevo Energy
                 Company, 9.50% due 6/01/2008</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">487,500</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%"> <HR NOSHADE ALIGN="right"
                 WIDTH="70%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left"></DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">2,621,750</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="59%" COLSPAN="14"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B>Environmental</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left"></DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>URS Corporation (a):</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" NOWRAP><B>Services - 1.0%</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">497,500</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="40%" NOWRAP> <P>Term B, due 6/09/2006</P>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">501,542</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">497,500</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="40%" NOWRAP>Term C, due 6/09/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">501,542</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%"> <HR NOSHADE ALIGN="right"
                 WIDTH="70%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left"></DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">1,003,084</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="59%" COLSPAN="14"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" VALIGN="top"><B>Financial</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB+</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">1,000,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Sovereign Bank, Term, due
                 11/17/2003 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">1,004,375</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" VALIGN="top" NOWRAP><B>Services -
                 1.0%</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="59%" COLSPAN="14"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B>Food & Kindred</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B+</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">1,000,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>B & G Foods, Term B, due
                 3/15/2006 (a)</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">998,750</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" NOWRAP><B>Products - 5.1%</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB-</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">500,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Luigino's Inc., 10% due
                 2/01/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">410,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">1,000,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>SC International Services,
                 Inc., 9.25% due 9/01/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">920,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left"></DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%"></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Specialty Foods, Inc.
                 (a):</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">NR*</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">1,075,207</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="40%" NOWRAP>Revolving Credit, due
                 1/31/2001</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">1,069,831</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">NR*</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B3</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">1,834,954</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="40%" NOWRAP>Term, due 1/31/2001</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">1,839,541</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT" WIDTH="10%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%"> <HR NOSHADE ALIGN="right"
                 WIDTH="70%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left"></DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">5,238,122</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="59%" COLSPAN="14"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B>Forest Products - 0.5%</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%" VALIGN="top"> <DIV
                 ALIGN="left">B+</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%" VALIGN="top">B3</TD>
               <TD ALIGN="LEFT" WIDTH="2%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%" VALIGN="top"> <DIV
                 ALIGN="right">500,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" VALIGN="top" NOWRAP>Millar Western
                 Forest, 9.875% due 5/15/2008</TD>
               <TD ALIGN="LEFT" WIDTH="0%" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%" VALIGN="top">493,750</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="4%"></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="59%" COLSPAN="14"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" HEIGHT="24"
                 VALIGN="top"><B>Furniture &</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%" HEIGHT="24">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%" HEIGHT="24">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%" HEIGHT="24"> <DIV
                 ALIGN="left">B+</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%" HEIGHT="24">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%" HEIGHT="24">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="2%" HEIGHT="24">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%" HEIGHT="24"> <DIV
                 ALIGN="right">625,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%" HEIGHT="24">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%" HEIGHT="24">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" HEIGHT="24" NOWRAP>Formica
                 Corporation, 10.875% due 3/01/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%" HEIGHT="24">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%" HEIGHT="24">553,125</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" VALIGN="top" NOWRAP><B>Fixtures -
                 0.5%</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="59%" COLSPAN="14"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" NOWRAP><B>Gaming - 4.2%</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B-</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">325,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Argosy Gaming Company,
                 10.75% due 6/01/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">333,937</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B-</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">300,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Coast Hotels & Casino, 9.50%
                 due 4/01/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">281,250</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B1</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">500,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Eldorado Resorts LLC, 10.50%
                 due 8/15/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">500,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">1,000,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Harvey Casino Resorts,
                 10.625% due 6/01/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">1,027,500</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left"></DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Hollywood Park Inc.:</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB-</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">250,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="40%" NOWRAP>9.25% due 2/15/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">241,875</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">250,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="40%" NOWRAP>9.50% due 8/01/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">242,500</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB+</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">300,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Horseshoe Gaming Holdings,
                 8.625% due 5/15/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">276,750</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB+</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">300,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Horseshoe Gaming LLC, 9.375%
                 due 6/15/2007</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">290,250</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">1,040,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Isle of Capri Casinos, 8.75%
                 due 4/15/2009</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">921,700</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">B2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">375,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Trump Atlantic City
                 Associates/Funding Inc.,</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">255,000</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="40%" NOWRAP> 11.25% due 5/01/2006</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%"> <HR NOSHADE ALIGN="right"
                 WIDTH="70%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left"></DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right"></DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">4,370,762</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="59%" COLSPAN="14"> <HR NOSHADE
                 ALIGN="right" WIDTH="100%" SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" VALIGN="top"><B>Hotels &</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">B-</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba3</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">500,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>Extended Stay America, 9.15%
                 due 3/15/2008</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">446,250</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="10%" VALIGN="top" NOWRAP><B>Motels -
                 5.1%</B></TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="6%"> <DIV ALIGN="left">BB</DIV>
               </TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="8%">Ba2</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="13%"> <DIV ALIGN="right">1,000,000</DIV>
               </TD>
               <TD ALIGN="RIGHT" WIDTH="4%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="LEFT" COLSPAN="2" NOWRAP>HMH Properties, Inc., 8.45%
                 due 12/01/2008</TD>
               <TD ALIGN="LEFT" WIDTH="0%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="16%">897,500</TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <P ALIGN="center">F-46 </P>
             <P><FONT
             SIZE="2">  </FONT></P>
             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2"><B></B></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="18%" ALIGN="LEFT"><B></B></TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="3%" ALIGN="LEFT">NR*</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="3%" ALIGN="LEFT">Ba1</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="7%" ALIGN="RIGHT">1,000,000</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="50%" ALIGN="LEFT">Starwood Hotels & Resorts Trust,
                 Term, due 2/23/2003 (a)</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="7%" ALIGN="RIGHT">1,003,750</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Wyndham International (a):</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Incremental Term, due 6/30/2006</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">987,031</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term, due 6/30/2006</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,947,778</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">5,282,309</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Industrial</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">350,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Building One Services, 10.50% due 5/01/2009
                 (c)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">322,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Services - 0.3%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Insurance - 0.5%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">600,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Willis Corroon Corporation, 9% due
                 2/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">480,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Leasing & Rental</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Avis Rent A Car (a):</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Services - 5.6%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term B, due 6/30/2006</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,509,923</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term C, due 6/30/2007</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,510,875</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">National Equipment Services, 10% due
                 11/30/2004</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">241,250</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Neff Corp., 10.25% due 6/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,800,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Penhall International, 12% due 8/01/2006</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">502,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Universal Hospital Services, 10.25% due
                 3/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">170,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">5,734,548</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Manufacturing - 5.5%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Citation Corporation, Term B, due 12/01/2007
                 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">495,157</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,980,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Environmental Systems Product, Inc., Term B,
                 due 9/30/2005 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,885,950</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">475,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Fairfield Manufacturing Company Inc., 9.625%
                 due 10/15/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">432,250</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Metokote Corp., Term B, due 11/02/2005 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,005,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">CCC-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ca</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Morris Materials Handling, 9.50% due
                 4/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">95,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">300,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Russell-Stanley Holding Inc., 10.875% due
                 2/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">261,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">TransTechnology, Term, due 8/31/2009 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">492,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">5,666,857</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Medical</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,860,947</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Alaris Medical Systems Inc., Term D, due
                 5/01/2005 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,853,969</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Equipment - 3.7%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Hanger Ortho, Term B, due 12/30/2006 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,926,250</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">3,780,219</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Metals &</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">CCC-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">980,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">AEI Resources, Term B, due 12/31/2004 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">869,750</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Mining - 4.4%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">198,898</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Asarco Incorporated, Term 2, due 5/15/2001
                 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">198,525</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Golden Northwest Aluminum, 12% due
                 12/15/2006</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">523,750</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">3,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ormet Corporation, Term, due 8/15/2008 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,992,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">4,584,525</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Online</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">300,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">PSINet Inc., 11% due 8/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">300,750</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Services - 0.5%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Verio Inc., 11.25% due 12/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">256,250</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">557,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Packaging - 1.2%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Consumers Packaging Inc., 9.75% due
                 2/01/2007</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">142,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Packaging Corp. (a):</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">319,008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term B, due 4/12/2007</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">320,803</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">319,008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term C, due 4/12/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">320,803</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Packaging Corporation of America, 9.625% due
                 4/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,284,106</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="11"> <HR NOSHADE WIDTH="100%"
                 SIZE="1"> <B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-47 </P>
             <P ALIGN="left"></P>
             <P ALIGN="right"></P>
             <P>&nbsp; </P>
             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="44%">&nbsp;</TD>
               <TD WIDTH="13%">&nbsp;</TD>
               <TD WIDTH="43%" ALIGN="right"><B>Debt Strategies Fund III, Inc.,
                 February 29, 2000</B></TD>
              </TR>
              <TR>
               <TD WIDTH="44%">&nbsp;</TD>
               <TD WIDTH="13%">&nbsp;</TD>
               <TD WIDTH="43%" ALIGN="right">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="44%"><B>SCHEDULE OF INVESTMENTS
                 <I>(continued)</I></B></TD>
               <TD WIDTH="13%"><B></B></TD>
               <TD WIDTH="43%" ALIGN="right"><B><I>(in US dollars)</I></B></TD>
              </TR>
             </TABLE>
             <P>  </P>
             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2">INDUSTRIES <HR WIDTH=100% SIZE=1 COLOR=BLACK
                 NOSHADE> </TH>
               <TH COLSPAN="2">S&P
               <BR>
               Ratings <HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE> </TH>
               <TH COLSPAN="2">Moody's
               <BR>
               Ratings <HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE> </TH>
               <TH COLSPAN="2">Face
               <BR>
               Amount <HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE> </TH>
               <TH COLSPAN="2">Corporate Debt Obligations <HR WIDTH=100% SIZE=1
                 COLOR=BLACK NOSHADE> </TH>
               <TH COLSPAN="2">Value <HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE>
                 </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="15%" ALIGN="LEFT"><B>Paging - 0.1%</B></TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="16%" ALIGN="LEFT">CCC+</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT">B3</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="7%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;100,000</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="41%" ALIGN="LEFT">Metrocall Inc., 11% due 9/15/2008
                 (c)</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="7%"
                 ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;83,000</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Paper - 7.1%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,981,250</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Cellu Tissue Holdings, Inc., Term C, due
                 3/24/2005 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,916,859</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">450,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Norampac Inc., 9.50% due 2/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">447,750</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,990,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Pacifica Paper, Term B, due 12/31/2006 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,999,950</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">3,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Repap New Brunswick, Inc., Term B, due
                 6/01/2004 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,938,125</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" VALIGN="top"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="top">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">7,302,684</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Petroleum</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT" NOWRAP>Clark Refining & Marketing, Inc., Term,
                 due 11/15/2004 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Refineries - 1.2%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Printing &</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Premier Graphics Inc., 11.50% due
                 12/01/2005</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">112,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Publishing 0.3%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Baa3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">World Color Press Inc., 8.375% due
                 11/15/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">244,441</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">356,941</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Property</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NRT Incorporated, Term, due 7/31/2004 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">497,969</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Management - 2.6%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,990,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Prison Realty, Term C, due 12/31/2002 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,989,379</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">150,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Prison Realty Trust Inc., 12% due 6/01/2006</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">144,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,631,348</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Restaurants &</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Domino & Bluefence (a):</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Food Service - 1.0%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">497,482</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term B, due 12/21/2006</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,125</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">498,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term C, due 12/21/2007</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,757</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,000,882</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Retail - 0.8%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Group 1 Automotive Inc., 10.875% due
                 3/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">472,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">450,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">United Auto Group, Inc., 11% due 7/15/2007</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">427,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">900,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Tower Construction</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">American Tower, Term B, due 12/30/2007 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,007,708</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>& Leasing - 2.1%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">150,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Crown Castle International Corporation, 9% due
                 5/15/2011</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">141,750</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Spectrasite, Term B, due 6/30/2006 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,003,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,152,958</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Transportation -</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">995,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Transportation Manufacturing, Term B, due
                 6/15/2006 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,000,597</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Services - 1.0%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Waste</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,300,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Norcal Waste Systems, 13.50% due 11/15/2005</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,368,250</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Management -1.8%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ca</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">300,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Safety-Kleen Corporation, 9.25% due
                 5/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">258,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Stericycle Inc., 12.375% due 11/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">255,625</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="top">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR WIDTH=100% NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,881,875</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR WIDTH=100% NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Wired</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">400,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Call-Net Enterprises Inc., 9.375% due
                 5/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">316,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Telecommunications -&nbsp;6.4%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">775,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caprock Communications Corporation, 11.50% due
                 5/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">786,625</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD
                 ALIGN="LEFT"><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">925,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Global Telesystems Group, 9.875% due
                 2/15/2005</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">786,250</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <P ALIGN="center">F-48 </P>

             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="12%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="19%" ALIGN="LEFT">B</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT">B3</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="6%" ALIGN="RIGHT">120,000</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="43%" ALIGN="LEFT">Hermes Europe RailTel BV, 10.375%
                 due 1/15/2009</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="6%" ALIGN="RIGHT">112,500</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">750,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Intermedia Communications Inc., 9.50% due
                 3/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">718,125</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Metromedia Fiber Network, 10% due
                 11/15/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">245,625</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">300,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Netia Holdings II BV, 13.125% due 6/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">319,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Nextlink Communications Inc., 12.25% due
                 6/01/2009 (b)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,210,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Primus Telecommunications Group, 11.25% due
                 1/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">475,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">400,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">RSL Communications PLC, 9.875% due
                 11/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">334,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">200,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Versatel Telecom BV, 11.875% due 7/15/2009
                 (c)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">204,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Williams Communications Group Inc.:</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">10.70% due 10/01/2007</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">256,875</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">10.875% due 10/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">255,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Worldwide Fiber Inc.:</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">360,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">12.50% due 12/15/2005</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">377,100</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">200,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">12% due 8/01/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">208,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">6,604,600</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Wireless</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Dolphin Telecom PLC (b):</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Telecommunications -&nbsp;10.8%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">CCC+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">11.50% due 6/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">113,125</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD
                 ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">CCC+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">330,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">14% due 5/15/2009</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">138,600</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">ESAT Telecom Group PLC:</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">625,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">12.427% due 2/01/2007 (b)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">562,500</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,375,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">11.875% due 12/01/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,595,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">400,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Microcell Telecommunications, 12% due 6/01/2009
                 (b)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">261,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Nextel Communications, Inc. (a):</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term B, due 6/30/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,516,340</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">BB-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Ba2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,500,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term C, due 12/31/2008</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,516,340</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B3</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">800,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Nextel Partners Inc., 14% due 2/01/2009 (b)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">534,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">200,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">PTC International Finance II SA, 11.25% due
                 12/01/2009 (c)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">202,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">2,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">PowerTel PCS, Term B, due 12/31/2006 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,993,750</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">CCC+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Caa1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">650,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Telesystem International Wireless Inc., 16.147%
                 due 6/30/2007 (b)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">416,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">NR*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B2</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Tritel Holdings, Term B, due 12/31/2007 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,003,250</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">VoiceStream Wireless Corporation/VoiceStream
                 Wireless</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Holding Company:</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B-</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">250,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">10.375% due 11/15/2009 (c)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">258,437</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp; </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B+</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">B1</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Term B, due 2/25/2009 (a)</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,005,859</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">11,116,201</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT"><B>Total Investments in Corporate Debt
                 Obligations (Cost -$139,433,735) - 129.2%</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">133,121,543</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="12"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P ALIGN="center">F-49</P>

             <TABLE WIDTH="80%" BORDER="0" CELLSPACING="0" CELLPADDING="0">
              <TR>
               <TD HEIGHT="%" WIDTH="%" COLSPAN="5"> <DIV ALIGN="RIGHT"><B>Debt
                 Strategies Fund III, Inc., February 29, 2000</B></DIV>
               </TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD HEIGHT="%" WIDTH="%" COLSPAN="4">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD HEIGHT="%" WIDTH="%" COLSPAN="4"><B>SCHEDULE OF INVESTMENTS
                 <I>(concluded) (in US dollars)</I></B></TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD HEIGHT="%" WIDTH="%"> <DIV
                 ALIGN="center"><B>INDUSTRIES</B></DIV>
               </TD>
               <TD HEIGHT="%" WIDTH="%"> <DIV ALIGN="right"><B>Shares
                 Held</B></DIV>
               </TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
               <TD HEIGHT="%" WIDTH="%"> <DIV ALIGN="center"><B>Stocks and
                 Warrants</B></DIV>
               </TD>
               <TD HEIGHT="%" WIDTH="%"> <DIV ALIGN="center"><B>Value</B></DIV>
               </TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD HEIGHT="%" WIDTH="%" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%"><B>Broadcast Radio & Television -
                 0.2%</B></TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">1,800</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">Sirius Satellite (Warrants) (c)(e)</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">$234,000</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%"><B>Energy - 0.4%</B></TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">27,883</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">Forcenergy Inc.</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">390,362</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%"><B>Packaging - 0.6% </B></TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">5,290 </DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" NOWRAP HEIGHT="%">Packaging Corporation of America
                 (Preferred) (d) </TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">617,662</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" NOWRAP HEIGHT="%"><B>Tower Construction & Leasing
                 - 2.3%</B></TD>
               <TD WIDTH="%" VALIGN="top" HEIGHT="%"> <DIV
                 ALIGN="right">2,337</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" VALIGN="top" HEIGHT="%">Crown Castle International
                 Corporation (Preferred) (d)</TD>
               <TD WIDTH="%" VALIGN="top" HEIGHT="%"> <DIV
                 ALIGN="right">2,407,281</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%"><B>Wireless Telecommunications -
                 1.6%</B></TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">1,000</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">Centaur Funding Corp. (Preferred)</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">1,024,688</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">534</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">Dobson Communications (Preferred)
                 (d)</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">579,119</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%"> <HR NOSHADE ALIGN="right" SIZE="1">
                 </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">1,603,807 </DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" NOWRAP HEIGHT="%">Total Investments in Stocks &
                 Warrants (Cost - $4,885,417) - 5.1% </TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">5,253,112</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right"><B>Face
                 Amount</B></DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="center"><B>Short-Term
                 Securities</B></DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%"><B>Commercial Paper - 0.5%**</B></TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">$549,000</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">Vastar Resources, 5.95% due
                 3/01/2000</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">549,000</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" NOWRAP HEIGHT="%">Total Investments in Short-Term
                 Securities (Cost - $549,000) - 0.5%</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">549,000</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE ALIGN="right"
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">Total Investments (Cost - $144,868,152)
                 - 134.8% </TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">138,923,655</DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">Liabilities in Excess of Other Assets -
                 (34.8%)</TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">(35,844,233) </DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%"> <HR NOSHADE SIZE="1" ALIGN="right">
                 </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">Net Assets - 100.0% </TD>
               <TD WIDTH="%" HEIGHT="%"> <DIV ALIGN="right">$103,079,422 </DIV>
               </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp; </TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%">&nbsp;</TD>
               <TD WIDTH="%" HEIGHT="%"> <HR NOSHADE ALIGN="right"> </TD>
               <TD HEIGHT="%" WIDTH="%">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="%" COLSPAN="6" HEIGHT="%"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>(a) </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Floating or Variable Rate
                 Corporate Debt -The interest rates on floating or variable
                 rate corporate debt are subject to change periodically based
                 on the change in the prime rate of a US Bank, LIBOR (London
                 Interbank Offered Rate), or in some cases, another base
                 lending rate. Corporate loans represent 64.8%&nbsp;of the
                 Funds net assets. </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>(b) </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Represents a zero coupon or
                 step bond; the interest rate shown reflects the effective
                 yield at the time of purchase by the Fund. </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>(c) </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>The security may be offered
                 and sold to &quot;qualified institutional
                 buyers&quot;&nbsp;under Rule 144A of the Securities Act of
                 1933. </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>(d) </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Represents a pay-in-kind
                 security which may pay interest/dividends in additional face
                 amount/shares. </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>(e) </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Warrants entitle the Fund to
                 purchase a predetermined number of shares of common stock and
                 are non-income producing. The purchase price and number of
                 shares are subject to adjustment under certain conditions
                 until the expiration date. </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>* </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Not Rated. </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>** </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Commercial Paper is traded
                 on a discount basis; the interest rate shown reflects the
                 discount rate paid at the time of purchase by the Fund.
                 </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>+</I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Non-income producing
                 security. </I></P>
               </TD>
              </TR>
             </TABLE>
             <P ALIGN="LEFT"><I>Ratings of issues shown have not been audited
               by Deloitte &&nbsp;Touche LLP. </I></P>
             <P ALIGN="LEFT">See Notes to Financial Statements. </P>
             <DIV ALIGN="center">F-50 </DIV>
             <P ALIGN="LEFT"><B>STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
               </B></P>

             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR>
               <TH COLSPAN="2" VALIGN="bottom"></TH>
               <TH COLSPAN="2" VALIGN="bottom"></TH>
               <TH COLSPAN="2" VALIGN="bottom"></TH>
               <TH COLSPAN="2" VALIGN="bottom"></TH>
              </TR>
              <TR>
               <TD WIDTH="15%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="61%" ALIGN="LEFT" VALIGN="bottom"><B>As of February
                 29, 2000 </B></TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="8%" ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="8%" ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="100%" ALIGN="LEFT" COLSPAN="8" VALIGN="bottom"> <HR
                 NOSHADE SIZE="1"> </TD>
              </TR>
              <TR>
               <TD WIDTH="15%" ALIGN="LEFT" VALIGN="bottom"><B>Assets:</B></TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="61%" ALIGN="LEFT" VALIGN="bottom">Investments, at
                 value (identified cost -$144,868,152)</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="8%" ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="8%" ALIGN="RIGHT"
                 VALIGN="bottom">$&nbsp;138,923,655</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Receivables:</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Interest</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">$&nbsp;&nbsp;2,750,6330</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Securities sold</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">168,125</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">2,918,758</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp; </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Prepaid expenses and other
                 assets</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">35,271</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Total assets</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">141,877,684</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" COLSPAN="8" VALIGN="bottom"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Liabilities: </B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Loans</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">37,000,000</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" COLSPAN="8" VALIGN="bottom">&nbsp; </TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Payables:</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Custodian bank</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">912,789</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Interest on loans</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">425,188</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" HEIGHT="22" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" HEIGHT="22" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" HEIGHT="22" VALIGN="bottom">Dividends to
                 shareholders</TD>
               <TD ALIGN="LEFT" HEIGHT="22" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" HEIGHT="22" VALIGN="bottom">231,659</TD>
               <TD ALIGN="LEFT" HEIGHT="22" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" HEIGHT="22" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" HEIGHT="22" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Investment adviser</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">53,882</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Commitment fees</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">2,306</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">1,625,824</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Accrued expenses and other
                 liabilities</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">172,438</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Total liabilities</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">38,798,262</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" COLSPAN="8" VALIGN="bottom"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Net Assets:</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom"> Net assets</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">$&nbsp;103,079,422</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" COLSPAN="8" VALIGN="bottom"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="top"><B>Capital:</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Common Stock, $.10 par value,
                 200,000,000 shares authorized</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 VALIGN="bottom">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,101,000</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Paid-in capital in excess of
                 par</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">108,740,136</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Undistributed investment income
                 -net</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">1,088,046</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Accumulated realized capital
                 losses on investments and foreign currency transactions -
                 net</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">(1,905,263</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">)</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Unrealized depreciation on
                 investments and foreign currency transactions - net</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">(5,944,497</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">)</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Total - Equivalent to $9.36 per
                 share based on 11,010,000 shares of capital stock
                 outstanding</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">(market price - $8.75)</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">$&nbsp;103,079,422</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" COLSPAN="8" VALIGN="bottom"> <HR NOSHADE
                 SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <P>See Notes to Financial Statements. </P>
             <P ALIGN="center">F-51</P>
             <P ALIGN="right"><B>Debt Strategies Fund III, Inc., February 29,
               2000</B></P>
             <P><B>STATEMENT OF OPERATIONS</B></P>

             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR>
               <TH COLSPAN="2" VALIGN="bottom"></TH>
               <TH COLSPAN="2" VALIGN="bottom"></TH>
               <TH COLSPAN="2" VALIGN="bottom"></TH>
               <TH COLSPAN="2" VALIGN="bottom"></TH>
              </TR>
              <TR>
               <TD WIDTH="21%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="48%" ALIGN="LEFT" VALIGN="bottom">For the Year Ended
                 February 29, 2000 </TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="11%" ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="3%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="11%" ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD WIDTH="21%" ALIGN="LEFT" VALIGN="bottom"><B>Investment
                 Income:</B></TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="48%" ALIGN="LEFT" VALIGN="bottom">Interest and
                 discount earned</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="11%" ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="3%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD WIDTH="11%" ALIGN="RIGHT"
                 VALIGN="bottom">$&nbsp;14,578,909</TD>
               <TD WIDTH="2%" ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Dividends</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">549,151</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Facility and other fees</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">198,652</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Total income</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">15,326,712</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Expenses:</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Loan interest expense</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">$&nbsp;2,370,553</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Investment advisory fees</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">899,808</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Accounting services</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">90,900</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Professional fees</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">86,873</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Borrowing costs</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">34,456</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Transfer agent fees</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">32,732</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Directors' fees and
                 expenses</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">27,120</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Printing and shareholder
                 reports</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">25,626</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Amortization of organization
                 expenses</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">19,027</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Custodian fees</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">18,126</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Listing fees</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">18,110</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Pricing services</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">12,357</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Other</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">19,936</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Total expenses</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">3,655,624</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Investment income - net</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">11,671,088</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B></B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Realized &
                 Unrealized</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Realized gain (loss) from:</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Gain (Loss) on</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Investments - net</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">(1,864,868</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">)</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Investments &</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Foreign currency transactions -
                 net</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">39,583</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">(1,825,285</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">)</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Foreign Currency</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Transactions - Net:</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Change in unrealized
                 appreciation/depreciation on:</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Investments - net</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">(6,066,901</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">)</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">Foreign currency transactions -
                 net</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">(31,896</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">)</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">(6,098,797</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">)</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom"><B>Net Increase in Net Assets
                 Resulting from Operations</B></TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 VALIGN="bottom">$&nbsp;&nbsp;&nbsp;3,747,006</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
              <TR>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" VALIGN="bottom">&nbsp;</TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <P>See Notes to Financial Statements.</P>
             <DIV ALIGN="center">F-52 </DIV>
             <P><FONT
             SIZE="2"></FONT></P>
             <P><B>STATEMENTS OF CHANGES IN NET ASSETS</B> </P>
             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"> <DIV ALIGN="left"><I>Increase (Decrease) in Net
                 Assets: </I></DIV>
               </TH>
               <TH COLSPAN="2">For the
               <BR>
               Year Ended
               <BR>
               Feb. 29, 2000 </TH>
               <TH COLSPAN="2">For the Period
               <BR>
               July 31, 1998+ to
               <BR>
               Feb. 28, 1999 </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="8"></TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="100%" ALIGN="LEFT" COLSPAN="8"> <HR NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="10%" ALIGN="LEFT"><B>Operations:</B></TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="66%" ALIGN="LEFT">Investment income - net</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="8%" ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;11,671,088</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="8%"
                 ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5,158,843</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Realized loss on investments and foreign
                 currency transactions - net</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(1,825,285</TD>
               <TD ALIGN="LEFT">)</TD>
               <TD ALIGN="RIGHT">(62,479</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Change in unrealized appreciation/depreciation
                 on investments and foreign currency transactions - net</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(6,098,797</TD>
               <TD ALIGN="LEFT">)</TD>
               <TD ALIGN="RIGHT">154,300</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Net increase in net assets resulting from
                 operations</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">3,747,006</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">5,250,664</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="8"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Dividends to</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Dividends to shareholders from investment
                 income - net</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(11,361,428</TD>
               <TD ALIGN="LEFT">)</TD>
               <TD ALIGN="RIGHT">(4,397,956</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Shareholders:</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="8"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Capital Share</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Proceeds from issuance of Common Stock</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">110,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Transactions:</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Offering costs resulting from the issuance of
                 shares</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">36,136</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(295,000</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Net increase in net assets resulting from
                 capital share transactions</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">36,136</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">109,705,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="8"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Net Assets:</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Total increase (decrease) in net assets</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(7,578,286</TD>
               <TD ALIGN="LEFT">)</TD>
               <TD ALIGN="RIGHT">110,557,708</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Beginning of period</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">110,657,708</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">100,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">End of period*</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">$&nbsp;103,079,422</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">$&nbsp;110,657,708</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="2"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="2"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="8"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT"><I>*Undistributed investment income -
                 net</I></TD>
               <TD ALIGN="LEFT"><I></I></TD>
               <TD
                 ALIGN="RIGHT"><I>$&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;1,088,046</I></TD>
               <TD ALIGN="LEFT"><I></I></TD>
               <TD
                 ALIGN="RIGHT"><I>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;738,803</I></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="2"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="2"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="8"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P><I>+ Commencement of operations.</I></P>
             <P> See Notes to Financial Statements.</P>
             <P ALIGN="center">F-53</P>
             <P></P>
             <P ALIGN="right"> <B>Debt Strategies Fund III, Inc., February 29,
               2000</B></P>
             <P><B> STATEMENT OF CASH FLOWS </B></P>
             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"></TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="14%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="71%" ALIGN="LEFT"><B>For the Year Ended February 29,
                 2000</B></TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="9%" ALIGN="RIGHT">&nbsp;</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="100%" ALIGN="LEFT" COLSPAN="6"> <HR NOSHADE SIZE="1">
                 </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="14%" ALIGN="LEFT"><B>Cash Provided by</B></TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="71%" ALIGN="LEFT">Net increase in net assets
                 resulting from operations</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="9%"
                 ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3,747,006</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Operating Activities:</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Adjustments to reconcile net increase in net
                 assets resulting from operations to net cash provided by</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">operating activities:</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Increase in receivables</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(374,890</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Decrease in other assets</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">11,236</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Increase in other liabilities</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">1,262,148</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Realized and unrealized gain on investments and
                 foreign currency transactions - net</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">7,924,082</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Amortization of discount</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(1,275,924</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Net cash provided by operating activities</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">11,293,658</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Cash Used for</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Proceeds from sales of long-term
                 investments</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">72,482,584</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Investing Activities:</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Purchases of long-term investments</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(91,262,370</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Purchases of short-term investments</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(123,493,392</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Proceeds from sales and maturities of
                 short-term investments</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">123,289,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Net cash used for investing activities</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(18,984,178</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Cash Provided by</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Offering costs resulting from the issuance of
                 Common Stock</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">36,136</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Financing Activities:</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Cash receipts from borrowings</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">71,000,000</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Cash payments on borrowings</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(52,000,000</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Dividends paid to shareholders</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(11,345,942</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Net cash provided by financing activities</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">7,690,194</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Cash:</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Net decrease in cash</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(326</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Cash at beginning of year</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">326</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT" VALIGN="top">Cash at end of year</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT" VALIGN="top"
                 NOWRAP>$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp; &#151;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B></B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Cash Flow</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">Cash paid for interest</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,998,165</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT"><B>Information:</B></TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="6"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P>See Notes to Financial Statements.</P>
             <P ALIGN="center">F-54</P>
             <P> </P>
             <P><B>FINANCIAL HIGHLIGHTS</B></P>
             <P><B>The following per share data and ratios have been derived
               from information provided in the financial statements</B>. </P>
             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="100%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2"> <DIV ALIGN="left"><I>Increase (Decrease) in Net
                 Asset Value:</I></DIV>
               </TH>
               <TH COLSPAN="3">For the Year
               <BR>
               Ended
               <BR>
               Feb. 29, 2000 </TH>
               <TH COLSPAN="2">For the Period
               <BR>
               July 31, 1998+ to
               <BR>
               Feb. 28, 1999 </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="9"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="11%" ALIGN="LEFT"><B>Per Share</B></TD>
               <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="51%" ALIGN="LEFT">Net asset value, beginning of
                 period</TD>
               <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="12%"
                 ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10</TD>
               <TD WIDTH="3%" ALIGN="LEFT">.05</TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="9%"
                 ALIGN="RIGHT">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10</TD>
               <TD WIDTH="9%" ALIGN="LEFT">.00</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="11%" ALIGN="LEFT"><B>Operating</B></TD>
               <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="51%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="1%" ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
               <TD WIDTH="2%" ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B>Performance:</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Investment income - net</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">1</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.06</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%"></TD>
               <TD ALIGN="LEFT" WIDTH="9%">.47</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Realized and unrealized gain (loss)
                 on investments and foreign currency transactions - net</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">(</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.72)</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%"></TD>
               <TD ALIGN="LEFT" WIDTH="9%">.01</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Total from investment
                 operations</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%"></TD>
               <TD ALIGN="LEFT" WIDTH="3%">.34</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%"></TD>
               <TD ALIGN="LEFT" WIDTH="9%">.48</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Less dividends from investment
                 income - net</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">(1</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.03)</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">(</TD>
               <TD ALIGN="LEFT" WIDTH="9%">.40)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Capital charge resulting from the
                 issuance of Common Stock</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&#151;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">(</TD>
               <TD ALIGN="LEFT" WIDTH="9%">.03)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Net asset value, end of period</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="12%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;9</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.36</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="9%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10</TD>
               <TD ALIGN="LEFT" WIDTH="9%">.05</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Market price per share, end of
                 period</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="12%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;8</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.75</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="9%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8</TD>
               <TD ALIGN="LEFT" WIDTH="9%">.875</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="9"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="9%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B>Total Investment</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Based on market price per share</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">10</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.82%</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">(7</TD>
               <TD ALIGN="LEFT" WIDTH="9%" NOWRAP>.37%)++</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B>Return:**</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Based on net asset value per
                 share</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">4</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.69%</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">4</TD>
               <TD ALIGN="LEFT" WIDTH="9%" NOWRAP>.89%++</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="9"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B>Ratios to Average</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Expenses, net of reimbursement and
                 excluding interest expense</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">1</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.18%</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%"></TD>
               <TD ALIGN="LEFT" WIDTH="9%" NOWRAP>.31%*</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B>Net Assets:</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="9%">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Expenses, net of reimbursement</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">3</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.36%</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%"></TD>
               <TD ALIGN="LEFT" WIDTH="9%" NOWRAP>.39%*</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Expenses</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">3</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.36%</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">1</TD>
               <TD ALIGN="LEFT" WIDTH="9%" NOWRAP>.09%*</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Investment income - net</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">10</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.73%</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">8</TD>
               <TD ALIGN="LEFT" WIDTH="9%" NOWRAP>.02%*</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="9"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B>Leverage:</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Amount of borrowings, end of period
                 (in thousands)</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="12%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;37,0</TD>
               <TD ALIGN="LEFT" WIDTH="3%">00</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="9%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;18,0</TD>
               <TD ALIGN="LEFT" WIDTH="9%">00</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Average amount of borrowings
                 outstanding during the period (in thousands)</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="12%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;40,7</TD>
               <TD ALIGN="LEFT" WIDTH="3%">76</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="9%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1,7</TD>
               <TD ALIGN="LEFT" WIDTH="9%">37</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Average amount of borrowings
                 outstanding per share during the period</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="12%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.70</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="9%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="9%">.16</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B></B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="9"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B>Supplemental</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Net assets, end of period (in
                 thousands)</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT"
                 WIDTH="12%">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;103,0</TD>
               <TD ALIGN="LEFT" WIDTH="3%">79</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">110,6</TD>
               <TD ALIGN="LEFT" WIDTH="9%">58</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%"><B>Data:</B></TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">Portfolio turnover</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="12%">50</TD>
               <TD ALIGN="LEFT" WIDTH="3%">.07%</TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" WIDTH="9%">50</TD>
               <TD ALIGN="LEFT" WIDTH="9%">.99%</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" WIDTH="11%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="51%">&nbsp;</TD>
               <TD ALIGN="LEFT" WIDTH="1%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
               <TD ALIGN="LEFT" WIDTH="2%">&nbsp;</TD>
               <TD ALIGN="RIGHT" COLSPAN="2"> <HR NOSHADE> </TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT" COLSPAN="9"> <HR NOSHADE SIZE="1"> </TD>
              </TR>
             </TABLE>
             <P>&nbsp;</P>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I> * </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Annualized. </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>** </I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Total investment returns
                 based on market value, which can be significantly greater or
                 lesser than the net asset value, may result in substantially
                 different returns. Total investment returns exclude the
                 effects of sales charges. </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>+</I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Commencement of operations.
                 </I></P>
               </TD>
              </TR>
             </TABLE>
             <TABLE WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR VALIGN="TOP">
               <TD ALIGN="LEFT" WIDTH="3%"><I>++</I></TD>
               <TD WIDTH="97%"> <P ALIGN="LEFT"><I>Aggregate total investment
                 return. </I></P>
               </TD>
              </TR>
             </TABLE>
             <P>See Notes to Financial Statements. </P>
             <P ALIGN="center">F-55 </P>
             <P ALIGN="left"><FONT
             SIZE="2"></FONT></P>
             <P ALIGN="right"><B>Debt Strategies Fund III, Inc., February 29,
               2000 </B></P>
             <P ALIGN="LEFT">&nbsp;</P>
             <P ALIGN="LEFT"><B>NOTE TO FINANCIAL STATEMENTS </B></P>
             <P ALIGN="LEFT">1. Significant Accounting Policies: </P>
             <P ALIGN="LEFT">Debt Strategies Fund III, Inc. (the
               &quot;Fund&quot;) is registered under the Investment Company Act
               of 1940 as a diversified, closed-end management investment
               company. The Fund's financial statements are prepared in
               accordance with generally accepted accounting principles, which
               may require the use of management accruals and estimates. The
               Fund determines and makes available for publication the net
               asset value of its Common Stock on a weekly basis. The Fund's
               Common Stock is listed on the New York Stock Exchange under the
               symbol DBU.</P>
             <P ALIGN="LEFT"><I>(a) Corporate debt obligations</I><B> </B>- The
               Fund invests principally in debt obligations of companies,
               including corporate loans made by banks and other financial
               institutions and both privately and publicly offered corporate
               bonds and notes. Because agents and intermediaries are primarily
               commercial banks, the Fund's investment in corporate loans could
               be considered concentrated in financial institutions. </P>
             <P ALIGN="LEFT"><I>(b) Valuation of investments</I><B> </B>-
               Corporate Loans are valued in accordance with guidelines
               established by the Board of Directors. Until July 9, 1999,
               Corporate Loans for which an active secondary market exists and
               for which the Investment Adviser can obtain at least two
               quotations from banks or dealers in Corporate Loans were valued
               by calculating the mean of the last available bid and asked
               prices in the markets for such Corporate Loans, and then using
               the mean of those two means. If only one quote for a particular
               Corporate Loan was available, such Corporate Loan was valued on
               the basis of the mean of the last available bid and asked prices
               in the market. As of July 12, 1999, pursuant to the approval of
               the Board of Directors, the Corporate Loans are valued at the
               mean between the last available bid and asked prices from one or
               more brokers or dealers as obtained from Loan Pricing
               Corporation. For Corporate Loans for which an active secondary
               market does not exist to a reliable degree in the opinion of the
               Investment Adviser, such Corporate Loans will be valued by the
               Investment Adviser at fair value, which is intended to
               approximate market value. </P>
             <P ALIGN="LEFT">Other portfolio securities may be valued on the
               basis of prices furnished by one or more pricing services, which
               determine prices for normal, institutional-size trading units of
               such securities using market information, transactions for
               comparable securities and various relationships between
               securities that are generally recognized by institutional
               traders. In certain circumstances, portfolio securities are
               valued at the last sale price on the exchange that is the
               primary market for such securities, or the last quoted bid price
               for those securities for which the over-the-counter market is
               the primary market or for listed securities in which there were
               no sales during the day. The value of interest rate swaps, caps
               and floors is determined in accordance with a formula and then
               confirmed periodically by obtaining a bank quotation. Positions
               in options are valued at the last sale price on the market where
               any such option is principally traded. Short-term securities
               with remaining maturities of sixty days or less are valued at
               amortized cost, which approximates market value. Securities and
               assets for which market price quotations are not readily
               available are valued at fair value as determined in good faith
               by or under the direction of the Board of Directors of the Fund.
               </P>
             <P ALIGN="LEFT"><I>(c) Derivative financial instruments</I> - The
               Fund may engage in various portfolio strategies to seek to
               increase its return by hedging its portfolio against adverse
               movements in the debt markets. Losses may arise due to changes
               in the value of the contract or if the counterparty does not
               perform under the contract. </P>
             <UL> <P>&#183; <I>Financial futures contracts</I> - The Fund may
               purchase or sell financial futures contracts and options on such
               futures contracts for the purpose of hedging the market risk on
               existing securities or the intended purchase of securities.
               Futures contracts are contracts for delayed delivery of
               securities at a specific future date and at a specific price or
               yield. Upon entering into a contract, the Fund deposits and
               maintains as collateral such initial margin as required by the
               exchange on which the transaction is effected. Pursuant to the
               contract, the Fund agrees to receive from or pay to the broker
               an amount of cash equal to the daily fluctuation in value of the
               contract. Such receipts or payments are known as variation </P>
             </UL>
             <P ALIGN="center">F-56</P>
             <P ALIGN="LEFT"></P>
             <P ALIGN="LEFT">margin and are recorded by the Fund as unrealized
               gains or losses. When the contract is closed, the Fund records a
               realized gain or loss equal to the difference between the value
               of the contract at the time it was opened and the value at the
               time it was closed.
             <BR>
             </P>

             <TABLE WIDTH="100%" BORDER="0">
              <TR VALIGN="top">
               <TD WIDTH="3%">&#183;</TD>
               <TD COLSPAN="2"><I>Forward foreign exchange contracts</I> - The
                 Fund is authorized to enter into forward foreign exchange
                 contract as a hedge against either specific transactions or
                 portfolio positions. Such contracts are not entered on the
                 Fund's records. However, the effect on operations is recorded
                 from the date the Fund enters into&nbsp;such contracts. </TD>
              </TR>
              <TR VALIGN="top">
               <TD WIDTH="3%">&#183;</TD>
               <TD WIDTH="97%" COLSPAN="2"><I>Options</I> - The Fund is
                 authorized to write covered call and put options and purchase
                 call and put options. When the Fund writes an option, an
                 amount equal to the premium received by the Fund is reflected
                 as an asset and an equivalent liability. The amount of the
                 liability is subsequently marked to market to reflect the
                 current market value of the option written. When a security is
                 purchased or sold through an exercise of an option, the
                 related premium paid (or received) is added to (or deducted
                 from) the basis of the security acquired or deducted from (or
                 added to) the proceeds of the security sold. When an option
                 expires (or the Fund enters into a closing transaction), the
                 Fund realizes again or loss on the option to the extent of the
                 premiums received or paid (or gain or loss to the extent the
                 cost of the closing transaction exceeds the premium paid or
                 received). </TD>
              </TR>
             </TABLE>
             <P ALIGN="LEFT">Written and purchased options are non-income
               producing investments. </P>

             <TABLE WIDTH="100%" BORDER="0">
              <TR VALIGN="top">
               <TD WIDTH="3%">&#183;</TD>
               <TD WIDTH="97%" COLSPAN="2"><I>Interest rate transactions</I> -
                 The Fund is authorized to enter into interest rate swaps and
                 purchase or sell interest rate caps and floors. In an interest
                 rate swap, the Fund exchanges with another party their
                 respective commitments to pay or receive interest on a
                 specified notional principal amount. The purchase of an
                 interest rate cap (or floor) entitles the purchaser, to the
                 extent that a specified index exceeds (or falls below) a
                 predetermined interest rate, to receive payments of interest
                 equal to the difference between the index and the
                 predetermined rate on a notional principal amount from the
                 party selling such interest rate cap (or floor). </TD>
              </TR>
             </TABLE>
             <P ALIGN="LEFT">d) <I>Foreign currency transactions</I> -
               Transactions denominated in foreign currencies are recorded at
               the exchange rate prevailing when recognized. Assets and
               liabilities denominated in foreign currencies are valued at the
               exchange rate at the end of the period. Foreign currency
               transactions are the result of settling (realized) or valuing
               (unrealized) assets or liabilities expressed in foreign
               currencies into US dollars. Realized and unrealized gains or
               losses from investments include the effects of foreign exchange
               rates on investments. </P>
             <P ALIGN="LEFT">(e) <I>Income taxes</I> - It is the Fund's policy
               to comply with the requirements of the Internal Revenue Code
               applicable to regulated investment companies and to distribute
               substantially all of its taxable income to its shareholders.
               Therefore, no Federal income tax provision is required. Under
               the applicable foreign tax law, a withholding tax maybe imposed
               on interest, dividends and capital gains at various rates. </P>
             <P ALIGN="LEFT">(f) <I>Security transactions and investment
               income</I> - Security transactions are recorded on the dates the
               transactions are entered into (the trade dates). Dividend income
               is recorded on the ex-dividend dates. Interest income (including
               amortization of discount) is recognized on the accrual basis.
               Realized gains and losses on security transactions are
               determined on the identified cost basis. Facility fees are
               accreted to income over the term of the related loan. </P>
             <P ALIGN="LEFT">(g) <I>Deferred organization and offering expenses
               </I>- In accordance with Statement of Position 98-5, any
               unamortized organization expenses of $19,027 were expensed
               during the year ended February 29, 2000. This was considered to
               be a change in accounting principal and had no material impact
               on the operations of the Fund. Direct expenses relating to the
               public offering of the Fund's Common Stock were charged to
               capital at the time of issuance of the shares. </P>
             <P ALIGN="LEFT">(h) <I>Dividends and distributions</I> - Dividends
               from net investment income are declared and paid monthly.
               Distributions of capital gains are recorded on the ex-dividend
               dates. </P>
             <P ALIGN="center">F-57 </P>
             <P ALIGN="left"></P>
             <P ALIGN="right"><B>Debt Strategies Fund III, Inc., February 29,
               2000 </B></P>
             <P ALIGN="center"><B>NOTES TO FINANCIAL STATEMENTS</B>
               <I>(concluded) </I></P>
             <P ALIGN="LEFT"><I>(i) Custodian bank</I> - The Fund recorded an
               amount payable to the custodian bank reflecting an overnight
               overdraft which resulted from an unprojected payment of net
               investment income dividends. </P>
             <P ALIGN="LEFT"><I>(j) Reclassification</I> - Generally accepted
               accounting principles require that certain components of net
               assets beadjusted to reflect permanent differences between
               financial and tax reporting. Accordingly, current year's
               permanent book/tax differences of $39,583 have been reclassified
               between undistributed net investment income and accumulated net
               realized capital losses. These reclassifications have no effect
               on net assets or net asset value per share. </P>
             <P ALIGN="LEFT"><B>2. Investment Advisory Agreement and
               Transactions with Affiliates: </B> </P>
             <P ALIGN="LEFT">The Fund has entered into an Investment Advisory
               Agreement with Fund Asset Management, L.P. (&quot;FAM&quot;).
               The general partner of FAM is Princeton Services, Inc.
               (&quot;PSI&quot;), an indirect wholly-owned subsidiary of
               Merrill Lynch & Co., Inc. (&quot;ML &Co.&quot;), which is the
               limited partner. </P>
             <P ALIGN="LEFT">FAM is responsible for the management of the
               Fund's portfolio and provides the necessary personnel,
               facilities, equipment and certain other services necessary to
               perform the investment advisory function. For such services the
               Fund pays a monthly fee at an annual rate of .60% of the Fund's
               average weekly net assets plus the proceeds of any outstanding
               borrowings used for leverage. </P>
             <P ALIGN="LEFT">For the year ended February 29, 2000, the Fund
               paid Merrill Lynch Security Pricing Service, an affiliate of
               Merrill Lynch, Pierce, Fenner & Smith Incorporated, $342 for
               security price quotations to compute the net asset value of the
               Fund. </P>
             <P ALIGN="LEFT">Accounting services are provided to the Fund by
               FAM at cost. </P>
             <P ALIGN="LEFT"> Certain officers and/or directors of the Fund are
               officers and/or directors of FAM, PSI, and/or ML & Co. </P>
             <P ALIGN="LEFT"><B>3. Investments: </B></P>
             <P ALIGN="LEFT">Purchases and sales of investments, excluding
               short-term securities, for the year ended February 29, 2000 were
               $90,537,370 and $72,650,709, respectively. Net realized gains
               (losses) for the year ended February 29, 2000 and net unrealized
               losses as of February 29, 2000 were as follows: </P>

             <TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" WIDTH="70%">
              <TR VALIGN="BOTTOM">
               <TH COLSPAN="2"></TH>
               <TH COLSPAN="2">Realized
               <BR>
               Gains (Losses) <HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE> </TH>
               <TH COLSPAN="2">Unrealized
               <BR>
               Losses <HR WIDTH=100% SIZE=1 COLOR=BLACK NOSHADE> </TH>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD WIDTH="54%" ALIGN="LEFT">Long-term investments</TD>
               <TD WIDTH="4%" ALIGN="LEFT">&nbsp;</TD>
               <TD WIDTH="17%" ALIGN="RIGHT">$(1,864,868</TD>
               <TD WIDTH="6%" ALIGN="LEFT">)</TD>
               <TD WIDTH="17%" ALIGN="RIGHT">$(5,944,497</TD>
               <TD WIDTH="2%" ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">Foreign currency transactions</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">(28,701</TD>
               <TD ALIGN="LEFT">)</TD>
               <TD ALIGN="RIGHT">&#151;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">Forward foreign exchange contracts</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">68,284</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">&#151;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="1"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">Total</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT">$(1,825,285</TD>
               <TD ALIGN="LEFT">)</TD>
               <TD ALIGN="RIGHT">$(5,944,497</TD>
               <TD ALIGN="LEFT">)</TD>
              </TR>
              <TR VALIGN="BOTTOM">
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="2"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
               <TD ALIGN="RIGHT"> <HR NOSHADE ALIGN="right" WIDTH="80%"
                 SIZE="2"> </TD>
               <TD ALIGN="LEFT">&nbsp;</TD>
              </TR>
             </TABLE>
             <P ALIGN="LEFT">As of February 29, 2000, net unrealized
               depreciation for Federal income tax purposes aggregated
               $5,956,750, of which $1,585,335 related to appreciated
               securities and $7,542,085 related to depreciated securities. The
               aggregate cost of investments at February 29, 2000 for Federal
               income tax purposes was $144,880,405. </P>
             <P ALIGN="LEFT"><B>4. Capital Stock Transactions: </B></P>
             <P ALIGN="LEFT">The Fund is authorized to issue 200,000,000 shares
               of Common Stock, par value $.10 per share. Shares issued and
               outstanding during the year ended February 29, 2000 remained
               constant and for the period July 31, 1998 to February 28, 1999
               increased by 11,000,000 from shares sold. </P>
             <P ALIGN="LEFT"><B>5. Short-Term Borrowings: </B></P>
             <P ALIGN="LEFT">On December 17, 1999, the Fund extended its
               one-year credit agreement with State Street Bank and Trust
               Company and Fleet National Bank. The agreement is a $55,000,000
               credit facility bearing interest at the Prime rate, the Federal
               Funds rate plus .55% and/or Eurodollar rate plus .55%. For the
               year ended February 29, 2000, the average amount borrowed was
               approximately $40,776,000 and the daily weighted average
               interest rate was 5.80%. For the year ended February 29, 2000,
               facility and commitment fees aggregated $34,000. </P>
             <P ALIGN="CENTER">F-58 </P>
             <P ALIGN="left"></P>
             <P ALIGN="LEFT"><B>6. Capital Loss Carryforward: </B></P>
             <P ALIGN="LEFT">At February 29, 2000, the Fund had a net capital
               loss carry forward of approximately $133,000, all of which
               expires in 2008. This amount will be available to offset like
               amounts of any future taxable gains. </P>
             <P ALIGN="LEFT"><B>7. Subsequent Event: </B></P>
             <P ALIGN="LEFT">On March 7, 2000, the Fund's Board of Directors
               declared an ordinary income dividend to Common Stock
               shareholders in the amount of $.095233 per share, payable on
               March 31, 2000 to shareholders of record as of March 17, 2000.
               </P>
             <P ALIGN="CENTER">F-59 </P>
             <P ALIGN="left"></P>
             <P ALIGN="CENTER">&nbsp;</P>
             <P ALIGN="left"></P>
             <P ALIGN="CENTER">[This page is intentionally left blank.] </P>
             <P ALIGN="CENTER">F-60 </P>
             <P ALIGN="left"></P>
             <P ALIGN="CENTER">
             <A NAME="4"></A>
             Pro Forma Unaudited Financial Statements
             <BR>
             for the Surviving Fund
             <BR>
             as of February 29, 2000 </P>
             <P ALIGN="CENTER">F-61 </P>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               <B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="905" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Advertising&nbsp;&#151;&nbsp;0.7%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;3,300,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Adams
                 Outdoor Advertising Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.75% due 3/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;1,348,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;1,037,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;1,037,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;3,423,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Outdoor
                 Systems Inc., 8.875% due 6/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,060,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,060,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,348,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,097,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,037,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,483,750</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Agricultural Products&nbsp;&#151;&nbsp;0.4%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Sun
                 World International, Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.25% due 4/15/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,037,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,037,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Aircraft &amp; Parts&nbsp;&#151;&nbsp;0.9%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Argo-Tech Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.625% due 10/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,050,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">410,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,460,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">BE
                 Aerospace, 9.50% due 11/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">921,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">460,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,381,875</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,970,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Compass
                 Aerospace Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.125% due 4/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,136,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">450,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,586,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,107,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,320,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,428,375</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Amusement &amp; Recreational
               <BR>
               Services&nbsp;&#151;&nbsp;3.2%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">AMC
                 Entertainment Inc.:</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,700,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.50%
                 due 3/15/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">765,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,874,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">191,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,830,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,450,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.50%
                 due 2/01/2011</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">641,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">302,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">151,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,094,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,095,236</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">American Ski, Term, due 5/31/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,033,331</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,033,331</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,675,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Carmike
                 Cinemas Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.375% due 2/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">356,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">150,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,256,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Hollywood Entertainment,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.625% due 8/15/2004(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,715,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">452,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,167,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,912,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Kerasotes Theatres, Inc., Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 12/31/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,900,219</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,900,219</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Baa3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Metro
                 Goldwyn Mayer Co. (MGM), Term A,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 3/31/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,908,335</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,908,335</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,800,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Loews
                 Cineplex Entertainment,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.875% due 8/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,007,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">387,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,395,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,350,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Riddell
                 Sports, Inc., 10.50% due 7/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,814,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,814,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">SFX
                 Entertainment, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 6/30/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,001,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,001,750</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">15,814,550</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,254,835</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,332,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,401,635</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Apparel
                 &#151; 1.1%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Arena
                 Brands, Inc.**:</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,274,060</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term A,
                 due 6/01/2002</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,180,098</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,180,098</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,037,440</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 6/01/2002</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,817,226</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,817,226</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">CS
                 Brooks Canada, Inc., Term,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 6/25/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,225,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,985,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,210,625</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,175,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">GFSI
                 Inc., 9.625% due 3/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">705,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">705,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,225,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,702,324</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,985,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,912,949</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Automotive Equipment&nbsp;&#151;&nbsp;5.3%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">American Axle and Manufacturing Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.75% due 3/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,196,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">740,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,937,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">D</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,123,838</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&#134;Breed Technologies Inc., Revolving Credit,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 4/27/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">319,081</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">340,612</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">659,693</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="905" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Automotive
                 Equipment&nbsp;&#151;&nbsp;(concluded)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CC</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ca</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;3,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Cambridge Industries Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.25% due 7/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;630,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;630,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Citation Corporation, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 12/01/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,980,626</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">990,313</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">495,157</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,466,096</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,385,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Collins
                 &amp; Aikman Corp., Term C,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 12/31/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,847,411</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,477,112</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,324,523</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Group 1
                 Automotive Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.875% due 3/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,252,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">472,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,725,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Hayes
                 Lemmerz International Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.25% due 12/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">436,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">436,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Holley
                 Performance Products,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.25% due 9/15/2007(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,104,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,104,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,850,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Key
                 Plastics, Inc., 10.25% due 3/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">592,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">640,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,232,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Newcor
                 Inc., 9.875% due 3/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,770,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">590,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,360,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Safelite Glass Corp.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,102,243</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 12/23/2003**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,119,912</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,119,912</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,239,824</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,102,243</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 12/23/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,119,912</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,119,912</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,239,824</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,400,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Special
                 Devices Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.375% due 12/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,394,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">646,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">272,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,312,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,375,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Tenneco
                 Inc., 11.625% due 10/15/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,286,563</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">762,187</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">381,094</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,429,844</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Venture
                 Holdings Trust:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,800,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.50%
                 due 7/01/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,638,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,638,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,450,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">12% due
                 6/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">680,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">340,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">212,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,232,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="91" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">32,070,880</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,205,186</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,690,988</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">45,967,054</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="91" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Broadcast&nbsp;&#151;&nbsp;Radio &amp;
               <BR>
               Television&nbsp;&#151;&nbsp;8.0%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ackerley Group Inc., 9% due 1/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,600,781</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,760,094</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,076,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,437,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Acme
                 Television/Finance,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.875% due 9/30/2004(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">881,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">881,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Albritton Communications,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.75% due 11/30/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">485,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">485,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Benedek
                 Broad, Term, due 11/20/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,992,190</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,497,657</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,489,847</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Capstar
                 Broadcasting,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.25% due 7/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,080,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,080,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Citadel
                 Broadcasting Company,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.25% due 11/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,632,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">288,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,920,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Corus
                 Entertainment, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 8/31/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,015,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,015,625</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Cumulus
                 Media, Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10.375%
                 due 7/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,040,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,040,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 9/30/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,206,376</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,206,376</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">800,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 2/28/2008**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">804,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">804,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,800,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Gocom
                 Communications, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 12/31/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,189,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,795,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">798,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,783,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,525,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Granite
                 Braodcasting,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.375% due 12/01/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,448,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,448,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="263" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Jones
                 International Networks Ltd.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.75% due 7/01/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,261,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,261,250</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="904" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Broadcast&nbsp;&#151;&nbsp;Radio &amp;
                 Television&nbsp;&#151;&nbsp;(concluded)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$24,525,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Radio
                 Unica Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;14.636% due 8/01/2006(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;11,872,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;2,032,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;1,792,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;15,696,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Sirius
                 Satellite, 14.50% due 5/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,846,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,399,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">579,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,825,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,650,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Spanish
                 Broadcasting System,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.625% due 11/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,161,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,965,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">442,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,568,625</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Young
                 Broadcasting Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.75% due 6/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,335,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,335,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">41,390,347</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">19,413,719</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,473,407</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">69,277,473</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Building &amp;
                 Construction&nbsp;&#151;&nbsp;0.3%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,775,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Webb
                 (Del E.) Corp., 10.25% due 2/15/2010</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,396,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">741,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">283,562</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,421,187</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Building Materials&nbsp;&#151;&nbsp;2.4%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Amatek
                 Industries, 12% due 2/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,593,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">987,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,580,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,920,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Dal-Tile International Inc., Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 12/31/2003**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,843,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,843,125</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Republic Group Inc., 9.50% due 7/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,590,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">810,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,400,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">EUR&nbsp;&nbsp;1,150,407</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Schulte
                 GmbH &amp; Co. KG, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 12/02/2003**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">612,263</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">489,810</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,102,073</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;&nbsp;3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Trussway Industries, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 7/08/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,985,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,985,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">13,780,263</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,332,935</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,797,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">20,910,198</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Business Services&nbsp;&#151;&nbsp;0.7%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,375,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Muzak
                 Holdings LLC,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;13% due 3/15/2010(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,125,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,625,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Cable
                 Television Services&nbsp;&#151;&nbsp;10.9%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">CSC
                 Holdings Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,525,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">7.25%
                 due 7/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">956,889</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">466,775</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,423,664</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,925,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">7.625%
                 due 7/15/2018</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,174,090</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">598,556</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,772,646</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Charter
                 Communications Holdings LLC:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,700,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">8.625%
                 due 4/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,548,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,274,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">455,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,277,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10% due
                 4/01/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,968,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,968,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,937,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 8.64% due 3/18/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,014,665</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,014,665</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Classic
                 Cable Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,725,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.375%
                 due 8/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">937,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">445,312</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">234,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,617,187</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10.50%
                 due 3/01/2010(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,928,656</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,251,562</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">575,719</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,755,937</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,342,105</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 1/31/2008**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,608,520</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,739,013</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,347,533</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Coaxial
                 Communications/Phoenix,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10% due 8/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">956,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,346,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,303,125</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">20,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Coaxial
                 LLC, 12.875% due 8/15/2008(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,625,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">625,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">12,500,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,300,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Comcast
                 Corp., 9.375% due 5/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,507,604</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,507,604</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Echostar DBS Corporation:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.25%
                 due 2/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">877,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">390,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">195,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,462,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,950,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.375%
                 due 2/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,129,937</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,881,687</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">782,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,793,624</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Globo
                 Comunicacoes e Participacoes, Ltd.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.625% due 12/05/2008(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">863,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">863,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Golden
                 Sky Systems,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.375% due 8/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,696,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">828,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,525,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Insight
                 Midwest/Insight Capital,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.75% due 10/01/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,010,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,010,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">505,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,525,000</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="905" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Cable
                 Television Services&nbsp;&#151;&nbsp;(concluded)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Multicanal SA, 10.50% due 4/15/2018</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;1,615,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;1,615,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Park N
                 View Inc., 13% due 5/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">350,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">350,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Pegasus
                 Communications:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">950,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.75%
                 due 12/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">434,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">241,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">241,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">916,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term,
                 due 4/30/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,005,834</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,504,376</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">501,459</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,011,669</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">RCN
                 Corporation, 10.125% due 1/15/2010</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">465,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">465,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">930,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">D</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&#134;Supercanal Holdings SA,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.50% due 5/15/2005(a)(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,180,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">590,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,770,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Telewest Communications PLC:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11.25%
                 due 11/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,062,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,062,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,125,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,100,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.875%
                 due 2/01/2010(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,804,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,602,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">700,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,107,625</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">United
                 Pan-European Communications NV,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.25% due 2/01/2010(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,518,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,022,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,541,250</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">59,604,445</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">24,245,781</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,143,803</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">94,994,029</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Chemicals&nbsp;&#151;&nbsp;5.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Baa3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Equistar Chemicals LP, 8.75% due 2/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,873,800</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,949,520</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">974,760</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,798,080</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Huntsman Corp.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.38%
                 due 7/01/2007(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,460,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,460,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,086,326</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term,
                 due 12/31/2002**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,074,156</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,074,156</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,442,437</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 3/15/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,445,126</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,445,126</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Huntsman Corp./ICI Chemical**:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 6/30/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">755,893</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">755,893</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 6/30/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">755,893</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">755,893</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,175,707</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Koppers
                 Industries, Inc., Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 11/30/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,157,438</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,157,438</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ca</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,700,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">LaRoche
                 Industries Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.50% due 9/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">810,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">810,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">12,902,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Lyondell Petrochemical Co., Term E,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 5/17/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,094,954</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,094,954</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,056,972</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">13,246,880</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,811,533</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Pioneer
                 American Holding Corporation, Term,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 12/05/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,350,938</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,728,356</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,079,294</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">18,381,318</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">16,855,412</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,346,030</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">44,582,760</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Computer&nbsp;&#151;&nbsp;Related
               <BR>
               Products&nbsp;&#151;&nbsp;0.8%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,761,573</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Bridge
                 Information Systems, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 5/29/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,072,204</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,443,322</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,515,526</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Consumer Products&nbsp;&#151;&nbsp;0.7%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,125,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Burhmann NV, Term B, due 10/26/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">755,906</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">377,953</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,133,859</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Diamond
                 Brands Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.875% due 4/15/2009(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,100,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Diamond
                 Brands Operating,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.125% due 4/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,470,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,470,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,475,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Evenflo
                 Company Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.75% due 8/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,188,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">242,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,430,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Home
                 Products International Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.625% due 5/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,192,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">607,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,800,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,350,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,363,406</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">620,453</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,334,609</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="905" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Diversified&nbsp;&#151;&nbsp;0.2%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;1,995,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Blount
                 Inc., Term B, due 6/30/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;2,007,469</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;2,007,469</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Drilling&nbsp;&#151;&nbsp;4.0%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Cliffs
                 Drilling, 10.25% due 5/15/2003</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,975,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,985,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,985,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,945,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Falcon
                 Drilling Co. Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.75% due 1/15/2001</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,483,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Key
                 Energy Services Inc., Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 9/14/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,996,852</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,499,055</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,495,907</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Parker
                 Drilling Co.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">5.50%
                 due 8/01/2004 (Convertible)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,825,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,825,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,025,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.75%
                 due 11/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,928,937</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,381,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">476,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,786,312</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">RBF
                 Finance Company:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,675,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11% due
                 3/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,149,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">600,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,750,375</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11.375%
                 due 3/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,452,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">265,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,378,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,095,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">20,327,289</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,232,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,338,305</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">34,897,594</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Drug
                 Stores&nbsp;&#151;&nbsp;0.2%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,450,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Duane
                 Reade Co., Term B, due 2/15/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,450,767</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,450,767</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Educational Services&nbsp;&#151;&nbsp;0.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,325,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">La
                 Petite Academy/LPA Holdings,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10% due 5/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">874,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">874,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Electronics/Electrical
               <BR>
               Components&nbsp;&#151;&nbsp;3.2%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,768,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Advanced Glassfiber Yarn,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.875% due 1/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,783,040</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,730,520</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">713,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,226,560</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Amkor
                 Technologies Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.25% due 5/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,455,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,940,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,395,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,387,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">BGF
                 Industries Inc., 10.25% due 1/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,878,495</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">859,185</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">361,425</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,099,105</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Chippac
                 International, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 7/31/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">999,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">999,375</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,970,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Dynamic
                 Details, Term B, due 4/22/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,929,619</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,929,619</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,875,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Filtronic PLC, 10% due 12/01/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,523,812</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">290,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,814,062</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Flextronics International Ltd.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.75% due 10/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,058,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">716,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,775,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,995,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">High
                 Voltage Engineering,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.50% due 8/15/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">817,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">813,412</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,630,912</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,214,286</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Viasystems, Revolving Credit,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 11/30/2002**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,190,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,190,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">19,818,091</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,347,205</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,894,337</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">28,059,633</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Energy&nbsp;&#151;&nbsp;3.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Belco
                 Oil &amp; Gas Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.875% due 9/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,860,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">465,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,325,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,550,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Belden
                 &amp; Blake Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.875% due 6/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">275,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,775,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Canadian Forest Oil Ltd.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.75% due 9/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">465,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">465,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Chesapeake Energy Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.625% due 5/01/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">945,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">472,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,417,500</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="905" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Energy&nbsp;&#151;&nbsp;(concluded)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;1,900,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Continental Resources,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.25% due 8/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;1,211,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;593,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;1,805,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Cross
                 Timbers Oil Company,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.75% due 11/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,835,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,835,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Energy
                 Corp. of America,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.50% due 5/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,828,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">479,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,307,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Forest
                 Oil Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.50% due 1/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,777,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,020,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">252,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,050,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,850,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Gothic
                 Production Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.125% due 5/01/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,540,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,540,125</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Gulf
                 Canada Resources Ltd.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.25% due 1/15/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,008,360</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,008,360</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Nuevo
                 Energy Company,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.50% due 6/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,925,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">975,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">487,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,387,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,631,122</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Plain
                 Scurlock, Term B, due 5/12/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,612,772</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,612,772</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">13,114,897</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,792,110</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,621,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">26,528,757</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Environmental Services&nbsp;&#151;&nbsp;0.5%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,800,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">IT
                 Group Inc., 11.25% due 4/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,712,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,712,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">URS
                 Corporation:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,492,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 6/09/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,003,084</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">501,542</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,504,626</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,492,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 6/09/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,003,084</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">501,542</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,504,626</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,006,168</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,712,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,003,084</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,721,502</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Financial Services&nbsp;&#151;&nbsp;3.8%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Ares
                 Leveraged Fund II,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.15% due 10/31/2005(c)(e)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,723,700</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,723,700</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,944,604</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Blackstone Capital, Term, due 11/30/2000**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,403,915</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,503,604</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,907,519</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Investcorp SA, 7.54% due 10/21/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">993,830</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">496,915</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,490,745</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Lodgian
                 Financing Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.25% due 7/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,820,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,820,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Pennant
                 CBO Limited,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;13.43% due 3/14/2011(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">990,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">990,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,980,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">SKM&nbsp;&#151;&nbsp;Libertyview CBO
                 Limited(f):</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Baa2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">1A-C1,
                 8.71% due 4/10/2011</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,314,585</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,314,585</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">1A-D,
                 11.91% due 4/10/2011</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">877,031</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">877,031</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Sovereign Bank, Term, due 11/17/2003**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,021,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,008,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,004,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,035,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,856,307</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Wasserstein, Term, due 11/30/2000**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,360,988</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,458,896</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,819,884</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,175,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Willis
                 Corroon Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9% due 2/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,520,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,140,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">480,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,140,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">17,014,308</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">14,609,781</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,484,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">33,108,464</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Food
                 &amp; Kindred Products&nbsp;&#151;&nbsp;4.3%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">B &amp;
                 G Foods, Term B, due 3/15/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,245,938</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">998,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,244,688</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Envirodyne Industries,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.25% due 12/01/2001</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="278" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">GoldenState Foods, Term, due 5/01/2008**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,468,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,468,750</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="904" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Food
                 &amp; Kindred Products&nbsp;&#151;&nbsp;(concluded)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;8,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Luigino&#146;s Inc., 10% due 2/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;6,150,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;410,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;6,560,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">SC
                 International Services, Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.25% due 9/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,840,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,840,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">920,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,600,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Specialty Foods, Inc.**:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,480,154</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Revolving Credit, due 1/31/2001</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,554,785</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,823,137</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,069,831</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,447,753</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,883,503</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term,
                 due 1/31/2001</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,056,171</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,839,541</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,895,712</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,127,011</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term A,
                 due 1/31/2001</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,134,829</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,134,829</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,048,550</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term N,
                 due 1/31/2001</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,056,171</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,056,171</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">20,903,065</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,266,716</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,238,122</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">37,407,903</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Forest
                 Products&nbsp;&#151;&nbsp;1.2%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ainsworth Lumber Company,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.50% due 7/15/2007(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,155,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,232,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,387,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Millar
                 Western Forest,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.875% due 5/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">641,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">345,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">493,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,481,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Tembec
                 Finance Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.875% due 9/30/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,515,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,515,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Uniforet Inc., 11.125% due 10/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">450,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,350,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,800,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,246,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,443,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">493,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,183,750</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Furniture &amp;
                 Fixtures&nbsp;&#151;&nbsp;0.6%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,850,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Formica
                 Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.875% due 3/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,031,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,593,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">553,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,177,250</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Gaming&nbsp;&#151;&nbsp;6.0%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Aladdin
                 Gaming:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 8/26/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,782,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,782,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 2/26/2008**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,173,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,173,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ameristar Casinos, Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.50% due 8/01/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,207,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,207,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,475,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Argosy
                 Gaming Company,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.75% due 6/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,644,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">565,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">333,937</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,543,062</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,700,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Coast
                 Hotels &amp; Casino,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.50% due 4/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,546,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">703,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">281,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,531,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Eldorado Resorts LLC,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.50% due 8/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,465,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Harvey
                 Casino Resorts,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.625% due 6/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,587,787</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,027,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,615,287</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Hollywood Park Inc.,</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,300,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.25%
                 due 2/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,306,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">677,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">241,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,225,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.50%
                 due 8/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,667,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">242,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,910,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Horseshoe Gaming LLC,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.375% due 6/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,901,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">290,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,191,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">925,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Horseshoe Gaming Holdings,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.625% due 5/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">576,562</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">276,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">853,312</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,560,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Isle of
                 Capri Casinos, 8.75% due 4/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,704,525</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,187,575</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">921,700</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,813,800</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Majestic Star LLC, 10.875% due 7/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,360,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,360,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,150,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Peninsula Gaming LLC,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.25% due 7/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,236,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,236,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,325,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Trump
                 Atlantic City Associates/Funding Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.25% due 5/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,326,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">255,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,581,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">38,347,562</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,305,637</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,370,762</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">52,023,961</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="906" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Grocery&nbsp;&#151;&nbsp;0.6%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Grand
                 Union Co., Term, due 8/17/2003**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;4,975,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;4,975,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Health
                 Care Providers&nbsp;&#151;&nbsp;0.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">968,640</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CareMark, Term B, due 6/08/2001**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">908,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">908,100</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Hotels
                 &amp; Motels&nbsp;&#151;&nbsp;4.0%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Extended Stay America, 9.15% due 3/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,355,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">446,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">446,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,247,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,800,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">HMH
                 Properties, Inc., 8.45% due 12/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">718,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">897,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,615,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Starwood Hotels &amp; Resorts Trust, Term 2,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 2/23/2003**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,011,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,003,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,015,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Wyndam
                 International:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term,
                 due 6/29/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,415,702</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">987,031</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,402,733</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">15,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term,
                 due 6/30/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">13,147,502</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,947,778</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">15,095,280</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,929,454</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,164,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,282,309</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">34,376,013</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Industrial Services&nbsp;&#151;&nbsp;0.5%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">American Plumbing &amp; Mechanic, 11.625% due
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,592,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">455,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,047,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,950,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Building One Services,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.50% due 5/01/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,610,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">782,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">322,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,714,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,202,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,237,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">322,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,761,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Leasing
                 &amp; Rental Services&nbsp;&#151;&nbsp;3.8%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Anthony
                 Crane Rental, Term,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 7/24/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,659,374</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,659,374</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Avis
                 Rent A Car:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 6/30/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,523,153</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,509,923</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,033,076</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 6/30/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,525,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,510,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,036,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,930,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Coinmach Laundry Corp., Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 6/30/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,930,818</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,930,818</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,300,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">National Equipment Services,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10% due 11/30/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">530,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">482,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">241,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,254,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Neff
                 Corp., 10.25% due 6/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">450,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">225,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,800,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,475,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,975,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Panavision Inc., 9.78% due 3/31/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,622,606</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,622,606</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,400,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Penhall
                 International, 12% due 8/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">904,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">502,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,407,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">United
                 Rental, Term C, due 8/12/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,996,718</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">998,906</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,995,624</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Universal Hospital Services,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.25% due 3/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">510,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">680,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">170,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,360,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">20,030,688</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,009,012</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,734,548</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">32,774,248</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Manufacturing&nbsp;&#151;&nbsp;4.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Bucyrus
                 International, 9.75% due 9/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,105,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,105,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,930,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Environmental Systems, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 9/30/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,714,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,885,950</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,600,825</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,068,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Fairfield Manufacturing Company Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.625% due 10/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,254,980</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,014,650</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">432,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,701,880</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Metokote Corp., Term B, due 11/02/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,012,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,005,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,017,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ca</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Morris
                 Materials Handling,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.50% due 4/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">855,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">95,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">950,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,600,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Russell-Stanley Holding Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.875% due 2/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,370,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">630,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">261,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,262,000</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="906" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Manufacturing&nbsp;&#151;&nbsp;(concluded)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;4,273,065</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Terex
                 Corporation, Term B, due 3/06/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;4,279,172</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;4,279,172</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">TransTechnology, Term, due 8/31/2009**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,432,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,477,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">492,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,402,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Westinghouse Air Brake,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.375% due 6/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,940,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,940,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">25,859,277</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,227,900</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,171,700</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">35,258,877</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Medical
                 Equipment&nbsp;&#151;&nbsp;1.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,860,947</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Alaris
                 Medical Systems Inc., Term D,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 5/01/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,853,969</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,853,969</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Hanger
                 Ortho, Term B, due 12/30/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,926,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,926,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Hudson
                 Respiratory Care,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.125% due 4/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,200,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Wilson
                 Great Batch, 13% due 7/10/2007(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,162,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,162,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,162,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,780,219</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,142,719</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Metals
                 &amp; Mining&nbsp;&#151;&nbsp;4.9%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,920,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">AEI
                 Resources, Term B, due 12/31/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,609,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">869,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,479,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,922,857</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Acme
                 Metals Inc., Term, due 12/01/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,551,654</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,365,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,916,654</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CC</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ca</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Anker
                 Coal Group, Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.75% due 10/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,400,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,400,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,392,289</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Asarco
                 Incorporated, Term 2,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 5/18/2001**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">794,102</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">397,051</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">198,525</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,389,678</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,600,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Bayou
                 Steel Corp., 9.50% due 5/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">968,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">507,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,476,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,625,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">GS
                 Technologies Operating Co.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12% due 9/01/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">910,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,800,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,710,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">D</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">C</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">+Geneva
                 Steel, 9.50% due 1/15/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">950,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">950,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Golden
                 Northwest Aluminum,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12% due 12/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,190,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">523,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,713,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Great
                 Central Mines Ltd.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.875% due 4/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,620,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,620,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Ispat
                 Inland LP:**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,280,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 7/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,273,386</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,273,386</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,280,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 7/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,273,386</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,273,386</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,400,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Lodestar Holdings Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.50% due 5/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">600,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">600,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,975,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Metal
                 Management Inc., 10% due 5/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,481,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,231,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Ormet
                 Corportation, Term, due 8/15/2008**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,992,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,992,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">550,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Pen
                 Holdings Inc., 9.875% due 6/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Russel
                 Metals Inc., 10% due 6/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,020,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,020,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">WHX
                 Corp., 10.50% due 4/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,700,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,700,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">23,374,881</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">14,286,698</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,584,525</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">42,246,104</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Online
                 Services&nbsp;&#151;&nbsp;0.9%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,400,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">PSINet
                 Inc., 11% due 8/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,428,562</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">676,687</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">300,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,405,999</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Splitrock Services Inc., 11.75% due
                 7/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,195,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,195,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Verio
                 Inc., 11.25% due 12/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,025,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">512,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">256,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,793,750</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,648,562</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,189,187</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">557,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,394,749</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="906" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Packaging&nbsp;&#151;&nbsp;0.8%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Consumers Packaging Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.75% due 2/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;484,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;228,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;142,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;855,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Indesco
                 International,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.75% due 4/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">340,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">340,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Packaging Corp.**:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">319,008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 4/12/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">320,803</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">320,803</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">319,008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 4/12/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">320,803</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">320,803</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Packaging Corporation of America,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.625% due 4/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Spinnaker Industries Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.75% due 10/15/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,200,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,524,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">228,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,284,106</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,036,606</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Paging&nbsp;&#151;&nbsp;0.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">950,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Metrocall Inc., 11% due 9/15/2008(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">269,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">435,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">83,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">788,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Paper&nbsp;&#151;&nbsp;4.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">650,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">American Tissue Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.50% due 7/15/2006(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">666,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">666,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,981,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Cellular Tissue Holdings, Inc., Term C,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 3/24/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,916,859</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,916,859</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Norampac Inc., 9.50% due 2/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,537,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">447,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,985,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,965,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Pacifica Paper, Term B, due 12/31/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,999,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,999,950</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,999,825</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">13,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Repap
                 New Brunswick, Inc., Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 6/01/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,876,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,407,188</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,938,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">13,221,563</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">SD
                 Warren Co., 12% due 12/15/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,150,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,150,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,801,556</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Stone
                 Container Corporation, Term E,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 10/01/2003**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,824,971</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,824,971</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">23,388,346</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,073,438</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,302,684</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">35,764,468</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Petroleum Refineries&nbsp;&#151;&nbsp;0.8%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Clark
                 Refining &amp; Marketing Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Term, due 11/15/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,125,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,625,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">United
                 Refining Co., 10.75% due 6/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,200,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,325,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,825,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Pharmaceuticals&nbsp;&#151;&nbsp;0.3%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Dade
                 Behring Inc.:**</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,243,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 6/30/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,247,082</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,247,082</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,243,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 6/30/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,247,082</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,247,082</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,494,164</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,494,164</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Printing &amp;
                 Publishing&nbsp;&#151;&nbsp;0.5%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,775,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Premier
                 Graphics Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.50% due 12/01/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">472,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">213,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">112,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">798,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">575,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Regional Independent Media,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.50% due 7/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">575,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">575,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">T/SF
                 Communications Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.375% due 11/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,428,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,428,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Baa3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">World
                 Color Press Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.375% due 11/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">977,767</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">488,883</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">244,441</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,711,091</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,450,267</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,706,383</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">356,941</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,513,591</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="906" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Property Management&nbsp;&#151;&nbsp;1.3%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;4,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">NRT
                 Incorporated, Term, due 7/31/2004**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;2,987,814</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;995,938</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;497,969</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;4,481,721</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Prison
                 Realty Trust Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,175,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">12% due
                 6/01/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">648,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">336,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">144,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,128,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,990,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 12/31/2002**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,989,379</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,989,379</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Rockefeller Center Property Trust,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.573% due 12/31/2000
                 (Convertible)(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,087,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,670,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,757,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,723,314</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,001,938</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,631,348</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,356,600</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Restaurants&nbsp;&#151;&nbsp;0.6%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Domino
                 &amp; Bluefence:**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,497,481</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 12/21/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,005,313</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,505,438</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,660,446</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 12/21/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,174,417</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500,757</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,675,174</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,160,194</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Domino
                 Pizza Funding Corp., Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 12/21/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,166,358</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,166,358</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,346,088</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,882</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,346,970</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Retail&nbsp;&#151;&nbsp;Specialty&nbsp;&#151;
                 &nbsp;1.7%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,960,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Asbury
                 Automotive Group, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 3/31/2005**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,910,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,910,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">TM
                 Group Holdings, 11% due 5/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,980,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">990,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,970,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,409,504</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">US
                 Office, Term B, due 6/09/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,293,899</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,293,899</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,340,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">United
                 Auto Group, Inc., 11% due 7/15/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,795,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,900,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">427,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,123,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,686,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,183,899</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">427,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">14,297,399</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Shipping&nbsp;&#151;&nbsp;0.4%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Enterprises Shipholding,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;8.875% due 5/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,220,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,220,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Equimar
                 Shipholdings Ltd.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.875% due 7/01/2007(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,200,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,220,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,420,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Textile
                 Mill Products&nbsp;&#151;&nbsp;1.3%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,900,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Galey
                 &amp; Lord, Inc., 9.125% due 3/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,015,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">434,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,449,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,725,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Globe
                 Manufacturing Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10% due 8/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">483,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">241,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">724,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Joan
                 Fabrics Corp.:**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,968,049</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term A,
                 due 6/30/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,940,769</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,940,769</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,617,820</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 6/30/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,611,275</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,611,275</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,357,283</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 6/30/2006</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,353,890</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,353,890</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,438,769</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,640,665</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,079,434</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Tower
                 Construction &amp;
               <BR>
               Leasing&nbsp;&#151;&nbsp;1.6%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">American Tower, Term B, due 12/30/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,038,540</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,015,416</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,007,708</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,061,664</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,100,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Crown
                 Castle International Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9% due 5/15/2011</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">614,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">283,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">141,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,039,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Spectracite, Term B, due 6/30/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,014,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,003,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,017,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,666,790</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,298,916</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,152,958</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">14,118,664</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="906" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Transportation
                 Services&nbsp;&#151;&nbsp;2.7%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">D</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ca</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&#134;AmeriTruck Distribution Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12.25% due 11/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;63,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;63,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Autopistas del Sol SA,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.25% due 8/01/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">825,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,856,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,681,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Eurotunnel:**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">GBP&nbsp;&nbsp;3,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term 2,
                 due 7/15/2025</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,687,843</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,687,843</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">GBP&nbsp;&nbsp;3,199,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Tier 1
                 Tranche, due 11/04/2011</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,144,371</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,144,371</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;&nbsp;8,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">MRS
                 Logistica SA, 10.625% due 8/15/2005(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,287,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,572,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,860,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,970,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Transport Manufacturing, Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 6/15/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,002,984</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,597</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,003,581</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">695,814</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&#134;Trism, 12% due 2/09/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">417,488</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">417,488</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">14,259,855</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,597,831</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,597</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">23,858,283</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Utilities&nbsp;&#151;&nbsp;0.5%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">AES
                 Corporation, 8.50% due 11/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,281,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,281,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Monterrey Power, SA de CV,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.625% due 11/15/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,447,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,447,500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,447,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,281,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,728,750</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Waste
                 Management&nbsp;&#151;1.5%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">ISG
                 Resources Inc., 10% due 4/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,231,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,231,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,890,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Norcal
                 Waste Systems, 13.50% due 11/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,830,975</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,052,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,368,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,251,725</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ca</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,575,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Safety-Kleen Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.25% due 5/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,311,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">645,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">258,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,214,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,325,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Stericycle Inc., 12.375% due 11/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">741,312</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">357,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">255,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,354,812</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,115,037</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,055,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,881,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">13,052,287</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Wired
                 Telecommunications&nbsp;&#151;&nbsp;10.7%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,400,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Call-Net Enterprises Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.375% due 5/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,580,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">316,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,896,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,625,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Caprock
                 Communications Corporation,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.50% due 5/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,983,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,953,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">786,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,724,375</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,375,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">E.Spire
                 Communications,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.521% due 7/01/2008(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,094,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,029,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,123,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">650,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Esprit
                 Telecom Group PLC,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.875% due 6/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">611,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">611,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Global
                 Telesystems Group,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.875% due 2/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,101,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">786,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,887,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Globenet Communications Group Ltd., 13% due
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;7/15/2007(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,750,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,070,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Hermes
                 Europe RailTel BV,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.375% due 1/15/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">609,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">281,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">112,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,003,125</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Intermedia Communications Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.046%
                 due 7/15/2007(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,170,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,170,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">8.875%
                 due 11/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,870,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,870,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.50%
                 due 3/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,069,375</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">718,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,787,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="289" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Level 3
                 Communications Inc.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.125% due 5/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,941,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,941,250</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="906" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Wired
                 Telecommunications&nbsp;&#151;&nbsp;(concluded)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;1,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Metromedia Fiber Network,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10% due 11/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;982,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;491,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;245,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;1,719,375</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BBB</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Baa3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,050,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Metronet Communications,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.95% due 6/15/2008(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">825,823</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">825,823</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,200,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Netia
                 Holdings II BV,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;13.125% due 6/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,491,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">532,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">319,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,343,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Nextlink Communications Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9% due
                 3/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,395,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,395,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.45%
                 due 4/15/2008(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,125,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,875,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,000,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">12.25%
                 due 6/01/2009(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,210,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,210,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Pacific
                 Crossing Ltd., Term B,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;due 7/28/2006**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,553,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,553,125</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Primus
                 Telecommunications Group:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11.75%
                 due 8/01/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">990,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">495,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,485,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,225,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11.25%
                 due 1/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,781,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">807,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">475,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,063,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">RSL
                 Communications PLC:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11.965%
                 due 3/01/2008(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,627,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,627,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,350,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">9.875%
                 due 11/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,628,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">334,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,962,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Telegroup Inc.&#134;:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">8% due
                 11/01/2004</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">720,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">720,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">8% due
                 4/15/2005(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">15</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">15</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,462,365</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Teligent Inc., Term, due 7/01/2002**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,017,944</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,272,917</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,290,861</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Time-Warner Telecom LLC,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;9.75% due 7/15/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Versatel Telecom BV,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.875% due 7/15/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">714,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">357,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">204,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,275,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Viatel,
                 Inc., 11.50% due 3/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,780,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,780,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Williams Communication Group Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10.70%
                 due 10/01/2007</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,541,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">770,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">256,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,568,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10.875%
                 due 10/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,530,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">765,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">255,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,550,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Worldwide Fiber Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,210,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">12.50%
                 due 12/15/2005</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,042,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">942,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">377,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,362,475</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">12% due
                 8/01/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">728,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">364,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">208,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,300,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">66,832,319</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">19,359,505</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,604,600</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">92,796,424</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Wireless
                 Telecommunications&nbsp;&#151;&nbsp;8.7%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,750,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">CTI
                 Holdings SA, 11.316% due 4/15/2008(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,775,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,775,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Dolphin
                 Telecom PLC(a):</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,100,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"> <FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11.50%
                 due 6/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">384,625</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">113,125</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">497,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">700,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">16.331%
                 due 6/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">316,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">316,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,500,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">14% due
                 5/15/2009</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">630,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">281,400</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">138,600</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,050,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">ESAT
                 Telecom Group PLC:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,850,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">12.427%
                 due 2/01/2007(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,002,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">562,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,565,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,035,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11.875%
                 due 12/01/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,045,600</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,595,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,640,600</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Microcell Telecommunications,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;12% due 6/01/2009(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,239,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">619,875</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">261,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,120,625</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Nextel
                 Communications, Inc.:**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 6/30/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,054,465</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,527,233</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,516,340</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,098,038</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">BB-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ba2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term C,
                 due 12/31/2008</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,054,465</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,527,233</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,516,340</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,098,038</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B3</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,600,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="281" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Nextel
                 Partners Inc., 14% due 2/01/2009(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,153,938</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,385,063</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">534,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,073,001</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="906" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>S&amp;P
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Moody&#146;s
               <BR>
               Ratings</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Corporate Debt Obligations</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Wireless
                 Telecommunications&nbsp;&#151;&nbsp;(concluded)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">US$&nbsp;2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">PTC
                 International Finance BV,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;10.269% due 7/01/2007(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;1,360,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;1,360,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,625,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">PTC
                 International Finance II SA,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;11.25% due 12/01/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,010,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">429,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">202,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,641,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">PowerTel PCS:**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,835,714</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 3/04/2001</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,823,728</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,823,728</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 2/06/2003</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,993,750</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,993,750</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Telesystem International Wireless Inc.:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">16.147%
                 due 6/30/2007(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,144,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,280,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">416,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,840,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">CCC+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Caa1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,250,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10.052%
                 due 11/01/2007(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,337,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,337,500</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">NR*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B2</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Tritel
                 Holdings, Term B, due 12/31/2007**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,003,250</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,003,250</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">VoiceStream Wireless Corporation/
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Voicestream Wireless Holding
                 Company:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B-</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,325,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10.375%
                 due 11/15/2009(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">749,469</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">361,813</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">258,437</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,369,719</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B+</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">B1</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,000,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Term B,
                 due 1/15/2009**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,041,013</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,017,577</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,005,859</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,064,449</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">46,554,450</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">17,997,797</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,116,201</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">75,668,448</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total
                 Investments in Corporate
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Debt Obligations
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;(Cost
                 $1,186,225,509)&nbsp;&#151;&nbsp;125.3%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">669,621,742</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">284,573,208</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;133,121,543</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;1,087,316,493</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="2"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Shares Held</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Stocks &amp; Warrants</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=16><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Broadcast&nbsp;&#151;&nbsp;Radio &amp;
               <BR>
               Television&nbsp;&#151;&nbsp;0.3%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">25</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Paxson
                 Communications (Convertible)(b)(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">251,609</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">251,609</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">53</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Paxson
                 Communications (Preferred)(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">541,774</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">541,774</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">704</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Paxson
                 Communications (Warrants)(c)(d)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,112</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,112</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">15,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Sirius
                 Satellite (Warrants)(c)(d)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,150,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">565,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">234,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,950,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,150,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,360,995</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">234,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,745,495</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Cable
                 Television Services
               <BR>
               &nbsp;&#151;&nbsp;0.0%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Park N
                 View Inc. (Warrants)(d)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">500</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Energy&nbsp;&#151;&nbsp;0.2%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">139,416</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Forcenergy Inc.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,561,462</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">390,362</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,951,824</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">High
                 Technology&nbsp;&#151;&nbsp;0.0%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">318,830</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">WGL
                 Holdings (Warrants)(d)(g)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">159,415</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">159,415</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Online
                 Services&nbsp;&#151;&nbsp;0.1%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Splitrock Services Inc. (Warrants)(d)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">690,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">690,000</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Packaging&nbsp;&#151;&nbsp;0.4%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">31,742</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Packaging Corporation of America
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;(Preferred)(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,088,312</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">617,662</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,705,974</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Tower
                 Construction &amp;
               <BR>
               Leasing&nbsp;&#151;&nbsp;1.0%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,362</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Crown
                 Castle International Corporation
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;(Preferred)(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,205,363</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,407,281</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,612,644</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Transportation Services
               <BR>
               &nbsp;&#151;&nbsp;0.0%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">44,068</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="270" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Trism</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">22,034</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">22,034</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="84" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Continued)</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <HR SIZE=1 NOSHADE>

             <BR>

             <TABLE ALIGN="center" WIDTH="904" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=11 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Industries</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Shares Held</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Stocks &amp; Warrants</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies
               <BR>
               Fund III, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma for
               <BR>
               Combined Fund</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Wired
               <BR>
               Telecommunications
               <BR>
               &nbsp;&#151;&nbsp;0.2%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,500</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Metronet Communications (Warrants)(c)(d)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&nbsp;
                 &nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;719,250</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#151;&nbsp;
                 &nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;719,250</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Unifi
                 Communications (Warrants)(c)(d)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">20</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">20</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">17,336</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#134;Viatel, Inc.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">976,234</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">976,234</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">976,234</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">719,270</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,695,504</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Wireless
               <BR>
               Telecommunications
               <BR>
               &nbsp;&#151;&nbsp;1.3%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Centaur
                 Funding Corp. (Preferred)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,049,376</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,024,688</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,074,064</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,473</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Dobson
                 Communications (Preferred)(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,212,303</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,316,573</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">579,119</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,107,995</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,261,679</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,316,573</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,603,807</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,182,059</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total
                 Investments in Stocks &amp; Warrants
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;(Cost
                 $27,067,251)&nbsp;&#151;&nbsp;3.5%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">19,372,088</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,140,249</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,253,112</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">30,765,449</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Face
                 Amount</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Short-Term Securities</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD COLSPAN=7 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Commercial
               <BR>
               Paper***&#151;0.2%</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;409,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">General
                 Motors Acceptance Corp.,
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;5.94% due 3/01/2000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">409,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">409,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,183,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Vastar
                 Resources, 5.95% due 3/01/2000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">634,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">549,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,183,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total
                 Investments in Short-Term Securities
               <BR>
               (Cost $1,592,000)&nbsp;&#151;&nbsp;0.2%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">634,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">409,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">549,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,592,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=20><HR SIZE=1 NOSHADE></TD>
              </TR>
              <TR>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total
                 Investments
               <BR>
               (Cost $1,214,884,760)&nbsp;&#151;&nbsp;129.0%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">689,627,830</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">291,122,457</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">138,923,655</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,119,673,942</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Unrealized Appreciation on Forward Foreign
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Exchange
                 Contracts****&nbsp;&#151;&nbsp;0.0%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">74,339</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">77,822</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">152,161</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Liabilities in Excess of Other
                 Assets&nbsp;&#151;&nbsp;(29.0%)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(151,359,479</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(64,725,737</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(35,844,233</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(261,148,563</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)&#134;&#134;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="328" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Net
                 Assets&nbsp;&#151;&nbsp;100.0%</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$538,342,690</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$226,474,542</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$103,079,422</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$858,677,540</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#134;&#134;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="77" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left">


             </DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="705" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="671" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Represents a zero coupon or step bond; the interest
                 rate shown reflects the effective yield at the time of
                 purchase by the Fund.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="671" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Represents a pay-in-kind security which may pay
                 interest/dividends in additional face/share.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="671" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">The
                 security may be offered and sold to &#147;qualified
                 institutional buyers&#148; under Rule 144A of the Securities
                 Act of 1933.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(d)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="671" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Warrants entitle the Fund to purchase a predetermined
                 number of shares of common stock and are non-income producing.
                 The purchase price and
               <BR>
               number of shares are subject to adjustment under certain
                 conditions until the expiration date.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(e)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="671" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Floating rate note.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(f)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="671" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Mortgage-Backed Obligations are subject to principal
                 paydowns as a result of prepayments or refinancings of the
                 underlying mortgage instruments. As a
               <BR>
               result, the average life may be substantially less than the
                 original maturity.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;(g)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="671" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Restricted securities as to resale. The value of the
                 Fund&#146;s investment in restricted securities was
                 approximately $159,000, representing 0.1% of net
                 assets.</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
              <TR>
               <TD WIDTH="10%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="90%" VALIGN="top"> <DIV ALIGN="left"><HR
                 WIDTH="50%" SIZE="1" NOSHADE></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE ALIGN="center" WIDTH="430" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Issue</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Acquisition
               <BR>
               Date</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Value</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=6><DIV ALIGN="left"><HR SIZE=1 NOSHADE></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="222" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">WGL
                 Holdings (Warrants)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9/3/97</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$159,415</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="222" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Total</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$159,415</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="680" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&#134;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="648" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Non-income producing security.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&#134;&#134;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="648" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Amounts
                 reflect Pro Forma adjustment to the Statement of Assets,
                 Liabilities and Capital.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="648" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Not
                 Rated.</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>COMBINED SCHEDULE OF INVESTMENTS FOR</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC., DEBT STRATEGIES FUND, INC.
               AND</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND III, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>


             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited) (Concluded)</B></FONT></DIV>

             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>February 29, 2000</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE ALIGN="center" WIDTH="679" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="642" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Floating or Variable Rate Corporate
                 Debt&nbsp;&#151;&nbsp;The interest rates on floating or
                 variable rate corporate debt are subject to change
                 periodically, based
               <BR>
               on the change in the prime rate of a US Bank, LIBOR (London
                 Interbank Offered Rate) or, in some cases, another base
                 lending rate. Corporate
               <BR>
               loans represent 47.9% of the Debt Strategies Fund II,
                 Inc.&#146;s net assets, 47.2% of Debt Strategies Fund,
                 Inc.&#146;s net assets, and 64.8% of Debt
               <BR>
               Strategies Fund III, Inc.&#146;s net assets.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">***</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="642" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Commercial Paper is traded on a discount basis; the
                 interest rate shown reflects the discount rate paid at the
                 time of purchase by the Fund.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">****</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="642" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Forward
                 foreign exchange contracts as of February 29, 2000 were as
                 follows:</FONT></TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE ALIGN="center" WIDTH="430" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies Fund II, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=6><DIV ALIGN="left"><HR SIZE=1 NOSHADE></DIV>
               </TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Foreign Currency Sold</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Expiration Date</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Unrealized
               <BR>
               Appreciation</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=6><DIV ALIGN="left"><HR SIZE=1 NOSHADE></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="203" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">EUR638,617</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">March
                 2000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$15,786</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="203" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">GBP2,760,621</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">March
                 2000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">58,553</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="203" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total
                 Unrealized Appreciation on
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Forward Foreign Exchange
                 Contracts&nbsp;&#151;
               <BR>
               &nbsp;Net (US$
                 Commitment&nbsp;&#151;&nbsp;$5,047,587)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$74,339</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="430" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies Fund, Inc.</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=6><DIV ALIGN="left"><HR SIZE=1 NOSHADE></DIV>
               </TD>
              </TR>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Foreign Currency Sold</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Expiration Date</B></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Unrealized
               <BR>
               Appreciation</B></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=6><DIV ALIGN="left"><HR SIZE=1 NOSHADE></DIV>
               </TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="203" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">EUR512,108</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">March
                 2000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$12,659</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="203" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">GBP2,489,984</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">March
                 2000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">65,163</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="203" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Total
                 Unrealized Appreciation on
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Forward Foreign Exchange
                 Contracts&nbsp;&#151;
               <BR>
               &nbsp;Net (US$
                 Commitment&nbsp;&#151;&nbsp;$4,501,968)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$77,822</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

             <I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
               unaudited pro forma Combined Statement of Assets, Liabilities
               and Capital has been derived from the Statements of Assets,
               Liabilities and Capital of the respective Funds as of February
               29, 2000 and such information has been adjusted to give effect
               to the Merger as if the Merger had occurred at February 29,
               2000. The pro forma Combined Statement of Assets, Liabilities
               and Capital is presented for informational purposes only and
               does not purport to be indicative of the financial condition
               that actually would have resulted if the Merger had been
               consummated at February 29, 2000. The pro forma Combined
               Statement of Assets, Liabilities and Capital should be read in
               conjunction with the Funds&#146; financial statements and
               related notes thereto which are included in the Joint Proxy
               Statement and Prospectus. </I></FONT></DIV>

             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>PRO
               FORMA COMBINED STATEMENT OF ASSETS, LIABILITIES AND
               CAPITAL</B></FONT></DIV>



             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>FOR
               DEBT STRATEGIES FUND II, INC., DEBT STRATEGIES FUND,
               INC.</B></FONT></DIV>



             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>AND
               DEBT STRATEGIES FUND III, INC.</B></FONT></DIV>

             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>As of
               February 29, 2000 (Unaudited)</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="611" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies
               <BR>
               Fund II</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies
               <BR>
               Fund</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies
               <BR>
               Fund III</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Adjustments</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma
               <BR>
               for Combined
               <BR>
               Fund</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Assets:</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Investments, at value*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$689,627,830</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$291,122,457</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$138,923,655</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$1,119,673,942</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Cash</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">49,209</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">661</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">49,870</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Unrealized appreciation on forward foreign exchange
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;contracts</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">74,339</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">77,822</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">152,161</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Receivables:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Interest</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">13,253,517</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,350,131</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,750,633</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">22,354,281</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Securities sold</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">487,563</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">269,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">168,125</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">924,688</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Dividends</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">233,364</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">233,364</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Deferred facility fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,107</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,107</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Prepaid
                 expenses and other assets</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">98,220</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">204,129</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">35,271</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">337,620</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                 assets</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">703,828,149</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">298,024,200</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">141,877,684</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,143,730,033</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Liabilities:</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Loans</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">161,000,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">70,000,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">37,000,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">268,000,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Payables:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Interest on loans</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,406,730</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">876,385</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">425,188</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,708,303</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Dividends to
                 shareholders</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,122,672</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">159,048</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">231,659</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,428,114</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(1)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,941,493</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Custodian bank</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">912,789</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">912,789</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Investment adviser</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">265,844</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">116,532</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">53,882</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">436,258</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Securities purchased</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">260,821</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">260,821</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Commitment fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,078</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">12,053</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,306</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">23,437</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Deferred income</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">50,633</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,047</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">56,680</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Accrued
                 expenses</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">369,681</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">379,593</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">172,438</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">791,000</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(2)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,712,712</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                 liabilities</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">165,485,459</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">71,549,658</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">38,798,262</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">9,219,114</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">285,052,493</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Net
                 Assets:</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Net
                 Assets</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$538,342,690</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$226,474,542</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$103,079,422</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$(9,219,114</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;858,677,540</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Capital:</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Common
                 Stock, $0.10 par value, 200,000,000 shares
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;authorized**</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,261,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,142,523</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,101,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(411,307</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,093,216</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Paid-in
                 capital in excess of par</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">619,266,581</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">310,639,558</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">108,740,136</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(379,693</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,038,266,582</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Undistributed investment
                 income&nbsp;&#151;&nbsp;net</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,195,536</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,144,532</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,088,046</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(8,428,114</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">0</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Accumulated realized capital losses on investments and
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;foreign currency
                 transactions&nbsp;&#151;&nbsp;net</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(42,755,240</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(50,217,316</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(1,905,263</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(94,877,819</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Unrealized depreciation on investments and foreign
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;currency
                 transactions&nbsp;&#151;&nbsp;net</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(49,625,187</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(39,234,755</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(5,944,497</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(94,804,439</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Net
                 assets</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$538,342,690</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$226,474,542</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$103,079,422</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$(9,219,114</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;858,677,540</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Net
                 asset value per share</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.60</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.21</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.36</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;8.51</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=17><DIV ALIGN="left"><HR SIZE=1 NOSHADE></DIV>
               </TD>
               <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;*&nbsp;Identified cost</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$739,460,713</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$330,555,895</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$144,868,152</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$1,214,884,760</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="254" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">**&nbsp;Shares outstanding</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">62,610,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">31,425,226</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,010,000</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(4,113,068</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">100,932,158</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
             </TABLE>


             <BR>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(1)</FONT></DIV>
               </TD>
               <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Assumes
                 the distribution of undistributed net investment
                 income.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="3%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(2)</FONT></DIV>
               </TD>
               <TD WIDTH="97%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Reflects the charge for estimated Reorganization
                 expenses of $791,000.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">See Notes
               to Financial Statements.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

             <I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following
               unaudited pro forma Combined Statement of Operations has been
               derived from the statement of operations of the respective Funds
               for the year ended February 29, 2000 and such information has
               been adjusted to give effect to the Merger as if the Merger had
               occurred on March 1, 1999. The pro forma Combined Statement of
               Operations is presented for informational purposes only and does
               not purport to be indicative of the results of operations that
               actually would have resulted if the Merger had been consummated
               on March 1, 1999 nor which may result from future operations.
               The pro forma Combined Statement of Operations should be read in
               conjunction with the Funds&#146; financial statements and
               related notes thereto which are included in the Joint Proxy
               Statement and Prospectus.</I></FONT></DIV>

             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>PRO
               FORMA COMBINED STATEMENT OF OPERATIONS</B></FONT></DIV>


             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>FOR
               DEBT STRATEGIES FUND II, INC., DEBT STRATEGIES FUND,
               INC.</B></FONT></DIV>



             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>AND
               DEBT STRATEGIES FUND III, INC.</B></FONT></DIV>

             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>For
               the Year Ended February 29, 2000</B></FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>(Unaudited)</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="613" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies
               <BR>
               Fund II</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies
               <BR>
               Fund</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies
               <BR>
               Fund III</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Adjustments</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Pro
                 Forma
               <BR>
               for Combined
               <BR>
               Fund(2)</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Investment Income</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Interest and discount
                 earned*</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$75,022,886</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$34,958,766</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$14,578,909</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$124,560,561</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Dividends</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,637,840</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">223,305</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">549,151</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,410,296</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Facility and other
                 fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">685,818</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">290,359</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">198,652</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1,174,829</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
                 income</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">77,346,544</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">35,472,430</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">15,326,712</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">128,145,686</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Expenses:</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Loan interest
                 expense</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">10,655,187</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,620,670</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,370,553</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">18,646,410</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Investment advisory
                 fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4,459,855</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,063,756</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">899,808</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">7,423,419</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Borrowing costs</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">255,584</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">263,187</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">34,456</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">553,227</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Professional fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">206,308</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">200,497</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">86,873</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(287,370</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)(1)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">206,308</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Accounting services</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">122,348</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">104,589</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">90,900</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(170,238</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)(1)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">147,599</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Transfer agent fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">85,477</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">48,489</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">32,732</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">166,698</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Listing fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">94,061</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">49,018</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">18,110</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(67,128</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)(1)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">94,061</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Printing and shareholder
                 reports</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">51,924</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">51,949</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">25,626</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(70,874</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)(1)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">58,625</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Custodian fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">60,588</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">33,104</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">18,126</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(26,686</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)(1)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">85,132</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Organization expense</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">42,833</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">38,786</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">19,027</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(100,646</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">0</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Directors&#146; fees and
                 expenses</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,003</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,003</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,120</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(54,123</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)(1)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,003</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Pricing fees</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">15,471</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">14,188</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">12,357</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(8,850</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)(1)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">33,166</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Other</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">66,848</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">58,829</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">19,936</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">145,613</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Total expenses</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">16,143,487</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">8,574,065</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,655,624</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(785,915</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,587,261</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Investment
                 income&nbsp;&#151;&nbsp;net</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">61,203,057</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">26,898,365</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,671,088</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">785,915</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">100,558,425</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Realized and Unrealized Gain (Loss) on Investments
                 &amp;
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Foreign Currency
                 Transactions&nbsp;&#151;&nbsp;Net</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Realized gain (loss)
                 from:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;Investments&nbsp;&#151;&nbsp;net</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(29,321,429</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(34,118,643</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(1,864,868</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(65,304,940</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign
                 currency transactions&nbsp;&#151;&nbsp;net</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">137,183</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">202,781</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">39,583</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">379,547</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized
                 appreciation/depreciation on:</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" ALIGN="right"></TD>
               <TD></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;Investments&nbsp;&#151;&nbsp;net</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(6,155,982</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2,608,571</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(6,066,901</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(9,614,312</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign
                 currency transactions&nbsp;&#151;&nbsp;net</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(92,194</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(8,392</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(31,896</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(132,482</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Net
                 Increase (Decrease) in Net Assets Resulting from
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Operations</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$25,770,635</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;(4,417,318</FONT></TD>
               <TD VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;3,747,006</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$785,915</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;25,886,238</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1"><HR ALIGN="right" WIDTH="100%" SIZE="2"
                 NOSHADE></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=17><DIV ALIGN="left"><HR SIZE=1 NOSHADE></DIV>
               </TD>
               <TR>
               <TD VALIGN="bottom" WIDTH="262" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">*&nbsp;Net foreign withholding tax on
                 interest</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;35,782</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;35,794</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;71,576</FONT></TD>
               <TD><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(1)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Reflects the anticipated savings as a result of the
                 Reorganization through fewer audits and consolidation of
                 printing, accounting and other services.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">(2)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">This
                 Pro Forma Combined Statement of Operations excludes
                 non-recurring aggregate estimated Reorganization expenses of
                 $791,000.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">See Notes
               to Financial Statements</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>DEBT
               STRATEGIES FUND II, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>NOTES
               TO FINANCIAL STATEMENTS</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>1.&nbsp;&nbsp;&nbsp;&nbsp;Significant Accounting
               Policies:</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt
               Strategies Fund II, Inc. (the &#147;Fund&#148;) is registered
               under the Investment Company Act of 1940 as a diversified,
               closed-end management investment company. The Fund&#146;s
               financial statements are prepared in accordance with generally
               accepted accounting principles, which may require the use of
               management accruals and estimates. These unaudited financial
               statements reflect all adjustments which are, in the opinion of
               management necessary to a fair statement of the results for the
               interim period presented. All such adjustments are of a normal
               recurring nature.The Fund determines and makes available for
               publication the net asset value of its Common Stock on a weekly
               basis. The Fund&#146;s Common Stock is listed on the New York
               Stock Exchange under the symbol DSU.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
               Corporate debt obligations&#151;</I>The Fund invests principally
               in debt obligations of companies, including corporate loans made
               by banks and other financial institutions and both privately and
               publicly offered corporate bonds and notes. Because agents and
               intermediaries are primarily commercial banks, the Fund&#146;s
               investment in corporate loans could be considered concentrated
               in financial institutions.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
               Valuation of investments&#151;</I>Corporate Loans are valued in
               accordance with guidelines established by the Board of
               Directors. Until July 9, 1999, Corporate Loans for which an
               active secondary market exists and for which Fund Asset
               Management, L.P., the Fund&#146;s investment adviser (the
               &#147;Investment Adviser&#148; or &#147;FAM&#148;) can obtain at
               least two quotations from banks or dealers in Corporate Loans
               were valued by calculating the mean of the last bid and asked
               prices in the markets for such Corporate Loans, and then using
               the mean of those two means. If only one quote for a particular
               Corporate Loan was available, such Corporate Loan was valued on
               the basis of the mean of the last available bid and asked prices
               in the market. As of July 12, 1999, pursuant to the approval of
               the Board of Directors, the Corporate Loans are valued at the
               mean between the last available bid and asked prices from one or
               more brokers or dealers as obtained from Loan Pricing
               Corporation. For Corporate Loans for which an active secondary
               market does not exist to a reliable degree in the opinion of the
               Investment Adviser, such Corporate Loans will be valued by the
               Investment Adviser at fair value, which is intended to
               approximate market value.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other
               portfolio securities may be valued on the basis of prices
               furnished by one or more pricing services, which determines
               prices for normal, institutional-size trading units of such
               securities using market information, transactions for comparable
               securities and various relationships between securities that are
               generally recognized by institutional traders. In certain
               circumstances, portfolio securities are valued at the last sale
               price on the exchange that is the primary market for such
               securities, or the last quoted bid price for those securities
               for which the over-the-counter market is the primary market or
               for listed securities in which there were no sales during the
               day. The value of interest rate swaps, caps, and floors is
               determined in accordance with a formula and then confirmed
               periodically by obtaining a bank quotation. Options written or
               purchased are valued at the last sale price in the case of
               exchange-traded options. In the case of options traded in the
               over-the-counter market, valuation is the last asked price
               (options written) or the last bid price (options purchased).
               Short-term securities with remaining maturities of sixty days or
               less are valued at amortized cost, which approximates market
               value. Securities and assets for which market price quotations
               are not readily available are valued at fair value as determined
               in good faith by or under the direction of the Board of
               Directors of the Fund.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
               Derivative financial instruments&#151;</I>The Fund may engage in
               various portfolio strategies to seek to increase its return by
               hedging its portfolio against adverse movements in the debt and
               currency markets. Losses may arise due to changes in the value
               of the contract or if the counterparty does not perform under
               the contract.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"><I>Financial futures contracts&#151;</I>The Fund may
                 purchase or sell financial futures contracts and options on
                 such futures contracts for the purpose of hedging the market
                 risk on existing securities or the intended purchase of
                 securities. Futures contracts are contracts for delayed
                 delivery of securities at a specific future date and at a
                 specific price or yield. Upon entering into a contract, the
                 Fund deposits and
               maintains as collateral such initial margin as required by the
                 exchange on which the transaction is effected. Pursuant to the
                 contract, the Fund agrees to receive from or pay to the broker
                 an amount of cash equal to the daily fluctuation in value of
                 the contract. Such receipts or payments are known as variation
                 margin and are recorded by the Fund as unrealized gains or
                 losses. When the contract is closed, the Fund records a
                 realized gain or loss equal to the difference between the
                 value of the contract at the time it was opened and the value
                 at the time it was closed.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"><I></I></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"><I>Forward foreign exchange contracts&#151;The Fund is
                 authorized to enter into forward foreign exchange contracts as
                 a hedge against either specific transactions or portfolio
                 positions. Such contracts are not entered on the Fund&#146;s
                 records. However, the effect on operations is recorded from
                 the date the Fund enters into such contracts.</I></FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"><I>Options&#151;</I>The Fund is authorized to write
                 covered call and put options and purchase call and put
                 options. When the Fund writes an option, an amount equal to
                 the premium received by the Fund is reflected as an asset and
                 an equivalent liability. The amount of the liability is
                 subsequently marked to market to reflect the current market
                 value of the option written. When a security is purchased or
                 sold through an exercise of an option, the related premium
                 paid (or received) is added to (or deducted from) the basis of
                 the security acquired or deducted from (or added to) the
                 proceeds of the security sold. When an option expires (or the
                 Fund enters into a closing transaction), the Fund realizes a
                 gain or loss on the option to the extent of the premiums
                 received or paid (or gain or loss to the extent the cost of
                 the closing transaction exceeds the premium paid or
                 received).</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Written
                 and purchased options are non-income producing
                 investments.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"><I>Interest rate transactions</I>&#151;The Fund is
                 authorized to enter into interest rate swaps and purchase or
                 sell interest rate caps and floors. In an interest rate swap,
                 the Fund exchanges with another party their respective
                 commitments to pay or receive interest on a specified notional
                 principal amount. The purchase of an interest rate cap (or
                 floor) entitles the purchaser, to the extent that a specified
                 index exceeds (or falls below) a predetermined interest rate,
                 to receive payments of interest equal to the difference
                 between the index and the predetermined rate on a notional
                 principal amount from the party selling such interest rate cap
                 (or floor).</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
               Foreign currency transactions&#151;</I>Transactions denominated
               in foreign currencies are recorded at the exchange rate
               prevailing when recognized. Assets and liabilities denominated
               in foreign currencies are valued at the exchange rate at the end
               of the period. Foreign currency transactions are the result of
               settling (realized) or valuing (unrealized) assets or
               liabilities expressed in foreign currencies into US dollars.
               Realized and unrealized gains or losses from investments include
               the effects of foreign exchange rates on
               investments.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
               Income taxes&#151;</I>It is the Fund&#146;s policy to comply
               with the requirements of the Internal Revenue Code applicable to
               regulated investment companies and to distribute substantially
               all of its taxable income to its shareholders. Therefore, no
               Federal income tax provision is required. Under the applicable
               foreign tax law, a withholding tax may be imposed on interest,
               dividends and capital gains at various rates.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
               Security transactions and investment income&#151;</I>Security
               transactions are recorded on the dates the transactions are
               entered into (the trade dates). Dividend income is recorded on
               the ex-dividend dates. Interest income (including amortization
               of discount) is recognized on the accrual basis. Realized gains
               and losses on security transactions are determined on the
               identified cost basis. Facility fees are accreted to income over
               the term of the related loan.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>DEBT
               STRATEGIES FUND II, INC.</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>NOTES
               TO FINANCIAL STATEMENTS&#151;(Concluded)</B></FONT></DIV>

             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               <I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)
               Organization expenses&#151;</I>In accordance with Statement of
               Position 98-5, unamortized organization expenses of $42,833 for
               Debt Strategies Fund II, $38,786 for Debt Strategies Fund, and
               $19,027 for Debt Strategies Fund III were expensed during the
               year ended February 29, 2000. This was considered to be a change
               in accounting principle and had no material impact on the
               operations of the Fund.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
               Dividends and distributions&#151;</I>Dividends from net
               investment income are declared and paid monthly. Distributions
               of capital gains are recorded on the ex-dividend
               dates.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;Investment Advisory
               Agreement and Transactions with Affiliates:</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Fund
               has entered into an Investment Advisory Agreement with FAM. The
               general partner of FAM is Princeton Services, Inc.
               (&#147;PSI&#148;), an indirect wholly-owned subsidiary of
               Merrill Lynch &amp; Co., Inc. (&#147;ML &amp; Co.&#148;), which
               is the limited partner.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FAM is
               responsible for the management of the Fund&#146;s portfolio and
               provides the necessary personnel, facilities, equipment and
               certain other services necessary to perform the investment
               advisory function. For such services the Fund pays a monthly fee
               at an annual rate of .60% of the Fund&#146;s average weekly net
               assets plus the proceeds of any outstanding borrowings used for
               leverage.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the
               year ended February 29, 2000, the Fund paid Merrill Lynch
               Security Pricing Service, an affiliate of Merrill Lynch, Pierce,
               Fenner &amp; Smith Incorporated (&#147;MLPF&amp;S&#148;), $380,
               $520 and $342 for security price quotations to compute the net
               asset value of Debt Strategies Fund II, Debt Strategies Fund and
               Debt Strategies Fund III, respectively.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Accounting services are provided to the Fund by FAM at
               cost.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain
               officers and/or directors of the Fund are officers and/or
               directors of FAM, PSI, and/or ML &amp; Co.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="right"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx75"></A>
             EXHIBIT I</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>INFORMATION PERTAINING TO EACH FUND</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B></B></FONT><FONT
             SIZE="2" COLOR="#000000"
               FACE="Wingdings"><B>&#159;</B></FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
               General Information Pertaining to the Funds</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="613" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Fund</B></FONT><FONT
               SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Defined Term
               <BR>
               Used in Exhibit I</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Fiscal
               <BR>
               Year End</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>State of
               <BR>
               Organization</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Meeting
               <BR>
               Time</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="306" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies Fund, Inc.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2/28</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Maryland</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">10:45
                 a.m.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="306" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies Fund II, Inc.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies II</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2/28</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Maryland</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11:00
                 a.m.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="306" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies Fund III, Inc.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies III</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">2/28</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Maryland</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">11:15
                 a.m.</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Fund</B></FONT><FONT
               SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Capital Shares of
               <BR>
               Common Stock
               <BR>
               Outstanding as of
               <BR>
               the Record Date</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="519" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">31,425,226</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="519" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies II</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">62,610,000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="519" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies III</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">11,010,000</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B></B></FONT><FONT
             SIZE="2" COLOR="#000000"
               FACE="Wingdings"><B>&#159;</B></FONT><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>
               Information Pertaining to Officers and Directors</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE ALIGN="center" WIDTH="615" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH ROWSPAN=2 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Director</B></FONT><FONT
               SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Year
                 in Which Each Nominee/Director of Debt Strategies,
               <BR>
               Debt Strategies II and Debt Strategies III
               <BR>
               Became a Member of the Board</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies II</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies III</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Terry
                 K. Glenn</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Ronald
                 W. Forbes</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Cynthia
                 A. Montgomery</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Charles
                 C. Reilly</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Kevin
                 A. Ryan</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Roscoe
                 S. Suddarth</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Richard
                 R. West</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Edward
                 D. Zinbarg</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Arthur
                 Zeikel</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth in the
               table below is information regarding board and committee
               meetings held and the aggregate fees and expenses paid by the
               Fund to non-affiliated Directors during each Fund&#146;s most
               recently completed fiscal year.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="613" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH ROWSPAN=2 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Fund</B></FONT><FONT
               SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Board</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=3 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Audit Committee</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH ROWSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Aggregate
               <BR>
               Fees and
               <BR>
               Expenses
               <BR>
               ($)</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>#
               <BR>
               Meetings
               <BR>
               Held*</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Annual
               <BR>
               Fee ($)</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Per
                 Meeting
               <BR>
               Fee ($)**</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>#
               <BR>
               Meetings
               <BR>
               Held</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Annual
               <BR>
               Fee
               <BR>
               ($)***</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="245" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">300</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">900</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,003</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="245" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies II</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">300</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">900</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,003</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="245" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Debt
                 Strategies III</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">3,000</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">300</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">4</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">900</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">27,120</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;*</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Includes meetings held via teleconferencing
                 equipment.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;**</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">The fee
                 is payable for each meeting attended in person. A fee is not
                 paid for telephonic meetings.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">***</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">The
                 Chairman of the Audit Committee receives an additional annual
                 fee of $1,000.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth
               in the table below is information regarding compensation paid by
               the Fund to the non-affiliated Directors for the most recently
               completed fiscal year.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE ALIGN="center" WIDTH="615" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH ROWSPAN=2 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Director</B></FONT><FONT
               SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Compensation From Debt Strategies, Debt Strategies II
               <BR>
               and Debt Strategies III ($)*</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies II</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
                 Strategies III</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Forbes</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Montgomery</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Reilly</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">6,100</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Ryan</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="296" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">West</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">5,100</FONT></TD>
              </TR>
             </TABLE>
             <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">*</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">No
                 pension or retirement benefits are accrued as part of Fund
                 expenses.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth
               in the table below is information regarding the aggregate
               compensation paid by all registered investment companies advised
               by FAM and its affiliate, MLIM (&#147;Affiliate Advised
               Funds&#148;), including Debt Strategies, Debt Strategies II and
               Debt Strategies III to the non-affiliated Directors for the year
               ended December 31, 1999.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Name
                 of Director/Nominee</B></FONT><FONT
               SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Aggregate Compensation From Affiliate
               <BR>
               Advised Funds Paid to Directors ($)(1)</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="416" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Ronald
                 W. Forbes</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">213,900</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="416" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Cynthia
                 A. Montgomery</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">213,900</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="416" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Charles
                 C. Reilly</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">400,025</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="416" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Kevin
                 A. Ryan</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">213,900</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="416" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Roscoe
                 S. Suddarth(2)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="416" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Richard
                 R. West</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">388,775</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="416" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Edward
                 D. Zinbarg</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">140,875</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>


             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(1)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">The
                 Directors serve on the boards of Affiliate Advised funds as
                 follows: Mr. Forbes (36 registered investment companies
                 consisting of 49 portfolios); Ms. Montgomery (36 registered
                 investment companies consisting of 49 portfolios); Mr. Reilly
                 (57 registered investment companies consisting of 68
                 portfolios); Mr. Ryan (36 registered investment companies
                 consisting of 49 portfolios); Mr. Suddarth (6 registered
                 investment companies consisting of 4 portfolios); Mr. West (67
                 registered investment companies consisting of 72 portfolios)
                 and Mr. Zinbarg (21 registered investment companies consisting
                 of 19 portfolios);</FONT></DIV>
               </TD>
              </TR>
             </TABLE>



             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(2)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Mr.
                 Suddarth was elected a Director/Trustee of certain Affiliate
                 Advised funds on January 20, 2000.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth in the
               table below is information about the officers of each of the
               Funds.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH ROWSPAN=2 VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Name
                 and Biography</B></FONT><FONT
               SIZE="1"><HR ALIGN="left" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH ROWSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Age</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH ROWSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Office</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH COLSPAN=5 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Officer Since</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TH></TH>
               <TH></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies II</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Debt
               <BR>
               Strategies III</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="top" WIDTH="256" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Terry
                 K. Glenn</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">59</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">President</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="256" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Executive Vice President of MLIM and FAM since
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;1983; Executive Vice President and
                 Director of
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Princeton Services Inc. (&#147;Princeton
                 Services&#148;) since
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;1993; President of FAM Distributors,
                 Inc. (&#147;FAMD&#148;)
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;since 1986 and Director thereof since
                 1991; President
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;of Princeton Administrators, L.P. since
                 1988.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="right"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Executive Vice President</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=11 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=11><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="bottom" WIDTH="256" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Joseph
                 T. Monagle, Jr.&nbsp;
               <BR>
               Senior Vice President of FAM and MLIM since 1990;
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Department Head of the Global Fixed
                 Income Division
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;of FAM and MLIM since 1977; Senior Vice
                 President
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;of Princeton Services since
                 1993.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">51</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Senior
                 Vice President</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=11 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=11><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="bottom" WIDTH="256" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Donald
                 C. Burke</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">40</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Vice
                 President</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1997</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1998</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="256" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Senior
                 Vice President and Treasurer of MLIM and
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;FAM since 1999; Senior Vice President
                 and Treasurer
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;of Princeton Services since 1999; Vice
                 President of
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;FAMD since 1999; First Vice President of
                 MLIM from
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;1997 to 1999; Vice President of MLIM
                 from 1990 to
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;1997; Director of Taxation of MLIM since
                 1990.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Treasurer</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=11 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=11><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="bottom" WIDTH="256" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Richard
                 C. Kilbride
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;First Vice President of MLIM since 1999;
                 Managing
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Director of Merrill Lynch Mercury Asset
                 Management
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;and Hotchkis and Wiley from 1997 to
                 1999; Managing
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Director of Global Fixed Income at
                 Merrill Lynch
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Global Asset Management, Ltd. from 1995
                 to 1997;
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Vice President of MLIM from 1990 to
                 1995.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">44</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Vice
                 President</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=11 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=11><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="bottom" WIDTH="256" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Gilles
                 Marchand
               <BR>
               Vice President of MLIM since 1997; Credit Analyst at
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;MLIM from 1996 to 1997; Security Analyst
                 at
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;Massachusetts Mutual Insurance Company
                 from 1990
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;to 1996.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">36</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Vice
                 President</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=11 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TD COLSPAN=11><FONT
              SIZE="1">&nbsp;</FONT></TD>
              <TR>
               <TD VALIGN="bottom" WIDTH="256" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times">Bradley
                 J. Lucido
               <BR>
               Vice President of MLIM since 1999; Attorney
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;associated with MLIM since 1995;
                 Attorney in private
               <BR>
               &nbsp;&nbsp;&nbsp;&nbsp;practice from 1991 to 1995.</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">34</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">Secretary</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">1999</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="right"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx76"></A>
             EXHIBIT II</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>AGREEMENT AND PLAN OF MERGER</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;THIS
               AGREEMENT AND PLAN OF MERGER (this &#147;Agreement&#148;) is
               made as of the 5th day of July, 2000 by and among Debt
               Strategies Fund, Inc. (&#147;Debt Strategies&#148;), Debt
               Strategies Fund II, Inc. (&#147;Debt Strategies II&#148;) and
               Debt Strategies Fund III, Inc. (&#147;Debt Strategies
               III&#148;), each a Maryland corporation.</FONT></DIV>

             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><U>PLAN
               OF MERGER</U></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               merger will comprise the following: (i) each of Debt Strategies
               and Debt Strategies III will be merged with and into Debt
               Strategies II in accordance with the General Corporation Law of
               the State of Maryland (&#147;Maryland Law&#148;); (ii) the
               separate existence of each of Debt Strategies and Debt
               Strategies III will cease; (iii) Debt Strategies II will be the
               surviving corporation; (iv) Debt Strategies II will change its
               name to Debt Strategies Fund, Inc. immediately after the
               Effective Date (as defined below); and (v) each share of common
               stock (&#147;Common Stock&#148;) of each of Debt Strategies and
               Debt Strategies III, including shares of Common Stock of Debt
               Strategies and Debt Strategies III representing the Dividend
               Reinvestment Plan (&#147;DRIP&#148;) shares held in the book
               deposit accounts of the holders of Common Stock of Debt
               Strategies and Debt Strategies III, will be converted into the
               right to receive an equivalent dollar amount (to the nearest one
               ten-thousandth of one cent) of full shares of Common Stock of
               Debt Strategies II, with a par value of $.10 per share
               (&#147;Debt Strategies II Common Stock&#148;), plus cash in lieu
               of any fractional shares, computed based on the net asset value
               per share of each Fund on the Effective Date (as defined below),
               all upon and subject to the terms hereinafter set forth (the
               &#147;Merger&#148;). The currently issued and outstanding shares
               of Debt Strategies II will remain issued and
               outstanding.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As soon
               as practicable after satisfaction of all conditions to the
               Merger, Debt Strategies, Debt Strategies II and Debt Strategies
               III will jointly file executed articles of merger (the
               &#147;Articles of Merger&#148;) with the Department of
               Assessments and Taxation of the State of Maryland
               (&#147;SDAT&#148;) and make all other filings or recordings
               required by Maryland Law in connection with the Merger. The
               Merger shall become effective at such time as the Articles of
               Merger are accepted for filing by SDAT or at such later time as
               is specified in the Articles of Merger (the &#147;Effective
               Date&#148;).</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From and
               after the Effective Date, Debt Strategies II will possess all of
               the rights, privileges, purposes, powers and franchises and be
               subject to all of the restrictions, liabilities, obligations,
               disabilities and duties of Debt Strategies, Debt Strategies II
               and Debt Strategies III, all as provided under Maryland
               Law.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               parties intend that the Merger qualify as a reorganization under
               Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as
               amended (&#147;Code&#148;).</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
               promptly as practicable after the Merger, the registration of
               each of Debt Strategies and Debt Strategies III, under the
               Investment Company Act of 1940, as amended (the &#147;1940
               Act&#148;) will terminate.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><U>AGREEMENT</U></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In order
               to consummate the Merger and in consideration of the premises
               and the covenants and agreements hereinafter set forth, and
               intending to be legally bound, Debt Strategies, Debt Strategies
               II and Debt Strategies III hereby agree as follows:</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">1.
               <I>Representations and Warranties of Debt Strategies
               II.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt
               Strategies II represents and warrants to, and agrees with, Debt
               Strategies and Debt Strategies III that:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;Debt Strategies II is a corporation duly
                 organized, validly existing and in good standing in conformity
                 with Maryland Law, and has the power to own all of its assets
                 and to carry out this Agreement.
               Debt Strategies II has all necessary Federal, state and local
                 authorizations to carry on its business as it is now being
                 conducted and to carry out this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(b)&nbsp;&nbsp;Debt Strategies II is duly registered
                 under the 1940 Act as a diversified, closed-end management
                 investment company (File No. 811-08603), and such registration
                 has not been revoked or rescinded and is in full force and
                 effect. Debt Strategies II has elected and qualified for the
                 special tax treatment afforded regulated investment companies
                 (&#147;RICs&#148;) under Sections 851-855 of the Code at all
                 times since its inception, and intends to continue to so
                 qualify both until consummation of the Merger and
                 thereafter.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(c)&nbsp;&nbsp;Each of Debt Strategies and Debt
                 Strategies III has been furnished with Debt Strategies
                 II&#146;s Annual Report to Stockholders for the year ended
                 February 29, 2000, and the audited financial statements
                 appearing therein fairly present the financial position of
                 Debt Strategies II as of the respective dates indicated, in
                 conformity with generally accepted accounting principles
                 applied on a consistent basis.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(d)&nbsp;&nbsp;Debt Strategies II has full power and
                 authority to enter into and perform its obligations under this
                 Agreement. The execution, delivery and performance of this
                 Agreement has been duly authorized by all necessary action of
                 its Board of Directors, and this Agreement constitutes a valid
                 and binding contract enforceable in accordance with its terms,
                 subject to the effects of bankruptcy, insolvency, moratorium,
                 fraudulent conveyance and similar laws relating to or
                 affecting creditors&#146; rights generally and court decisions
                 with respect thereto.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(e)&nbsp;&nbsp;There are no material legal,
                 administrative or other proceedings pending or, to the
                 knowledge of Debt Strategies II, threatened against Debt
                 Strategies II which assert liability on the part of Debt
                 Strategies II or which materially affect its financial
                 condition or its ability to consummate the Merger. Debt
                 Strategies II is not charged with or, to the best of its
                 knowledge, threatened with any violation or investigation of
                 any possible violation of any provisions of any Federal, state
                 or local law or regulation or administrative ruling relating
                 to any aspect of its business.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(f)&nbsp;&nbsp;Debt Strategies II is not a party to or
                 obligated under any provision of its Articles of
                 Incorporation, as amended, or its by-laws, as amended, or any
                 contract or other commitment or obligation (other than the
                 revolving credit facility with The Bank of New York, as
                 Administrative Agent for the lenders party thereto, in effect
                 on the Effective Date), and is not subject to any order or
                 decree which would be violated by its execution of or
                 performance under this Agreement, except insofar as Debt
                 Strategies, Debt Strategies II and Debt Strategies III have
                 mutually agreed to amend such contract or other commitment or
                 obligation to cure any potential violation as a condition
                 precedent to the Merger.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(g)&nbsp;&nbsp;There are no material contracts
                 outstanding to which Debt Strategies II is a party that have
                 not been disclosed in the N-14 Registration Statement (as
                 defined in subsection (k) below) or will not otherwise be
                 disclosed to each of Debt Strategies and Debt Strategies III
                 prior to the Effective Date.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(h)&nbsp;&nbsp;Debt Strategies II has no known
                 liabilities of a material amount, contingent or otherwise,
                 other than those shown on Debt Strategies II&#146;s statements
                 of assets, liabilities and capital referred to above, those
                 incurred in the ordinary course of its business as an
                 investment company since February 29, 2000 and those incurred
                 in connection with the Merger. Prior to the Effective Date,
                 Debt Strategies II will advise each of Debt Strategies and
                 Debt Strategies III in writing of all known liabilities,
                 contingent or otherwise, whether or not incurred in the
                 ordinary course of business, existing or accrued.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(i)&nbsp;&nbsp;Debt Strategies II has filed, or has
                 obtained extensions to file, all Federal, state and local tax
                 returns which are required to be filed by it, and has paid or
                 has obtained extensions to pay, all Federal, state and local
                 taxes shown on said returns to be due and owing and all
                 assessments received by it, up to and including the taxable
                 year in which the Effective Date occurs. All tax liabilities
                 of Debt Strategies II have been adequately provided for on its
                 books, and no tax deficiency or liability of Debt Strategies
                 II has been asserted and no question with respect thereto has
                 been raised by the Internal Revenue Service (&#147;IRS&#148;)
                 or by any state or local tax authority for taxes in excess of
                 those already paid, up to and including the taxable year in
                 which the Effective Date occurs.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;
                 &nbsp;No consent, approval, authorization or order of any
                 court or governmental authority is required for the
                 consummation by Debt Strategies II of the Merger, except such
                 as may be required under the Securities Act of 1933, as
                 amended (the &#147;1933 Act&#148;), the Securities Exchange
                 Act of 1934, as amended (the &#147;1934 Act&#148;), and the
                 1940 Act or state securities laws (which term as used herein
                 shall include the laws of the District of Columbia and Puerto
                 Rico) and the laws of the State of Maryland.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(k)&nbsp;&nbsp;The registration statement filed by Debt
                 Strategies II on Form N-14 relating to the Debt Strategies II
                 Common Stock to be issued pursuant to this Agreement, and any
                 supplement or amendment thereto or to the documents therein
                 (as amended, the &#147;N-14 Registration Statement&#148;), on
                 the effective date of the N-14 Registration Statement, at the
                 time of the stockholders&#146; meetings referred to in Section
                 7(a) of this Agreement and at the Effective Date, insofar as
                 it relates to Debt Strategies II (i) complied or will comply
                 in all material respects with the provisions of the 1933 Act,
                 the 1934 Act and the 1940 Act and the rules and regulations
                 thereunder and (ii) did not or will not contain any untrue
                 statement of a material fact or omit to state any material
                 fact required to be stated therein or necessary to make the
                 statements therein not misleading; and the prospectus included
                 therein did not or will not contain any untrue statement of a
                 material fact or omit to state any material fact necessary to
                 make the statements therein, in the light of the circumstances
                 under which they were made, not misleading; provided, however,
                 that the representations and warranties in this subsection
                 only shall apply to statements in or omissions from the N-14
                 Registration Statement made in reliance upon and in conformity
                 with information furnished by Debt Strategies II for use in
                 the N-14 Registration Statement as provided in Section 7(e) of
                 this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(l)&nbsp;&nbsp;Debt Strategies II is authorized to issue
                 200,000,000 shares of capital stock, par value $.10 per share,
                 all of which shares are initially classified as Common Stock
                 and each outstanding share of which is fully paid,
                 nonassessable and has full voting rights.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(m)&nbsp;&nbsp;All of the issued and outstanding shares
                 of Common Stock of Debt Strategies II were offered for sale
                 and sold in conformity with all applicable Federal and state
                 securities laws.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(n)&nbsp;&nbsp;The Debt Strategies II Common Stock to be
                 issued pursuant to this Agreement will have been duly
                 authorized and, when issued and delivered pursuant to this
                 Agreement, will be legally and validly issued and will be
                 fully paid and nonassessable and will have full voting rights,
                 and no stockholder of Debt Strategies II will have any
                 preemptive right of subscription or purchase in respect
                 thereof.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(o)&nbsp;&nbsp;At or prior to the Effective Date, the
                 Debt Strategies II Common Stock to be issued pursuant to this
                 Agreement will be duly qualified for offering to the public in
                 all states of the United States in which the sale of shares of
                 Common Stock of Debt Strategies and Debt Strategies III
                 presently are qualified, and there are a sufficient number of
                 shares of Debt Strategies II Common stock registered under the
                 1933 Act and with each pertinent state securities commission
                 to permit the issuance contemplated by this
                 Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(p)&nbsp;&nbsp;At or prior to the Effective Date, Debt
                 Strategies II will have obtained any and all regulatory,
                 Director and stockholder approvals necessary to issue the Debt
                 Strategies II Common Stock.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(q)&nbsp;&nbsp;The books and records of Debt Strategies
                 II made available to each of Debt Strategies and Debt
                 Strategies III and/or its counsel are substantially true and
                 correct and contain no material misstatements or omissions
                 with respect to the operations of Debt Strategies
                 II.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">2.
               <I>Representations and Warranties of Debt
               Strategies.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt
               Strategies represents and warrants to, and agrees with, Debt
               Strategies II and Debt Strategies III that:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;Debt Strategies is a corporation duly
                 organized, validly existing and in good standing in conformity
                 with Maryland Law, and has the power to own all of its assets
                 and to carry out this Agreement. Debt Strategies has all
                 necessary Federal, state and local authorizations to carry on
                 its business as it is now being conducted and to carry out
                 this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;
                 &nbsp;Debt Strategies is duly registered under the 1940 Act as
                 a diversified, closed-end management investment company (File
                 No. 811-08171), and such registration has not been revoked or
                 rescinded and is in full force and effect. Debt Strategies has
                 elected and qualified for the special tax treatment afforded
                 RICs under Sections 851-855 of the Code at all times since its
                 inception and intends to continue to so qualify for its
                 taxable year ending upon its liquidation pursuant to the
                 Merger.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(c)&nbsp;&nbsp;Debt Strategies has full power and
                 authority to enter into and perform its obligations under this
                 Agreement. The execution, delivery and performance of this
                 Agreement has been duly authorized by all necessary action of
                 its Board of Directors, and this Agreement constitutes a valid
                 and binding contract enforceable in accordance with its terms,
                 subject to the effects of bankruptcy, insolvency, moratorium,
                 fraudulent conveyance and similar laws relating to or
                 affecting creditors&#146; rights generally and court decisions
                 with respect thereto.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(d)&nbsp;&nbsp;Each of Debt Strategies II and Debt
                 Strategies III has been furnished with Debt Strategies&#146;
                 Annual Report to Stockholders for the year ended February 29,
                 2000, and the audited financial statements appearing therein
                 fairly present the financial position of Debt Strategies as of
                 the respective dates indicated, in conformity with generally
                 accepted accounting principles applied on a consistent
                 basis.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(e)&nbsp;&nbsp;There are no material legal,
                 administrative or other proceedings pending or, to the
                 knowledge of Debt Strategies, threatened against Debt
                 Strategies which assert liability on the part of Debt
                 Strategies or which materially affect its financial condition
                 or its ability to consummate the Merger. Debt Strategies is
                 not charged with or, to the best of its knowledge, threatened
                 with any violation or investigation of any possible violation
                 of any provisions of any Federal, state or local law or
                 regulation or administrative ruling relating to any aspect of
                 its business.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(f)&nbsp;&nbsp;There are no material contracts
                 outstanding to which Debt Strategies is a party that have not
                 been disclosed in the N-14 Registration Statement or will not
                 otherwise be disclosed to each of Debt Strategies II and Debt
                 Strategies III prior to the Effective Date.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(g)&nbsp;&nbsp;Debt Strategies is not a party to or
                 obligated under any provision of its Articles of
                 Incorporation, as amended, or its by-laws, as amended, or any
                 contract or other commitment or obligation (other than the
                 revolving credit facility with The Bank of New York, as
                 Administrative Agent for the lenders party thereto, in effect
                 on the Effective Date), and is not subject to any order or
                 decree which would be violated by its execution of or
                 performance under this Agreement, except insofar as Debt
                 Strategies, Debt Strategies II and Debt Strategies III have
                 mutually agreed to amend such contract or other commitment or
                 obligation to cure any potential violation as a condition
                 precedent to the Merger.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(h)&nbsp;&nbsp;Debt Strategies has no known liabilities
                 of a material amount, contingent or otherwise, other than
                 those shown on its statements of assets, liabilities and
                 capital referred to above, those incurred in the ordinary
                 course of its business as an investment company since February
                 29, 2000, and those incurred in connection with the Merger.
                 Prior to the Effective Date, Debt Strategies will advise each
                 of Debt Strategies II and Debt Strategies III in writing of
                 all known liabilities, contingent or otherwise, whether or not
                 incurred in the ordinary course of business, existing or
                 accrued.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(i)&nbsp;&nbsp;Debt Strategies has filed, or has
                 obtained extensions to file, all Federal, state and local tax
                 returns which are required to be filed by it, and has paid or
                 has obtained extensions to pay, all Federal, state and local
                 taxes shown on said returns to be due and owing and all
                 assessments received by it, up to and including the taxable
                 year in which the Effective Date occurs. All tax liabilities
                 of Debt Strategies have adequately been provided for on its
                 books, and no tax deficiency or liability of Debt Strategies
                 has been asserted and no question with respect thereto has
                 been raised by the IRS or by any state or local tax authority
                 for taxes in excess of those already paid, up to and including
                 the taxable year in which the Effective Date
                 occurs.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(j)&nbsp;&nbsp;No consent, approval, authorization or
                 order of any court or governmental authority is required for
                 the consummation by Debt Strategies of the Merger, except such
                 as may be required under the 1933 Act, the 1934 Act, and the
                 1940 Act or state securities laws (which term as used herein
                 shall include the laws of the District of Columbia and Puerto
                 Rico) and the laws of the State of Maryland.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;
                 &nbsp;The N-14 Registration Statement, on its effective date,
                 at the time of the stockholders&#146; meetings referred to in
                 Section 7(a) of this Agreement and on the Effective Date,
                 insofar as it relates to Debt Strategies (i) complied or will
                 comply in all material respects with the provisions of the
                 1933 Act, the 1934 Act and the 1940 Act and the rules and
                 regulations thereunder, and (ii) did not or will not contain
                 any untrue statement of a material fact or omit to state any
                 material fact required to be stated therein or necessary to
                 make the statements therein not misleading; and the prospectus
                 included therein did not or will not contain any untrue
                 statement of a material fact or omit to state any material
                 fact necessary to make the statements therein, in the light of
                 the circumstances under which they were made, not misleading;
                 provided, however, that the representations and warranties in
                 this subsection shall apply only to statements in or omissions
                 from the N-14 Registration Statement made in reliance upon and
                 in conformity with information furnished by Debt Strategies
                 for use in the N-14 Registration Statement as provided in
                 Section 7(e) of this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(l)&nbsp;&nbsp;Debt Strategies is authorized to issue
                 200,000,000 shares of capital stock, par value $.10 per share,
                 all of which shares are initially classified as Common Stock
                 and each outstanding share of which is fully paid,
                 nonassessable and has full voting rights.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(m)&nbsp;&nbsp;All of the issued and outstanding shares
                 of Common Stock of Debt Strategies were offered for sale and
                 sold in conformity with all applicable Federal and state
                 securities laws.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(n)&nbsp;&nbsp;The books and records of Debt Strategies
                 made available to each of Debt Strategies II and Debt
                 Strategies III and/or its counsel are substantially true and
                 correct and contain no material misstatements or omissions
                 with respect to the operations of Debt Strategies.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">3.
               <I>Representations and Warranties of Debt Strategies
               III.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt
               Strategies III represents and warrants to, and agrees with, Debt
               Strategies II and Debt Strategies that:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;Debt Strategies III is a corporation duly
                 organized, validly existing and in good standing in conformity
                 with Maryland Law, and has the power to own all of its assets
                 and to carry out this Agreement. Debt Strategies III has all
                 necessary Federal, state and local authorizations to carry on
                 its business as it is now being conducted and to carry out
                 this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(b)&nbsp;&nbsp;Debt Strategies III is duly registered
                 under the 1940 Act as a diversified, closed-end management
                 investment company (File No. 811-08823), and such registration
                 has not been revoked or rescinded and is in full force and
                 effect. Debt Strategies III has elected and qualified for the
                 special tax treatment afforded RICs under Sections 851-855 of
                 the Code at all times since its inception and intends to
                 continue to so qualify for its taxable year ending upon its
                 liquidation pursuant to the Merger.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(c)&nbsp;&nbsp;Debt Strategies III has full power and
                 authority to enter into and perform its obligations under this
                 Agreement. The execution, delivery and performance of this
                 Agreement has been duly authorized by all necessary action of
                 its Board of Directors, and this Agreement constitutes a valid
                 and binding contract enforceable in accordance with its terms,
                 subject to the effects of bankruptcy, insolvency, moratorium,
                 fraudulent conveyance and similar laws relating to or
                 affecting creditors&#146; rights generally and court decisions
                 with respect thereto.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(d)&nbsp;&nbsp;Each of Debt Strategies II and Debt
                 Strategies has been furnished with Debt Strategies III&#146;s
                 Annual Report to Stockholders for the year ended February 29,
                 2000, and the audited financial statements appearing therein
                 fairly present the financial position of Debt Strategies III
                 as of the respective dates indicated, in conformity with
                 generally accepted accounting principles applied on a
                 consistent basis.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(e)&nbsp;&nbsp;There are no material legal,
                 administrative or other proceedings pending or, to the
                 knowledge of Debt Strategies III, threatened against Debt
                 Strategies III which assert liability on the part of Debt
                 Strategies III or which materially affect its financial
                 condition or its ability to consummate the Merger. Debt
                 Strategies III is not charged with or, to the best of its
                 knowledge, threatened with any violation or investigation of
                 any possible violation of any provisions of any Federal, state
                 or local law or regulation or administrative ruling relating
                 to any aspect of its business.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;
                 &nbsp;There are no material contracts outstanding to which
                 Debt Strategies III is a party that have not been disclosed in
                 the N-14 Registration Statement or will not otherwise be
                 disclosed to each of Debt Strategies II and Debt Strategies
                 prior to the Effective Date.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(g)&nbsp;&nbsp;Debt Strategies III is not a party to or
                 obligated under any provision of its Articles of
                 Incorporation, as amended, or its by-laws, as amended, or any
                 contract or other commitment or obligation (other than the
                 revolving credit facility with Fleet National Bank, as
                 Administrative Agent for the lenders party thereto, in effect
                 on the Effective Date), and is not subject to any order or
                 decree which would be violated by its execution of or
                 performance under this Agreement, except insofar as Debt
                 Strategies, Debt Strategies II and Debt Strategies III have
                 mutually agreed to amend such contract or other commitment or
                 obligation to cure any potential violation as a condition
                 precedent to the Merger.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(h)&nbsp;&nbsp;Debt Strategies III has no known
                 liabilities of a material amount, contingent or otherwise,
                 other than those shown on its statements of assets,
                 liabilities and capital referred to above, those incurred in
                 the ordinary course of its business as an investment company
                 since February 29, 2000, and those incurred in connection with
                 the Merger. Prior to the Effective Date, Debt Strategies III
                 will advise each of Debt Strategies II and Debt Strategies in
                 writing of all known liabilities, contingent or otherwise,
                 whether or not incurred in the ordinary course of business,
                 existing or accrued.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(i)&nbsp;&nbsp;Debt Strategies III has filed, or has
                 obtained extensions to file, all Federal, state and local tax
                 returns which are required to be filed by it, and has paid or
                 has obtained extensions to pay, all Federal, state and local
                 taxes shown on said returns to be due and owing and all
                 assessments received by it, up to and including the taxable
                 year in which the Effective Date occurs. All tax liabilities
                 of Debt Strategies III have adequately been provided for on
                 its books, and no tax deficiency or liability of Debt
                 Strategies III has been asserted and no question with respect
                 thereto has been raised by the IRS or by any state or local
                 tax authority for taxes in excess of those already paid, up to
                 and including the taxable year in which the Effective Date
                 occurs.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(j)&nbsp;&nbsp;No consent, approval, authorization or
                 order of any court or governmental authority is required for
                 the consummation by Debt Strategies III of the Merger, except
                 such as may be required under the 1933 Act, the 1934 Act, and
                 the 1940 Act or state securities laws (which term as used
                 herein shall include the laws of the District of Columbia and
                 Puerto Rico) and the laws of the State of
                 Maryland.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(k)&nbsp;&nbsp;The N-14 Registration Statement, on its
                 effective date, at the time of the stockholders&#146; meetings
                 referred to in Section 7(a) of this Agreement and on the
                 Effective Date, insofar as it relates to Debt Strategies III
                 (i) complied or will comply in all material respects with the
                 provisions of the 1933 Act, the 1934 Act and the 1940 Act and
                 the rules and regulations thereunder, and (ii) did not or will
                 not contain any untrue statement of a material fact or omit to
                 state any material fact required to be stated therein or
                 necessary to make the statements therein not misleading; and
                 the prospectus included therein did not or will not contain
                 any untrue statement of a material fact or omit to state any
                 material fact necessary to make the statements therein, in the
                 light of the circumstances under which they were made, not
                 misleading; <I>provided, however</I>, that the representations
                 and warranties in this subsection shall apply only to
                 statements in or omissions from the N-14 Registration
                 Statement made in reliance upon and in conformity with
                 information furnished by Debt Strategies III for use in the
                 N-14 Registration Statement as provided in Section 7(e) of
                 this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(l)&nbsp;&nbsp;Debt Strategies III is authorized to
                 issue 200,000,000 shares of capital stock, par value $.10 per
                 share, all of which shares are initially classified as Common
                 Stock and each outstanding share of which is fully paid,
                 nonassessable and has full voting rights.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(m)&nbsp;&nbsp;All of the issued and outstanding shares
                 of Common Stock of Debt Strategies III were offered for sale
                 and sold in conformity with all applicable Federal and state
                 securities laws.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(n)&nbsp;&nbsp;The books and records of Debt Strategies
                 III made available to each of Debt Strategies II and Debt
                 Strategies and/or its counsel are substantially true and
                 correct and contain no material misstatements or omissions
                 with respect to the operations of Debt Strategies
                 III.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> 4.
               <I>The Merger.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
               &nbsp;&nbsp;Subject to the requisite approvals of the
               stockholders of each of Debt Strategies, Debt Strategies II and
               Debt Strategies III being given, and to the other terms and
               conditions contained herein, Debt Strategies, Debt Strategies II
               and Debt Strategies III agree that (i) each of Debt Strategies
               and Debt Strategies III will be merged with and into Debt
               Strategies II, (ii) the separate existence of each of Debt
               Strategies and Debt Strategies III will cease, (iii) Debt
               Strategies II will be the surviving corporation, (iv) Debt
               Strategies II will change its name to Debt Strategies Fund, Inc.
               immediately after the Effective Date and (v) each share of
               Common Stock of each of Debt Strategies and Debt Strategies III
               outstanding at the Effective Date will be converted into the
               right to receive an equivalent dollar amount (to the nearest one
               ten-thousandth of one cent) of full shares of Debt Strategies II
               Common Stock, plus cash in lieu of fractional shares, computed
               based on the net asset value per share of each Fund at the
               Effective Date and (v) the shares of Debt Strategies II
               outstanding as of the Effective Date will remain issued and
               outstanding.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
               &nbsp;&nbsp;As soon as practicable after satisfaction of all
               conditions to the Merger, Debt Strategies, Debt Strategies II
               and Debt Strategies III will jointly file the Articles of Merger
               with SDAT and make all other filings or recordings required by
               Maryland Law in connection with the Merger.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
               &nbsp;&nbsp;From and after the Effective Date, Debt Strategies
               II will possess all of the rights, privileges, purposes, powers
               and franchises and be subject to all of the restrictions,
               liabilities, obligations, disabilities and duties of Debt
               Strategies, Debt Strategies II and Debt Strategies III, all as
               provided under Maryland Law.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">5.
               <I>Conversion to Debt Strategies II Common
               Stock.</I></FONT></DIV>

             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the
               Effective Date, each share of Common Stock of each of Debt
               Strategies and Debt Strategies III will be converted into the
               right to receive an equivalent dollar amount (to the nearest one
               ten-thousandth of one cent) of full shares of Debt Strategies II
               Common Stock, plus cash in lieu of fractional shares, computed
               based on the net asset value per share of each Fund at the
               Effective Date. The net asset value per share of Debt
               Strategies, Debt Strategies II and Debt Strategies III shall be
               determined as of the Effective Date, and no formula will be used
               to adjust the net asset value so determined of either Debt
               Strategies, Debt Strategies II or Debt Strategies III to take
               into account differences in realized and unrealized gains and
               losses. The value of the assets of Debt Strategies and Debt
               Strategies III to be transferred to Debt Strategies II shall be
               determined by Debt Strategies II pursuant to the procedures
               utilized by Debt Strategies II in valuing its own assets and
               determining its own liabilities for purposes of the Merger. Such
               valuation and determination shall be made by Debt Strategies II
               in cooperation with Debt Strategies and Debt Strategies III and
               shall be confirmed in writing by Debt Strategies II to Debt
               Strategies and Debt Strategies III. The net asset value per
               share of Debt Strategies II Common Stock shall be determined in
               accordance with such procedures, and Debt Strategies II shall
               certify the computations involved. Debt Strategies II shall
               issue to the stockholders of Debt Strategies and Debt Strategies
               III separate certificates or share deposit receipts for the Debt
               Strategies II Common Stock by delivering the certificates or
               share deposit receipts evidencing ownership of the Debt
               Strategies II Common Stock to The Bank of New York, as the
               transfer agent and registrar for Debt Strategies II Common
               Stock. With respect to any Debt Strategies or Debt Strategies
               III stockholder holding certificates evidencing ownership of
               either the Common Stock of Debt Strategies or Debt Strategies
               III as of the Effective Date, and subject to Debt Strategies II
               being informed thereof in writing by Debt Strategies or Debt
               Strategies III, Debt Strategies II will not permit such
               stockholder to receive new certificates evidencing ownership of
               Debt Strategies II Common Stock, exchange Debt Strategies II
               Common Stock credited to such stockholder&#146;s account for
               shares of other investment companies managed by Fund Asset
               Management, L.P. or any of its affiliates, or pledge or redeem
               such Debt Strategies II Common Stock, in any case, until such
               stockholder has surrendered his or her outstanding certificates
               evidencing ownership of the Common Stock of Debt Strategies or
               Debt Strategies III or, in the event of lost certificates,
               posted adequate bond. Each of Debt Strategies and Debt
               Strategies III, at its own expense, will request its
               stockholders to surrender their outstanding certificates
               evidencing ownership of the Common Stock of Debt Strategies and
               Debt Strategies III or post adequate bond therefor. Dividends
               payable to holders of record of shares of Debt Strategies II
               Common Stock as of any date after the Effective Date and prior
               to the exchange of


             certificates by any stockholder of Debt Strategies and Debt
               Strategies III shall be paid to such stockholder, without
               interest; however, such dividends shall not be paid unless and
               until such stockholder surrenders his or her stock certificates
               of Debt Strategies and Debt Strategies III for
               exchange.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No
               fractional shares of Debt Strategies II Common Stock will be
               issued to Debt Strategies or Debt Strategies III stockholders.
               In lieu thereof, Debt Strategies II&#146;s transfer agent, The
               Bank of New York, will aggregate all fractional shares of Debt
               Strategies II and sell the resulting full shares on the New York
               Stock Exchange at the current market price for shares of Debt
               Strategies II for the account of all holders of fractional
               interests, and each such holder will receive such holder&#146;s
               <I>pro rata</I> share of the proceeds of such sale upon
               surrender of such holder&#146;s Debt Strategies II Common Stock
               certificates.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">6.
               <I>Payment of Expenses.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
               &nbsp;&nbsp;With respect to expenses incurred in connection with
               the Merger (i) each Fund shall pay all expenses incurred that
               are attributable solely to such Fund and the conduct of its
               business, and (ii) Debt Strategies II shall pay, subsequent to
               the Exchange Date and pro rata according to each Fund&#146;s net
               assets at the Effective Date, all expenses incurred in
               connection with the Merger, including, but not limited to, all
               costs related to the preparation and distribution of the N-14
               Registration Statement. Such fees and expenses shall include
               legal and accounting fees, printing costs, filing fees, stock
               exchange fees, portfolio transfer taxes (if any) and any similar
               expenses incurred in connection with the Merger.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
               &nbsp;&nbsp;If for any reason the Merger is not consummated, no
               party shall be liable to any other party for any damages
               resulting therefrom, including, without limitation,
               consequential damages.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">7.
               <I>Covenants of Debt Strategies, Debt Strategies II and Debt
               Strategies III.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
               &nbsp;&nbsp;Debt Strategies, Debt Strategies II and Debt
               Strategies III each agrees to hold an annual meeting of its
               respective stockholders as soon as is practicable after the
               effective date of the N-14 Registration Statement for the
               purpose of considering the Merger as described in this
               Agreement.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
               &nbsp;&nbsp;Debt Strategies, Debt Strategies II and Debt
               Strategies III each covenants to operate its respective business
               as presently conducted between the date hereof and the Effective
               Date.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
               &nbsp;&nbsp;Each of Debt Strategies, Debt Strategies II and Debt
               Strategies III agrees that, as soon as practicable after
               satisfaction of all conditions to the Merger, they will jointly
               file executed Articles of Merger with SDAT and make all other
               filings or recordings required by Maryland Law in connection
               with the Merger.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
               &nbsp;&nbsp;Debt Strategies II undertakes that if the Merger is
               consummated, it will file, or cause its agents to file, an
               application pursuant to Section 8(f) of the 1940 Act for an
               order declaring that each of Debt Strategies and Debt Strategies
               III, respectively, has ceased to be a registered investment
               company.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
               &nbsp;&nbsp;Debt Strategies II will file the N-14 Registration
               Statement with the Securities and Exchange Commission (the
               &#147;Commission&#148;) and will use its best efforts to provide
               that the N-14 Registration Statement becomes effective as
               promptly as practicable. Each of Debt Strategies and Debt
               Strategies III, respectively, agrees to cooperate fully with
               Debt Strategies II, and each will furnish to Debt Strategies II
               the information relating to itself to be set forth in the N-14
               Registration Statement as required by the 1933 Act, the 1934
               Act, the 1940 Act, and the rules and regulations thereunder and
               the state securities laws.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
               &nbsp;&nbsp;Debt Strategies, Debt Strategies II and Debt
               Strategies III each agrees to proceed as promptly as possible to
               cause to be made the necessary filings, if any, under the
               Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
               &#147;HSR Act&#148;) with respect to the transactions
               contemplated by this Agreement and to ensure that the related
               waiting period expires or is otherwise terminated at the
               earliest possible time.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;
               &nbsp;Debt Strategies II agrees that it has no plan or intention
               to sell or otherwise dispose of the assets of Debt Strategies
               and Debt Strategies III to be acquired in the Merger, except for
               dispositions made in the ordinary course of
               business.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)
               &nbsp;&nbsp;Debt Strategies, Debt Strategies II and Debt
               Strategies III each agrees that by the Effective Date all of its
               Federal and other tax returns and reports required to be filed
               on or before such date shall have been filed and all taxes shown
               as due on said returns either have been paid or adequate
               liability reserves have been provided for the payment of such
               taxes. In connection with this covenant, Debt Strategies, Debt
               Strategies II and Debt Strategies III agree to cooperate with
               each other in filing any tax return, amended return or claim for
               refund, determining a liability for taxes or a right to a refund
               of taxes or participating in or conducting any audit or other
               proceeding in respect of taxes. Debt Strategies II agrees to
               retain for a period of ten (10) years following the Effective
               Date all returns, schedules and work papers and all material
               records or other documents relating to tax matters of Debt
               Strategies and Debt Strategies III for each of Debt Strategies
               and Debt Strategies III&#146;s taxable periods first ending
               after the Effective Date and for all prior taxable periods. Any
               information obtained under this subsection shall be kept
               confidential except as otherwise may be necessary in connection
               with the filing of returns or claims for refund or in conducting
               an audit or other proceeding. After the Effective Date, Debt
               Strategies II shall prepare, or cause its agents to prepare, any
               Federal, state or local tax returns, including any Forms 1099,
               required to be filed by Debt Strategies or Debt Strategies III
               with respect to their final taxable years ending with each of
               Debt Strategies and Debt Strategies III&#146;s complete
               liquidation and for any prior periods or taxable years and
               further shall cause such tax returns and Forms 1099 to be duly
               filed with the appropriate taxing authorities. Notwithstanding
               the aforementioned provisions of this subsection, any expenses
               incurred by Debt Strategies II (other than for payment of taxes)
               in connection with the preparation and filing of said tax
               returns and Forms 1099 after the Effective Date shall be borne
               by Debt Strategies II.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)
               &nbsp;&nbsp;Debt Strategies, Debt Strategies II and Debt
               Strategies III each agrees to mail to each of its respective
               stockholders of record entitled to vote at the annual meeting of
               stockholders at which action is to be considered regarding this
               Agreement, in sufficient time to comply with requirements as to
               notice thereof, a combined Proxy Statement and Prospectus which
               complies in all material respects with the applicable provisions
               of Section 14(a) of the 1934 Act and Section 20(a) of the 1940
               Act, and the rules and regulations, respectively,
               thereunder.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)
               &nbsp;&nbsp;Debt Strategies II agrees that at the Effective Date
               it will have entered into an agreement with one or more
               financial institutions or other lenders, in form and substance
               acceptable to Debt Strategies II in its sole discretion,
               providing for a revolving credit facility for Debt Strategies II
               in a principal amount approximately equal to the aggregate
               commitment amount of the credit facilities then outstanding for
               Debt Strategies, Debt Strategies II and Debt Strategies III (the
               &#147;Outstanding Credit Facilities&#148;) at terms no less
               advantageous to Debt Strategies, Debt Strategies II and Debt
               Strategies III, taking into account current market conditions at
               the Effective Date, than the terms at which the Outstanding
               Credit Facilities can be renewed or refinanced individually at
               the Effective Date.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)
               &nbsp;&nbsp;Following the consummation of the Merger, Debt
               Strategies II expects to stay in existence and continue its
               business as a closed-end management investment company
               registered under the 1940 Act.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">8.
               <I>Effective Date.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
               &nbsp;&nbsp;The Merger shall become effective at such time as
               the Articles of Merger are accepted for filing by SDAT or at
               such later time as is specified in the Articles of
               Merger.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
               &nbsp;&nbsp;Prior to the Effective Date, each of Debt Strategies
               and Debt Strategies III shall have made arrangements with its
               transfer agent to deliver to Debt Strategies II, as soon as
               practicable after the Effective Date, a list of the names and
               addresses of all of the stockholders of record of Debt
               Strategies and Debt Strategies III on the Effective Date and the
               number of shares of Common Stock of Debt Strategies and Debt
               Strategies III owned by each such stockholder, certified by its
               transfer agent or by the Fund&#146;s President to the best of
               their knowledge and belief.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> 9.
               <I>Debt Strategies II Conditions.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               obligations of Debt Strategies II hereunder shall be subject to
               the following conditions:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;That this Agreement shall have been
                 adopted, and the Merger shall have been approved, by the
                 affirmative vote of the holders of more than fifty percent of
                 the Common Stock of Debt Strategies II issued and outstanding
                 and entitled to vote thereon; and that each of Debt Strategies
                 and Debt Strategies III, respectively, shall have delivered to
                 Debt Strategies II a copy of the resolution approving this
                 Agreement adopted by such Fund&#146;s Board of Directors and
                 stockholders, certified by its Secretary.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(b)&nbsp;&nbsp;That each of Debt Strategies and Debt
                 Strategies III, respectively, shall have furnished to Debt
                 Strategies II a statement of assets, liabilities and capital,
                 together with a schedule of investments with their respective
                 dates of acquisition and tax costs, certified on its behalf by
                 its respective President (or any Vice President) and its
                 respective Treasurer, and a certificate of both such officers,
                 dated the Effective Date, certifying that there has been no
                 material adverse change in its respective financial position
                 since the date of such Fund&#146;s most recent Annual or
                 Semi-Annual Report to Stockholders, other than changes in its
                 portfolio securities since that date or changes in the market
                 value of its portfolio securities.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(c)&nbsp;&nbsp;That each of Debt Strategies and Debt
                 Strategies III, respectively, shall have furnished to Debt
                 Strategies II a certificate signed by its respective President
                 (or any Vice President) and its respective Treasurer, dated
                 the Effective Date, certifying that as of the Effective Date
                 all representations and warranties made in this Agreement are
                 true and correct in all material respects with the same effect
                 as if made at and as of the Effective Date and that such Fund
                 has complied with all of the agreements and satisfied all of
                 the conditions on its part to be performed or satisfied at or
                 prior to such date.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(d)&nbsp;&nbsp;That each of Debt Strategies and Debt
                 Strategies III, respectively, shall have delivered to Debt
                 Strategies II a letter from Deloitte &amp; Touche </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">, dated
                 the Effective Date, stating that such firm has performed a
                 limited review of the Federal, state and local income tax
                 returns for the year ended February 29, 2000 (which returns
                 originally were prepared and filed by each of Debt Strategies
                 and Debt Strategies III, respectively), and that based on such
                 limited review, nothing came to their attention which caused
                 them to believe that such returns did not properly reflect, in
                 all material respects, the Federal, state and local income
                 taxes of each of Debt Strategies and Debt Strategies III,
                 respectively, for the period covered thereby; and that for the
                 period from March 1, 2000 to and including the Effective Date
                 and for any taxable year ending upon its dissolution, such
                 firm has performed a limited review to ascertain the amount of
                 applicable Federal, state and local taxes, and has determined
                 that either such amount has been paid or reserves established
                 for payment of such taxes, this review to be based on
                 unaudited financial data; and that based on such limited
                 review, nothing has come to their attention which caused them
                 to believe that the taxes paid or reserves set aside for
                 payment of such taxes were not adequate in all material
                 respects for the satisfaction of Federal, state and local
                 taxes for the period from March 1, 2000 to and including the
                 Effective Date and for any taxable year ending upon its
                 dissolution or that either of Debt Strategies or Debt
                 Strategies III would not continue to qualify as a regulated
                 investment company for Federal income tax
                 purposes.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(e)&nbsp;&nbsp;That there shall not be any material
                 litigation pending with respect to the matters contemplated by
                 this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(f)&nbsp;&nbsp;That Debt Strategies II shall have
                 received an opinion of Brown &amp; Wood </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">, as
                 counsel to Debt Strategies, Debt Strategies II and Debt
                 Strategies III, in form and substance satisfactory to Debt
                 Strategies II and dated the Effective Date, to the effect that
                 (i) each of Debt Strategies, Debt Strategies II and Debt
                 Strategies III, respectively, is a corporation duly organized,
                 validly existing and in good standing in conformity with
                 Maryland Law; (ii) the Debt Strategies II Common Stock to be
                 issued pursuant to this Agreement is duly authorized and, upon
                 delivery, will be validly issued and outstanding and fully
                 paid and nonassessable by Debt Strategies II, and no
                 stockholder of Debt Strategies II has any preemptive right to
                 subscription or purchase in respect thereof (pursuant to the
                 Articles of Incorporation, as amended, or the by-laws of Debt
                 Strategies II or, to the best of such counsel&#146;s
                 knowledge, otherwise); (iii) this Agreement has been duly
                 authorized, executed and delivered by each of Debt Strategies,
                 Debt Strategies II and Debt


               Strategies III, respectively, and represents a valid and binding
                 contract, enforceable in accordance with its terms, except as
                 enforceability may be limited by bankruptcy, insolvency,
                 reorganization or other similar laws pertaining to the
                 enforcement of creditors&#146; rights generally and by
                 equitable principles; (iv) to the best of such counsel&#146;s
                 knowledge, no consent, approval, authorization or order of any
                 United States federal or Maryland state court or governmental
                 authority is required for the consummation by Debt Strategies,
                 Debt Strategies II and Debt Strategies III of the Merger,
                 except such as have been obtained under the 1933 Act, the 1934
                 Act and the 1940 Act and the published rules and regulations
                 of the Commission thereunder and under Maryland law and such
                 as may be required under state securities laws; (v) the N-14
                 Registration Statement has become effective under the 1933
                 Act, no stop order suspending the effectiveness of the N-14
                 Registration Statement has been issued and no proceedings for
                 that purpose have been instituted or are pending or
                 contemplated under the 1933 Act, and the N-14 Registration
                 Statement, and each amendment or supplement thereto, as of
                 their respective effective dates, appear on their face to be
                 appropriately responsive in all material respects to the
                 requirements of the 1933 Act, the 1934 Act and the 1940 Act
                 and the published rules and regulations of the Commission
                 thereunder; (vi) the descriptions in the N-14 Registration
                 Statement of statutes, legal and governmental proceedings and
                 contracts and other documents are accurate and fairly present
                 the information required to be shown; (vii) such counsel does
                 not know of any statutes, legal or governmental proceedings or
                 contracts or other documents related to the Merger of a
                 character required to be described in the N-14 Registration
                 Statement which are not described therein or, if required to
                 be filed, filed as required; (viii) the execution and delivery
                 of this Agreement does not, and the consummation of the Merger
                 will not, violate any material provision of the Articles of
                 Incorporation, as amended, the by-laws, as amended, or any
                 agreement (known to such counsel) to which either Debt
                 Strategies, Debt Strategies II or Debt Strategies III is a
                 party or by which either Debt Strategies, Debt Strategies II
                 or Debt Strategies III is bound, except insofar as the parties
                 have agreed to amend such provision as a condition precedent
                 to the Merger; (ix) neither Debt Strategies, Debt Strategies
                 II nor Debt Strategies III, to the knowledge of such counsel,
                 is required to qualify to do business as a foreign corporation
                 in any jurisdiction except as may be required by state
                 securities or blue sky laws, and except where each has so
                 qualified or the failure so to qualify would not have a
                 material adverse effect on Debt Strategies, Debt Strategies II
                 or Debt Strategies III, or their respective stockholders; (x)
                 to the best of such counsel&#146;s knowledge, no material
                 suit, action or legal or administrative proceeding is pending
                 or threatened against Debt Strategies, Debt Strategies II or
                 Debt Strategies III; and (xi) all corporate actions required
                 to be taken by Debt Strategies, Debt Strategies II and Debt
                 Strategies III to authorize this Agreement and to effect the
                 Merger have been duly authorized by all necessary corporate
                 actions on the part of Debt Strategies, Debt Strategies II and
                 Debt Strategies III. Such opinion also shall state that (x)
                 while such counsel cannot make any representation as to the
                 accuracy or completeness of statements of fact in the N-14
                 Registration Statement or any amendment or supplement thereto,
                 nothing has come to their attention that would lead them to
                 believe that, on the respective effective dates of the N-14
                 Registration Statement and any amendment or supplement
                 thereto, (1) the N-14 Registration Statement or any amendment
                 or supplement thereto contained any untrue statement of a
                 material fact or omitted to state any material fact required
                 to be stated therein or necessary to make the statements
                 therein not misleading; and (2) the prospectus included in the
                 N-14 Registration Statement contained any untrue statement of
                 a material fact or omitted to state any material fact
                 necessary to make the statements therein, in the light of the
                 circumstances under which they were made, not misleading; and
                 (y) such counsel does not express any opinion or belief as to
                 the financial statements, other financial data, statistical
                 data or information relating to Debt Strategies, Debt
                 Strategies II or Debt Strategies III contained or incorporated
                 by reference in the N-14 Registration Statement. In giving the
                 opinion set forth above, Brown &amp; Wood </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> may
                 state that it is relying on certificates of officers of Debt
                 Strategies, Debt Strategies II and Debt Strategies III with
                 regard to matters of fact and certain certificates and written
                 statements of governmental officials with respect to the good
                 standing of Debt Strategies, Debt Strategies II and Debt
                 Strategies III.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(g)&nbsp;&nbsp;That Debt Strategies II shall have
                 received an opinion from Brown &amp; Wood </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">, as
                 counsel to Debt Strategies, Debt Strategies II and Debt
                 Strategies III, in form and substance satisfactory to Debt
                 Strategies II and dated the Effective Date, to the effect that
                 for Federal tax purposes (i) the Merger as
               provided in this Agreement will constitute a merger within the
                 meaning of Section 368(a)(1)(A) of the Code and Debt
                 Strategies, Debt Strategies II and Debt Strategies III will
                 each be deemed a &#147;party&#148; to a reorganization within
                 the meaning of Section 368(b) of the Code; (ii) in accordance
                 with Section 361(a) of the Code, no gain or loss will be
                 recognized to either Debt Strategies or Debt Strategies III as
                 a result of the Merger or on the distribution of Debt
                 Strategies II Common Stock to Debt Strategies and Debt
                 Strategies III stockholders under Section 361(c)(1) of the
                 Code; (iii) under Section 1032 of the Code, no gain or loss
                 will be recognized to Debt Strategies II as a result of the
                 Merger; (iv) in accordance with Section 354(a)(1) of the Code,
                 no gain or loss will be recognized to the stockholders of Debt
                 Strategies and Debt Strategies III on the conversion of their
                 Debt Strategies and Debt Strategies III shares into Debt
                 Strategies II Common Stock (except to the extent such
                 stockholders are paid cash in lieu of fractional shares of
                 Debt Strategies II in the Merger); (v) in accordance with
                 Section 362(b) of the Code, the tax basis of the Debt
                 Strategies and Debt Strategies III assets in the hands of Debt
                 Strategies II will be the same as the tax basis of such assets
                 in the hands of Debt Strategies and Debt Strategies III
                 immediately prior to the consummation of the Merger; (vi) in
                 accordance with Section 358 of the Code, immediately after the
                 Merger, the tax basis of the Debt Strategies II Common Stock
                 received by the stockholders of Debt Strategies and Debt
                 Strategies III in the Merger will be equal to the tax basis of
                 the shares of Debt Strategies and Debt Strategies III
                 converted pursuant to the Merger; (vii) in accordance with
                 Section 1223 of the Code, a stockholder&#146;s holding period
                 for the Debt Strategies II Common Stock will be determined by
                 including the period for which he or she held the Common Stock
                 of Debt Strategies or Debt Strategies III converted pursuant
                 to the Merger, provided, that such Debt Strategies or Debt
                 Strategies III shares were held as a capital asset; (viii) in
                 accordance with Section 1223 of the Code, Debt Strategies
                 II&#146;s holding period with respect to the Debt Strategies
                 and Debt Strategies III assets transferred will include the
                 period for which such assets were held by Debt Strategies and
                 Debt Strategies III; (ix) the payment of cash to Debt
                 Strategies and Debt Strategies III stockholders in lieu of
                 fractional shares of Debt Strategies II will be treated as
                 though the fractional shares were distributed as part of the
                 Merger and then redeemed by Debt Strategies II, with the
                 result that each Debt Strategies and Debt Strategies III
                 stockholder will generally have short- or long-term capital
                 gain or loss to the extent the cash distribution differs from
                 such stockholder&#146;s basis allocable to the Debt Strategies
                 II fractional shares; and (x) the taxable years of Debt
                 Strategies and Debt Strategies III will end on the effective
                 date of the Merger, and pursuant to Section 381(a) of the Code
                 and regulations thereunder, Debt Strategies II will succeed to
                 and take into account certain tax attributes of Debt
                 Strategies and Debt Strategies III, such as earnings and
                 profits, capital loss carryovers and method of
                 accounting.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(h)&nbsp;&nbsp;That Debt Strategies II shall have
                 received from Deloitte &amp; Touche </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> a
                 letter dated within three days prior to the effective date of
                 the N-14 Registration Statement and a similar letter dated
                 within five days prior to the Effective Date, in form and
                 substance satisfactory to Debt Strategies II, to the effect
                 that (i) they are independent public accountants with respect
                 to each of Debt Strategies and Debt Strategies III within the
                 meaning of the 1933 Act and the applicable published rules and
                 regulations thereunder; (ii) in their opinion, the financial
                 statements and supplementary information of each of Debt
                 Strategies and Debt Strategies III included or incorporated by
                 reference in the N-14 Registration Statement and reported on
                 by them comply as to form in all material respects with the
                 applicable accounting requirements of the 1933 Act and the
                 published rules and regulations thereunder; (iii) on the basis
                 of limited procedures agreed upon by Debt Strategies, Debt
                 Strategies II and Debt Strategies III and described in such
                 letter (but not an examination in accordance with generally
                 accepted auditing standards) consisting of a reading of any
                 unaudited interim financial statements and unaudited
                 supplementary information of each of Debt Strategies and Debt
                 Strategies III included in the N-14 Registration Statement,
                 and inquiries of certain officials of each of Debt Strategies
                 and Debt Strategies III responsible for financial and
                 accounting matters, nothing came to their attention that
                 caused them to believe that (a) such unaudited financial
                 statements and related unaudited supplementary information do
                 not comply as to form in all material respects with the
                 applicable accounting requirements of the 1933 Act and the
                 published rules and regulations thereunder, (b) such unaudited
                 financial statements are not fairly presented in conformity
                 with generally accepted accounting principles, applied on a
                 basis substantially consistent with that of the audited
                 financial statements, or (c) such unaudited supplementary
                 information is not fairly stated in all material respects in
                 relation to the unaudited financial
               statements taken as a whole; and (iv) on the basis of limited
                 procedures agreed upon by Debt Strategies, Debt Strategies II
                 and Debt Strategies III and described in such letter (but not
                 an examination in accordance with generally accepted auditing
                 standards), the information relating to each of Debt
                 Strategies and Debt Strategies III appearing in the N-14
                 Registration Statement, which information is expressed in
                 dollars (or percentages derived from such dollars) concerning
                 each of Debt Strategies and Debt Strategies III (with the
                 exception of performance comparisons, if any), has been
                 obtained from the accounting records of each of Debt
                 Strategies and Debt Strategies III or from schedules prepared
                 by officials of each of Debt Strategies and Debt Strategies
                 III having responsibility for financial and reporting matters
                 and such information is in agreement with such records,
                 schedules or computations made therefrom.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(i)&nbsp;&nbsp;That the assets or liabilities of each of
                 Debt Strategies and Debt Strategies III, respectively, to be
                 transferred to Debt Strategies II shall not include any assets
                 or liabilities which Debt Strategies II, by reason of charter
                 limitations or otherwise, may not properly acquire or
                 assume.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(j)&nbsp;&nbsp;That the N-14 Registration Statement
                 shall have become effective under the 1933 Act and no stop
                 order suspending such effectiveness shall have been instituted
                 or, to the knowledge of either of Debt Strategies or Debt
                 Strategies III, contemplated by the Commission.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(k)&nbsp;&nbsp;That the Commission shall not have issued
                 an unfavorable advisory report under Section 25(b) of the 1940
                 Act, nor instituted or threatened to institute any proceeding
                 seeking to enjoin consummation of the Merger under Section
                 25(c) of the 1940 Act, no other legal, administrative or other
                 proceeding shall be instituted or threatened which would
                 materially affect the financial condition of either of Debt
                 Strategies or Debt Strategies III or would prohibit the
                 Merger.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(l)&nbsp;&nbsp;That Debt Strategies II shall have
                 received from the Commission such orders or interpretations as
                 Brown &amp; Wood </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">, as
                 counsel to Debt Strategies II, deems reasonably necessary or
                 desirable under the 1933 Act and the 1940 Act in connection
                 with the Merger, provided, that such counsel shall have
                 requested such orders as promptly as practicable, and all such
                 orders shall be in full force and effect.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(m)&nbsp;&nbsp;That all proceedings taken by either of
                 Debt Strategies or Debt Strategies III and its counsel in
                 connection with the Merger and all documents incidental
                 thereto shall be satisfactory in form and substance to Debt
                 Strategies II.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(n)&nbsp;&nbsp;That prior to the Effective Date, each of
                 Debt Strategies and Debt Strategies III, respectively, shall
                 have declared a dividend or dividends which, together with all
                 such previous dividends, shall have the effect of distributing
                 to its stockholders all of its net investment company taxable
                 income for the period to and including the Effective Date, if
                 any (computed without regard to any deduction or dividends
                 paid), and all of its net capital gain, if any, realized for
                 the period to and including the Effective Date.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(o)&nbsp;&nbsp;That any applicable waiting period under
                 the HSR Act relating to the transactions contemplated hereby
                 shall have expired or been terminated.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(p)&nbsp;&nbsp;That as of the Effective Date, Debt
                 Strategies II will have entered into an agreement with one or
                 more financial institutions or other lenders, in form and
                 substance acceptable to Debt Strategies II in its sole
                 discretion, providing for a revolving credit facility for Debt
                 Strategies II in a principal amount approximately equal to the
                 aggregate commitment amount of the Outstanding Credit
                 Facilities.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">10.
               <I>Debt Strategies Conditions.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               obligations of Debt Strategies hereunder shall be subject to the
               following conditions:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;That this Agreement shall have been
                 adopted, and the Merger shall have been approved, by the
                 affirmative vote of the holders of more than fifty percent of
                 the Common Stock of Debt Strategies issued and outstanding and
                 entitled to vote thereon; and that each of Debt Strategies II
                 and Debt Strategies III, respectively, shall have delivered to
                 Debt Strategies a copy of the resolution approving this
                 Agreement adopted by such Fund&#146;s respective Board of
                 Directors and stockholders, certified by its
                 Secretary.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;
                 &nbsp;That each of Debt Strategies II and Debt Strategies III,
                 respectively, shall have furnished to Debt Strategies a
                 statement of assets, liabilities and capital, together with a
                 schedule of its investments, certified on its behalf by its
                 respective President (or any Vice President) and its
                 respective Treasurer, and a certificate of both such officers,
                 dated as of the Effective Date, certifying that as of the
                 Effective Date there has been no material adverse change in
                 its respective financial position since the date of such
                 Fund&#146;s most recent Annual or Semi-Annual Report to
                 Stockholders, other than changes in its portfolio securities
                 since that date or changes in the market value of its
                 portfolio securities.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(c)&nbsp;&nbsp;That each of Debt Strategies II and Debt
                 Strategies III, respectively, shall have furnished to Debt
                 Strategies a certificate signed by its respective President
                 (or any Vice President) and its respective Treasurer, dated as
                 of the Effective Date, certifying that all representations and
                 warranties of Debt Strategies II and Debt Strategies III,
                 respectively, as applicable, made in this Agreement are true
                 and correct in all material respects with the same effect as
                 if made at and as of the Effective Date, and that such Fund
                 has complied with all of the agreements and satisfied all of
                 the conditions on its part to be performed or satisfied at or
                 prior to such date.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(d)&nbsp;&nbsp;That there shall not be any material
                 litigation pending with respect to the matters contemplated by
                 this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(e)&nbsp;&nbsp;That Debt Strategies shall have received
                 the opinion or opinions of Brown &amp; Wood </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">, as
                 counsel to Debt Strategies, Debt Strategies II and Debt
                 Strategies III, in form and substance satisfactory to Debt
                 Strategies and dated the Effective Date, with respect to the
                 matters specified in Sections 9(f) and (g) of this Agreement
                 and such other matters as Debt Strategies reasonably may deem
                 necessary or desirable.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(f)&nbsp;&nbsp;That all proceedings taken by Debt
                 Strategies II or Debt Strategies III and its counsel in
                 connection with the Merger and all documents incidental
                 thereto shall be satisfactory in form and substance to Debt
                 Strategies.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(g)&nbsp;&nbsp;That the N-14 Registration Statement
                 shall have become effective under the 1933 Act, and no stop
                 order suspending such effectiveness shall have been instituted
                 or, to the knowledge of Debt Strategies II or Debt Strategies
                 III, contemplated by the Commission.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(h)&nbsp;&nbsp;That Debt Strategies shall have received
                 from Deloitte &amp; Touche </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> a
                 letter dated within three days prior to the effective date of
                 the N-14 Registration Statement and a similar letter dated
                 within five days prior to the Effective Date, in form and
                 substance satisfactory to Debt Strategies, to the effect that
                 (i) they are independent public accountants with respect to
                 each of Debt Strategies II and Debt Strategies III within the
                 meaning of the 1933 Act and the applicable published rules and
                 regulations thereunder; (ii) in their opinion, the financial
                 statements and supplementary information of each of Debt
                 Strategies II and Debt Strategies III included or incorporated
                 by reference in the N-14 Registration Statement and reported
                 on by them comply as to form in all material respects with the
                 applicable accounting requirements of the 1933 Act and the
                 published rules and regulations thereunder; (iii) on the basis
                 of limited procedures agreed upon by Debt Strategies, Debt
                 Strategies II and Debt Strategies III described in such letter
                 (but not an examination in accordance with generally accepted
                 auditing standards) consisting of a reading of any unaudited
                 interim financial statements and unaudited supplementary
                 information of each of Debt Strategies II and Debt Strategies
                 III included in the N-14 Registration Statement, and inquiries
                 of certain officials of Debt Strategies II and Debt Strategies
                 III responsible for financial and accounting matters, nothing
                 came to their attention that caused them to believe that (a)
                 such unaudited financial statements and related unaudited
                 supplementary information do not comply as to form in all
                 material respects with the applicable accounting requirements
                 of the 1933 Act and the published rules and regulations
                 thereunder, (b) such unaudited financial statements are not
                 fairly presented in conformity with generally accepted
                 accounting principles, applied on a basis substantially
                 consistent with that of the audited financial statements, or
                 (c) such unaudited supplementary information is not fairly
                 stated in all material respects in relation to the unaudited
                 financial statements taken as a whole; (iv) and on the basis
                 of limited procedures agreed upon by Debt Strategies, Debt
                 Strategies II and Debt Strategies III and described in such
                 letter (but not an examination in accordance with generally
                 accepted auditing standards), the information relating to each
                 of Debt Strategies II and Debt
               Strategies III appearing in the N-14 Registration Statement,
                 which information is expressed in dollars (or percentages
                 derived from such dollars) concerning each of Debt Strategies
                 II and Debt Strategies III (with the exception of performance
                 comparisons, if any), if any, has been obtained from the
                 accounting records of each of Debt Strategies II and Debt
                 Strategies III or from schedules prepared by officials of each
                 of Debt Strategies II and Debt Strategies III having
                 responsibility for financial and reporting matters and such
                 information is in agreement with such records, schedules or
                 computations made therefrom.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(i)&nbsp;&nbsp;That the Commission shall not have issued
                 an unfavorable advisory report under Section 25(b) of the 1940
                 Act, nor instituted or threatened to institute any proceeding
                 seeking to enjoin consummation of the Merger under Section
                 25(c) of the 1940 Act, no other legal, administrative or other
                 proceeding shall be instituted or threatened which would
                 materially affect the financial condition of either of Debt
                 Strategies II or Debt Strategies III or would prohibit the
                 Merger.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(j)&nbsp;&nbsp;That Debt Strategies shall have received
                 from the Commission such orders or interpretations as Brown
                 &amp; Wood </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">, as
                 counsel to Debt Strategies, deems reasonably necessary or
                 desirable under the 1933 Act and the 1940 Act in connection
                 with the Merger, <I>provided</I>, that such counsel shall have
                 requested such orders as promptly as practicable, and all such
                 orders shall be in full force and effect.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(k)&nbsp;&nbsp;That any applicable waiting period under
                 the HSR Act relating to the transactions contemplated hereby
                 shall have expired or been terminated.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(l)&nbsp;&nbsp;That as of the Effective Date, Debt
                 Strategies II will have entered into an agreement with a
                 financial institution, in form and substance acceptable to
                 Debt Strategies II in its sole discretion, providing for a
                 revolving credit facility for Debt Strategies II in a
                 principal amount approximately equal to the aggregate
                 commitment amount of the Outstanding Credit
                 Facilities.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">11.
               <I>Debt Strategies III Conditions.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
               obligations of Debt Strategies III hereunder shall be subject to
               the following conditions:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;That this Agreement shall have been
                 adopted, and the Merger shall have been approved, by the
                 affirmative vote of the holders of more than fifty percent of
                 the Common Stock of Debt Strategies III issued and outstanding
                 and entitled to vote thereon; and that each of Debt Strategies
                 II and Debt Strategies, respectively, shall have delivered to
                 Debt Strategies III a copy of the resolution approving this
                 Agreement adopted by such Fund&#146;s Board of Directors and
                 stockholders, certified by its Secretary.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(b)&nbsp;&nbsp;That each of Debt Strategies II and Debt
                 Strategies, respectively, shall have furnished to Debt
                 Strategies III a statement of assets, liabilities and capital,
                 together with a schedule of its investments, certified on its
                 behalf by its respective President (or any Vice President) and
                 its respective Treasurer, and a certificate of both such
                 officers, dated as of the Effective Date, certifying that as
                 of the Effective Date there has been no material adverse
                 change in the financial position of Debt Strategies II since
                 the date of such Fund&#146;s most recent Annual or Semi-Annual
                 Report to Stockholders, other than changes in its portfolio
                 securities since that date or changes in the market value of
                 its portfolio securities.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(c)&nbsp;&nbsp;That each of Debt Strategies II and Debt
                 Strategies, respectively, shall have furnished to Debt
                 Strategies III a certificate signed by its respective
                 President (or any Vice President) and its respective
                 Treasurer, dated as of the Effective Date, certifying that all
                 representations and warranties of each of Debt Strategies II
                 and Debt Strategies, respectively, made in this Agreement are
                 true and correct in all material respects with the same effect
                 as if made at and as of the Effective Date, and that such Fund
                 has complied with all of the agreements and satisfied all of
                 the conditions on its part to be performed or satisfied at or
                 prior to such date.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(d)&nbsp;&nbsp;That there shall not be any material
                 litigation pending with respect to the matters contemplated by
                 this Agreement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(e)&nbsp;&nbsp;That Debt Strategies III shall have
                 received the opinion or opinions of Brown &amp; Wood
                 </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">, as
                 counsel to Debt Strategies, Debt Strategies II and Debt
                 Strategies III, in form and substance satisfactory to
               Debt Strategies III and dated the Effective Date, with respect
                 to matters specified in Sections 9(f) and 9(g) of this
                 Agreement and such other matters as Debt Strategies III
                 reasonably may deem necessary or desirable.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(f)&nbsp;&nbsp;That all proceedings taken by both Debt
                 Strategies II or Debt Strategies and its counsel in connection
                 with the Merger and all documents incidental thereto shall be
                 satisfactory in form and substance to Debt Strategies
                 III.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(g)&nbsp;&nbsp;That the N-14 Registration Statement
                 shall have become effective under the 1933 Act, and no stop
                 order suspending such effectiveness shall have been instituted
                 or, to the knowledge of either Debt Strategies II or Debt
                 Strategies, contemplated by the Commission.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(h)&nbsp;&nbsp;That Debt Strategies III shall have
                 received from Deloitte &amp; Touche </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> a
                 letter dated within three days prior to the effective date of
                 the N-14 Registration Statement and a similar letter dated
                 within five days prior to the Effective Date, in form and
                 substance satisfactory to Debt Strategies III, to the effect
                 that (i) they are independent public accountants with respect
                 to each of Debt Strategies II and Debt Strategies within the
                 meaning of the 1933 Act and the applicable published rules and
                 regulations thereunder; (ii) in their opinion, the financial
                 statements and supplementary information of each of Debt
                 Strategies II and Debt Strategies included or incorporated by
                 reference in the N-14 Registration Statement and reported on
                 by them comply as to form in all material respects with the
                 applicable accounting requirements of the 1933 Act and the
                 published rules and regulations thereunder; (iii) on the basis
                 of limited procedures agreed upon by Debt Strategies, Debt
                 Strategies II and Debt Strategies III and described in such
                 letter (but not an examination in accordance with generally
                 accepted auditing standards) consisting of a reading of any
                 unaudited interim financial statements and unaudited
                 supplementary information of each of Debt Strategies II and
                 Debt Strategies included in the N-14 Registration Statement,
                 and inquiries of certain officials of each of Debt Strategies
                 II and Debt Strategies responsible for financial and
                 accounting matters, nothing came to their attention that
                 caused them to believe that (a) such unaudited financial
                 statements and related unaudited supplementary information do
                 not comply as to form in all material respects with the
                 applicable accounting requirements of the 1933 Act and the
                 published rules and regulations thereunder, (b) such unaudited
                 financial statements are not fairly presented in conformity
                 with generally accepted accounting principles, applied on a
                 basis substantially consistent with that of the audited
                 financial statements, or (c) such unaudited supplementary
                 information is not fairly stated in all material respects in
                 relation to the unaudited financial statements taken as a
                 whole; (iv) and on the basis of limited procedures agreed upon
                 by Debt Strategies, Debt Strategies II and Debt Strategies III
                 and described in such letter (but not an examination in
                 accordance with generally accepted auditing standards), the
                 information relating to each of Debt Strategies II and Debt
                 Strategies appearing in the N-14 Registration Statement, which
                 information is expressed in dollars (or percentages derived
                 from such dollars) concerning each of Debt Strategies II and
                 Debt Strategies (with the exception of performance
                 comparisons, if any), if any, has been obtained from the
                 accounting records of each of Debt Strategies II and Debt
                 Strategies or from schedules prepared by officials of each of
                 Debt Strategies II and Debt Strategies having responsibility
                 for financial and reporting matters and such information is in
                 agreement with such records, schedules or computations made
                 therefrom.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(i)&nbsp;&nbsp;That the Commission shall not have issued
                 an unfavorable advisory report under Section 25(b) of the 1940
                 Act, nor instituted or threatened to institute any proceeding
                 seeking to enjoin consummation of the Merger under Section
                 25(c) of the 1940 Act, no other legal, administrative or other
                 proceeding shall be instituted or threatened which would
                 materially affect the financial condition of either of Debt
                 Strategies II or Debt Strategies or would prohibit the
                 Merger.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(j)&nbsp;&nbsp;That Debt Strategies III shall have
                 received from the Commission such orders or interpretations as
                 Brown &amp; Wood </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">LLP</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">, as
                 counsel to Debt Strategies III, deems reasonably necessary or
                 desirable under the 1933 Act and the 1940 Act in connection
                 with the Merger, <I>provided</I>, that such counsel shall have
                 requested such orders as promptly as practicable, and all such
                 orders shall be in full force and effect.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(k)&nbsp;&nbsp;That any applicable waiting period under
                 the HSR Act relating to the transactions contemplated hereby
                 shall have expired or been terminated.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;
                 &nbsp;That as of the Effective Date, Debt Strategies II will
                 have entered into an agreement with a financial institution,
                 in form and substance acceptable to Debt Strategies II in its
                 sole discretion, providing for a revolving credit facility for
                 Debt Strategies II in a principal amount approximately equal
                 to the aggregate commitment amount of the Outstanding Credit
                 Facilities.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">12.
               <I>Termination, Postponement and Waivers.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
               &nbsp;&nbsp;Notwithstanding anything contained in this Agreement
               to the contrary: (1) this Agreement may be terminated and the
               Merger abandoned at any time (whether before or after adoption
               thereof by the stockholders of each of Debt Strategies, Debt
               Strategies II and Debt Strategies III) prior to the Effective
               Date, or the Effective Date may be postponed, (i) by mutual
               consent of the Boards of Directors of Debt Strategies, Debt
               Strategies II and Debt Strategies III; (ii) by the Board of
               Directors of Debt Strategies II if any condition of Debt
               Strategies II&#146;s obligations set forth in Section 9 of this
               Agreement has not been fulfilled or waived by such Board; (iii)
               by the Board of Directors of Debt Strategies if any condition of
               Debt Strategies&#146; obligations set forth in Section 10 of
               this Agreement has not been fulfilled or waived by such Board;
               or (iv) by the Board of Directors of Debt Strategies III if any
               condition of Debt Strategies III&#146;s obligations set forth in
               Section 11 of this Agreement has not been fulfilled or waived by
               such Board or (2) the Merger may be postponed or abandoned by
               any one of the Board of Directors of Debt Strategies, Debt
               Strategies II or Debt Strategies III if such Board of Directors
               determines that it is in the best interest of the stockholders
               of its fund to do so.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
               &nbsp;&nbsp;If the transactions contemplated by this Agreement
               have not been consummated by March 31, 2001, this Agreement
               automatically shall terminate on that date, unless a later date
               is mutually agreed to by the Boards of Directors of Debt
               Strategies, Debt Strategies II and Debt Strategies
               III.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
               &nbsp;&nbsp;In the event of termination of this Agreement
               pursuant to the provisions hereof, the same shall become void
               and have no further effect, and there shall not be any liability
               on the part of either Debt Strategies, Debt Strategies II or
               Debt Strategies III or persons who are their directors,
               trustees, officers, agents or stockholders in respect of this
               Agreement.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
               &nbsp;&nbsp;At any time prior to the Effective Date, any of the
               terms or conditions of this Agreement may be waived by the Board
               of Directors of either Debt Strategies, Debt Strategies II or
               Debt Strategies III, respectively (whichever is entitled to the
               benefit thereof), if, in the judgment of such Board after
               consultation with its counsel, such action or waiver will not
               have a material adverse effect on the benefits intended under
               this Agreement to the stockholders of their respective fund, on
               behalf of which such action is taken. In addition, the Boards of
               Directors of Debt Strategies, Debt Strategies II and Debt
               Strategies III have delegated to FAM the ability to make
               non-material changes to the transaction if it deems it to be in
               the best interests of Debt Strategies, Debt Strategies II and
               Debt Strategies III to do so.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
               &nbsp;&nbsp;The respective representations and warranties
               contained in Sections 1, 2 and 3 of this Agreement shall expire
               with, and be terminated by, the consummation of the Merger, and
               neither Debt Strategies, Debt Strategies II nor Debt Strategies
               III nor any of their officers, directors or trustees, agents or
               stockholders shall have any liability with respect to such
               representations or warranties after the Effective Date. This
               provision shall not protect any officer, director or trustee,
               agent or stockholder of Debt Strategies, Debt Strategies II or
               Debt Strategies III against any liability to the entity for
               which that officer, director or trustee, agent or stockholder so
               acts or to its stockholders to which that officer, director or
               trustee, agent or stockholder otherwise would be subject by
               reason of willful misfeasance, bad faith, gross negligence, or
               reckless disregard of the duties in the conduct of such
               office.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)
               &nbsp;&nbsp;If any order or orders of the Commission with
               respect to this Agreement shall be issued prior to the Effective
               Date and shall impose any terms or conditions which are
               determined by action of the Boards of Directors of Debt
               Strategies, Debt Strategies II and Debt Strategies III to be
               acceptable, such terms and conditions shall be binding as if a
               part of this Agreement without further vote or approval of the
               stockholders of Debt Strategies, Debt Strategies II and Debt
               Strategies III, unless such terms and conditions shall result in
               a
             change in the method of computing the number of shares of Debt
               Strategies II Common Stock to be issued pursuant to this
               Agreement in which event, unless such terms and conditions shall
               have been included in the proxy solicitation materials furnished
               to the stockholders of Debt Strategies, Debt Strategies II and
               Debt Strategies III prior to the meetings at which the Merger
               shall have been approved, this Agreement shall not be
               consummated and shall terminate unless Debt Strategies, Debt
               Strategies II and Debt Strategies III promptly shall call
               special meetings of stockholders at which such conditions so
               imposed shall be submitted for approval.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">13.
               <I>Other Matters.</I></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)
               &nbsp;&nbsp;Pursuant to Rule 145 under the 1933 Act, and in
               connection with the issuance of any shares to any person who at
               the time of the Merger is, to its knowledge, an affiliate of a
               party to the Merger pursuant to Rule 145(c), Debt Strategies II
               will cause to be affixed upon the certificate(s) issued to such
               person (if any) a legend as follows:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="8%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="92%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">THESE
                 SHARES ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE
                 SECURITIES ACT OF 1933 AND MAY NOT BE SOLD OR OTHERWISE
                 TRANSFERRED EXCEPT TO DEBT STRATEGIES FUND II, INC. (OR ITS
                 STATUTORY SUCCESSOR) OR ITS PRINCIPAL UNDERWRITER UNLESS (I) A
                 REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER
                 THE SECURITIES ACT OF 1933 OR (II) IN THE OPINION OF COUNSEL
                 REASONABLY SATISFACTORY TO THE FUND, SUCH REGISTRATION IS NOT
                 REQUIRED.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">and,
               further, that stop transfer instructions will be issued to Debt
               Strategies II&#146;s transfer agent with respect to such shares.
               Each of Debt Strategies and Debt Strategies III, respectively,
               will provide Debt Strategies II on the Effective Date with the
               name of any Debt Strategies and Debt Strategies III stockholder
               who is to the respective knowledge of Debt Strategies or Debt
               Strategies III an affiliate of it on such date.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
               &nbsp;&nbsp;All covenants, agreements, representations and
               warranties made under this Agreement and any certificates
               delivered pursuant to this Agreement shall be deemed to have
               been material and relied upon by each of the parties,
               notwithstanding any investigation made by them or on their
               behalf.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)
               &nbsp;&nbsp;Any notice, report or demand required or permitted
               by any provision of this Agreement shall be in writing and shall
               be deemed to have been given if delivered or mailed, first class
               postage prepaid, addressed to Debt Strategies, Debt Strategies
               II or Debt Strategies III, in any case at 800 Scudders Mill
               Road, Plainsboro, New Jersey 08536, Attn: Terry K. Glenn,
               President.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)
               &nbsp;&nbsp;This Agreement supersedes all previous
               correspondence and oral communications between the parties
               regarding the Merger, constitutes the only understanding with
               respect to the Merger, may not be changed except by a letter of
               agreement signed by each party and shall be governed by and
               construed in accordance with the laws of the State of New York
               applicable to agreements made and to be performed in said
               state.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)
               &nbsp;&nbsp;Copies of the Articles of Incorporation, and all
               amendments, if any, of Debt Strategies, Debt Strategies II and
               Debt Strategies III are on file with SDAT, and notice is hereby
               given that this instrument is executed on behalf of the
               Directors of each of Debt Strategies, Debt Strategies II and
               Debt Strategies III.</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Agreement
               may be executed in any number of counterparts, each of which,
               when executed and delivered, shall be deemed to be an original
               but all such counterparts together shall constitute but one
               instrument.</FONT></DIV>
             <DIV><FONT
             SIZE="6">&nbsp;</FONT></DIV>
             <DIV ALIGN="left">


             </DIV>

             <TABLE WIDTH="100%" ALIGN="center" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" WIDTH="45%" ALIGN="left">

               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Attest:</FONT></DIV>

               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>


               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">/<SMALL>S</SMALL>
               /&nbsp;&nbsp;&nbsp;&nbsp;B<SMALL>RADLEY </SMALL>
               J. L<SMALL>UCIDO</SMALL>
               </FONT></DIV>



               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><U><HR
                 SIZE=1 NOSHADE></U></FONT></DIV>



               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Bradley
                 J. Lucido, Secretary</FONT></DIV>

               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>


               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Attest:</FONT></DIV>

               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>


               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">/<SMALL>S</SMALL>
               /&nbsp;&nbsp;&nbsp;&nbsp;B<SMALL>RADLEY </SMALL>
               J. L<SMALL>UCIDO</SMALL>
               </FONT></DIV>



               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><U><HR
                 SIZE=1 NOSHADE></U></FONT></DIV>



               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Bradley
                 J. Lucido, Secretary</FONT></DIV>

               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>


               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Attest:</FONT></DIV>

               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>


               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">/<SMALL>S</SMALL>
               /&nbsp;&nbsp;&nbsp;&nbsp;B<SMALL>RADLEY </SMALL>
               J. L<SMALL>UCIDO</SMALL>
               </FONT></DIV>



               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><U><HR
                 SIZE=1 NOSHADE></U></FONT></DIV>



               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Bradley
                 J. Lucido, Secretary</FONT></DIV>

               <DIV><FONT
               SIZE="2">&nbsp;</FONT></DIV>
               </TD>
               <TD WIDTH="4%"></TD>
               <TD VALIGN="top" ALIGN="center"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">D<SMALL>EBT </SMALL>
               S<SMALL>TRATEGIES </SMALL>
               F<SMALL>UND</SMALL>
               , I<SMALL>NC</SMALL>
               .</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>


               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">/<SMALL>S</SMALL>
               /&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>ERRY </SMALL>
               K. G<SMALL>LENN</SMALL>
               </FONT></DIV>

               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">By:<U><HR SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Terry
                 K. Glenn, President</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">D<SMALL>EBT </SMALL>
               S<SMALL>TRATEGIES </SMALL>
               F<SMALL>UND </SMALL>
               II, I<SMALL>NC</SMALL>
               .</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>


               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">/<SMALL>S</SMALL>
               /&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>ERRY </SMALL>
               K. G<SMALL>LENN</SMALL>
               </FONT></DIV>

               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">By:<U><HR SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Terry
                 K. Glenn, President</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">D<SMALL>EBT </SMALL>
               S<SMALL>TRATEGIES </SMALL>
               F<SMALL>UND </SMALL>
               III, I<SMALL>NC</SMALL>
               .</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>


               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">/<SMALL>S</SMALL>
               /&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>ERRY </SMALL>
               K. G<SMALL>LENN</SMALL>
               </FONT></DIV>

               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">By:&nbsp;<U><HR SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Terry
                 K. Glenn, President</FONT></DIV>
               </TD>
               <TD WIDTH="1%"></TD>
              </TR>
             </TABLE>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="right"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx77"></A>
             EXHIBIT III</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>ARTICLES OF MERGER</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt
               Strategies Fund, Inc. (&#147;Debt Strategies&#148;) and Debt
               Strategies Fund III, Inc. (&#147;Debt Strategies III&#148;),
               each a Maryland corporation (herein collectively referred to as
               the &#147;Merging Companies&#148;), and Debt Strategies Fund II,
               Inc., a Maryland corporation (herein sometimes referred to as
               &#147;Debt Strategies II&#148; or &#147;Successor&#148;), hereby
               certify to the Department of Assessments and Taxation of the
               State of Maryland (&#147;SDAT&#148;) that:</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;FIRST:&nbsp;&nbsp;&nbsp;&nbsp;The Merging Companies and
               the Successor have agreed that each of the Merging Companies
               shall be merged into the Successor.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;SECOND:&nbsp;&nbsp;&nbsp;&nbsp;Successor shall survive the
               merger described in these Articles of Merger (the
               &#147;Merger&#148;) under the laws of the State of Maryland and
               shall change its name immediately after the Effective Time of
               the Merger (as described in Article TWELFTH hereof)
               to:</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Debt
               Strategies Fund, Inc.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;THIRD:&nbsp;&nbsp;&nbsp;&nbsp;The names of the
               corporations that are a party to the Merger are Debt Strategies
               Fund, Inc., Debt Strategies Fund II, Inc. and Debt Strategies
               Fund III, Inc. and each corporation is organized and existing
               under the laws of the State of Maryland.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;FOURTH:&nbsp;&nbsp;&nbsp;&nbsp;The principal office of
               each of the Merging Companies in the State of Maryland is
               located in Baltimore City and the principal office of the
               Successor in the State of Maryland is located in Baltimore
               City.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;FIFTH:&nbsp;&nbsp;&nbsp;&nbsp;Neither of the Merging
               Companies nor the Successor owns any interest in land in the
               State of Maryland.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;SIXTH:&nbsp;&nbsp;&nbsp;&nbsp;The Charter and Bylaws of
               the Successor in effect on the date of this Merger shall
               continue in full force and effect as the Charter and Bylaws of
               the corporation surviving the Merger.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;SEVENTH:&nbsp;&nbsp;&nbsp;&nbsp;Debt Strategies has an
               authorized capitalization of Two Hundred Million (200,000,000)
               shares, all of which is Common Stock, par value Ten Cents
               ($0.10) per share. The aggregate par value of all shares of
               Common Stock having a par value is Twenty Million Dollars
               ($20,000,000). Debt Strategies II has an authorized
               capitalization of Two Hundred Million (200,000,000) shares, all
               of which is Common Stock, par value Ten Cents ($0.10) per share.
               The aggregate par value of all shares of Common Stock having a
               par value is Twenty Million Dollars ($20,000,000). Debt
               Strategies III has an authorized capitalization of Two Hundred
               Million (200,000,000) shares, all of which is Common Stock, par
               value Ten Cents ($0.10) per share. The aggregate par value of
               all shares of Common Stock having a par value is Twenty Million
               Dollars ($20,000,000). These Articles of Merger make no change
               in the capitalization of the Successor or any other amendment to
               its Charter (other than the change in the Successor&#146;s
               name).</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;EIGHTH:&nbsp;&nbsp;&nbsp;&nbsp;The manner and basis of
               converting the outstanding shares of Common Stock of each of the
               Merging Companies into shares of Common Stock of the Successor
               and the treatment of outstanding shares of the Merging Companies
               not to be exchanged shall be as follows:</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;At the Effective Time of the Merger,
                 without the necessity of any action on the part of the holder
                 thereof, each share of Common Stock of each of the Merging
                 Companies will be converted into the right to receive an
                 equivalent dollar amount (to the nearest one ten-thousandth of
                 one cent) of full shares of Debt Strategies II Common Stock,
                 plus cash in lieu of fractional shares, computed based on the
                 net asset value per share of each of the Merging Companies and
                 the Successor at the Effective Time. The net asset value per
                 share of Debt Strategies, Debt Strategies II and Debt
                 Strategies III shall be determined as of the Effective Time,
                 and no formula will be used to adjust the net asset value so
                 determined of either Debt Strategies, Debt Strategies II or
                 Debt Strategies III to take into account differences in
                 realized and unrealized
               gains and losses. The value of the assets of Debt Strategies and
                 Debt Strategies III to be transferred to Debt Strategies II
                 pursuant to the Merger shall be determined by Debt Strategies
                 II pursuant to the procedures utilized by Debt Strategies II
                 in valuing its own assets and determining its own liabilities
                 for purposes of the Merger. Such valuation and determination
                 shall be made by Debt Strategies II in cooperation with Debt
                 Strategies and Debt Strategies III and shall be confirmed in
                 writing by Debt Strategies II to Debt Strategies and Debt
                 Strategies III. The net asset value per share of Debt
                 Strategies II Common Stock shall be determined in accordance
                 with such procedures, and Debt Strategies II shall certify the
                 computations involved. Debt Strategies II shall issue to the
                 stockholders of Debt Strategies and Debt Strategies III
                 separate certificates or share deposit receipts for the Debt
                 Strategies II Common Stock by delivering the certificates or
                 share deposit receipts evidencing ownership of the Debt
                 Strategies II Common Stock to The Bank of New York, as the
                 transfer agent and registrar for Debt Strategies II Common
                 Stock.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)
                 With respect to any Debt Strategies or Debt Strategies III
                 stockholder holding certificates evidencing ownership of
                 either the Common Stock of Debt Strategies or Debt Strategies
                 III as of the Effective Time, and subject to Debt Strategies
                 II being informed thereof in writing by Debt Strategies or
                 Debt Strategies III, Debt Strategies II will not permit such
                 stockholder to receive new certificates evidencing ownership
                 of the Debt Strategies II Common Stock, exchange Debt
                 Strategies II Common Stock credited to such stockholder&#146;s
                 account for shares of other investment companies managed by
                 Merrill Lynch Asset Management, L.P. or any of its affiliates,
                 or pledge or redeem such Debt Strategies II Common Stock, in
                 any case, until such stockholder has surrendered his or her
                 outstanding certificates evidencing ownership of the Common
                 Stock of Debt Strategies or Debt Strategies III or, in the
                 event of lost certificates, posted adequate bond. Each of Debt
                 Strategies and Debt Strategies III, at its own expense, will
                 request its stockholders to surrender their outstanding
                 certificates evidencing ownership of the Common Stock of Debt
                 Strategies and Debt Strategies III or post adequate bond
                 therefor. Until so surrendered, each such outstanding
                 certificate evidencing ownership of the Common Stock of Debt
                 Strategies or Debt Strategies II, shall be deemed for all
                 corporate purposes, to evidence the ownership of the number of
                 shares of Common Stock of the Successor into which such shares
                 of Common Stock of the Merging Companies shall have been so
                 converted. Dividends and other distributions payable to
                 holders of record of shares of Debt Strategies II Common Stock
                 as of any date after the Effective Time and prior to the
                 exchange of certificates by any stockholder of Debt Strategies
                 and Debt Strategies III shall accrue and be paid to such
                 stockholder, without interest; however, such dividends shall
                 not be paid unless and until such stockholder surrenders his
                 or her stock certificates of Debt Strategies and Debt
                 Strategies III for exchange.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) No
                 fractional shares of Debt Strategies II Common Stock will be
                 issued to Debt Strategies or Debt Strategies III stockholders.
                 In lieu thereof, Debt Strategies II&#146;s transfer agent, The
                 Bank of New York, will aggregate all fractional shares of Debt
                 Strategies II otherwise issued pursuant to the Merger and sell
                 the resulting full shares on the New York Stock Exchange at
                 the current market price for shares of Debt Strategies II for
                 the account of all such holders of fractional interests, and
                 each such holder will receive such holder&#146;s <I>pro
                 rata</I> share of the proceeds of such sale, without interest,
                 upon surrender of such holder&#146;s Debt Strategies or Debt
                 Strategies III Common Stock certificates, as the case may
                 be.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) At
                 the Effective Time, the shares of Debt Strategies II
                 outstanding as of the Effective Time will remain issued and
                 outstanding and in the same number, and the shares of Debt
                 Strategies II authorized, unissued and reserved for issuance
                 pursuant to Debt Strategies II&#146;s Automatic Dividend
                 Reinvestment Plan will remain authorized and reserved in the
                 same number.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;NINTH:&nbsp;&nbsp;&nbsp;&nbsp;Upon the Effective Time of
               the Merger, the separate existence of the Merging Companies
               shall cease and the Successor shall own and possess any and all
               purposes and powers of the Merging Companies; and all leases,
               licenses, property, rights, privileges, franchises and powers of
               whatever nature and description of the Merging Companies without
               further act or deed. Notwithstanding the foregoing, confirmatory
               deeds or other like instruments, when deemed desirable to
               evidence such transfer, vesting or devolution of any property,
               rights, privileges or franchises, may, at any time or from time
               to time, be made and delivered in the name of each of the
               Merging Companies by the last acting officers thereof, or by the
               corresponding officers of the Successor.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon the
               Effective Time of the Merger, the Successor shall be liable for
               all the debts and obligations of each of the Merging Companies
               and any claim existing or action or proceeding pending by or
               against it may be prosecuted to judgment or decree as if the
               Merger had not taken place. The rights of creditors of the
               Merging Companies shall in no way be impaired by the
               Merger.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;TENTH:&nbsp;&nbsp;&nbsp;&nbsp;The terms and conditions of
               the transactions described in these Articles were duly advised,
               authorized and approved by each of the Merging Companies in the
               manner and by the vote required by the laws of the State of
               Maryland and the Charter of each of the Merging Companies, as
               follows:</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;The board of directors of each of the
                 Merging Companies, by the affirmative vote of at least
                 two-thirds of the total number of directors at respective
                 meetings duly called and held on April 25, 2000, adopted a
                 resolution declaring that the terms and conditions of the
                 transactions described herein were advisable and directing
                 that the proposed transactions be submitted for consideration
                 by the respective stockholders of each of the Merging
                 Companies.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(b)&nbsp;&nbsp;The respective stockholders of the
                 Merging Companies entitled to vote on the merger, at
                 respective meetings duly called and held on August 23, 2000,
                 adopted a resolution approving the Merger, in all respects by
                 the votes required and in the manner prescribed by the Charter
                 of each Merging Company and Maryland General Corporate
                 Law.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;ELEVENTH:&nbsp;&nbsp;&nbsp;&nbsp;The terms and conditions
               of the transactions described in these Articles were duly
               advised, authorized and approved by the Successor, in the manner
               and by the vote required by the laws of the State of Maryland
               and the charter of the Successor, as follows:</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(a)&nbsp;&nbsp;The board of directors of the Successor,
                 by the affirmative vote of at least two-thirds of the total
                 number of directors at a meeting duly called and held on April
                 25, 2000, adopted a resolution declaring that the terms and
                 conditions of the transactions described herein were advisable
                 and directing that the proposed transactions be submitted for
                 consideration by the stockholders of the
                 Successor.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;(b)&nbsp;&nbsp;The stockholders of the Successor
                 entitled to vote on the merger, at a meeting duly called an
                 held on August 23, 2000, adopted a resolution approving the
                 Merger, in all respects by the votes required and in the
                 manner prescribed by the Charter of the Successor and Maryland
                 General Corporate Law.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;TWELFTH:&nbsp;&nbsp;&nbsp;&nbsp;These Articles of Merger
               shall become effective on
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;, 2000 at
               9:00 a.m. (the &#147;Effective Time&#148;).</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;THIRTEENTH:&nbsp;&nbsp;&nbsp;&nbsp;The corporations party
               to these Articles of Merger have caused these Articles to be
               signed in their respective corporate names and on their
               respective behalves by their respective President and witnessed
               by their respective Secretary, and each undersigned officer
               acknowledges these Articles of Merger to be the corporate act of
               his or respective corporation and that, as to all matters and
               facts required to be verified under oath, each undersigned
               officer acknowledges that, to the best of his knowledge,
               information and belief, these matters and facts are true in all
               material respects and that this verification is made under the
               penalties of perjury.</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN WITNESS
               WHEREOF, these Articles of Merger have been duly executed by the
               parties hereto this
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp; day of
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;&nbsp;&nbsp;, 2000.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" ALIGN="center" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" WIDTH="50%" ALIGN="left"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Attest:</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><U><HR
                 SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Name:
                 Bradley J. Lucido</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Title:
                 Secretary</FONT></DIV>
               </TD>
               <TD WIDTH="4%"></TD>
               <TD VALIGN="top" ALIGN="center"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">DEBT
                 STRATEGIES FUND, INC.</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">By:&nbsp;<U><HR SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Name:
                 Terry K. Glenn</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Title:
                 President</FONT></DIV>
               </TD>
               <TD WIDTH="1%"></TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" ALIGN="center" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" WIDTH="50%" ALIGN="left"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Attest:</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><U><HR
                 SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Name:
                 Bradley J. Lucido</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Title:
                 Secretary</FONT></DIV>
               </TD>
               <TD WIDTH="4%"></TD>
               <TD VALIGN="top" ALIGN="center"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">DEBT
                 STRATEGIES FUND II, INC.</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">By:&nbsp;<U><HR SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Name:
                 Terry K. Glenn</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Title:
                 President</FONT></DIV>
               </TD>
               <TD WIDTH="1%"></TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" ALIGN="center" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" WIDTH="50%" ALIGN="left"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Attest:</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><U><HR
                 SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Name:
                 Bradley J. Lucido</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Title:
                 Secretary</FONT></DIV>
               </TD>
               <TD WIDTH="4%"></TD>
               <TD VALIGN="top" ALIGN="center"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">DEBT
                 STRATEGIES FUND III, INC.</FONT></DIV>
               <DIV><FONT
               SIZE="6">&nbsp;</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">By:&nbsp;<U><HR SIZE=1 NOSHADE></U></FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Name:
                 Terry K. Glenn</FONT></DIV>
               <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Title:
                 President</FONT></DIV>
               </TD>
               <TD WIDTH="1%"></TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="right"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>
             <A NAME="tx78"></A>
             EXHIBIT IV</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>DESCRIPTION OF CORPORATE BOND RATINGS</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>Description of Moody&#146;s Investors Service,
               Inc.&#146;s (&#147;Moody&#146;s&#148;) Long-Term Debt
               Ratings</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aaa
               &nbsp;&#150;&nbsp;Bonds which are rated Aaa are judged to be of
               the best quality. They carry the smallest degree of investment
               risk and are generally referred to as &#147;gilt edged.&#148;
               Interest payments are protected by a large or by an
               exceptionally stable margin and principal is secure. While the
               various protective elements are likely to change, such changes
               as can be visualized are most unlikely to impair the
               fundamentally strong position of such issues.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Aa
               &nbsp;&#150;&nbsp;Bonds which are rated Aa are judged to be of
               high quality by all standards. Together with the Aaa group they
               comprise what are generally known as high-grade bonds. They are
               rated lower than the best bonds because margins of protection
               may not be as large as in Aaa securities or fluctuation of
               protective elements may be of greater amplitude or there may be
               other elements present which make the long-term risk appear
               somewhat larger than the Aaa securities.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
               &nbsp;&#150;&nbsp;Bonds which are rated A possess many favorable
               investment attributes and are to be considered as
               upper-medium-grade obligations. Factors giving security to
               principal and interest are considered adequate, but elements may
               be present which suggest a susceptibility to impairment some
               time in the future.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Baa
               &nbsp;&#150;&nbsp;Bonds which are rated Baa are considered as
               medium-grade obligations (i.e., they are neither highly
               protected nor poorly secured). Interest payments and principal
               security appear adequate for the present but certain protective
               elements may be lacking or may be characteristically unreliable
               over any great length of time. Such bonds lack outstanding
               investment characteristics and in fact have speculative
               characteristics as well.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ba
               &nbsp;&#150;&nbsp;Bonds which are rated Ba are judged to have
               speculative elements; their future cannot be considered as
               well-assured. Often the protection of interest and principal
               payments may be very moderate, and thereby not well safeguarded
               during both good and bad times over the future. Uncertainty of
               position characterizes bonds in this class.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B
               &nbsp;&#150;&nbsp;Bonds which are rated B generally lack
               characteristics of the desirable investment. Assurance of
               interest and principal payments or of maintenance of other terms
               of the contract over any long period of time may be
               small.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Caa
               &nbsp;&#150;&nbsp;Bonds which are rated Caa are of poor
               standing. Such issues may be in default or there may be present
               elements of danger with respect to principal or
               interest.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Ca
               &nbsp;&#150;&nbsp;Bonds which are rated Ca represent obligations
               which are speculative in a high degree. Such issues are often in
               default or have other marked shortcomings.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C
               &nbsp;&#150;&nbsp;Bonds which are rated C are the lowest rated
               class of bonds, and issues so rated can be regarded as having
               extremely poor prospects of ever attaining any real investment
               standing.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Note:</I> Moody&#146;s applies numerical modifiers 1, 2,
               and 3 in each generic rating classification from Aa through Caa.
               The modifier 1 indicates that the obligation ranks in the higher
               end of its generic rating category; the modifier 2 indicates a
               mid-range ranking; and the modifier 3 indicates a ranking in the
               lower end of that generic rating category.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>Description of Moody&#146;s Short-Term
               Ratings</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Moody&#146;s short-term debt ratings are opinions of the
               ability of issuers to repay punctually senior debt obligations.
               These obligations have an original maturity not exceeding one
               year, unless explicitly noted.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Moody&#146;s
               employs the following three designations, all judged to be
               investment grade, to indicate the relative repayment ability of
               rated issuers:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;Prime-1&nbsp;&#150;&nbsp;Issuers rated Prime-1 (or
                 supporting institutions) have a superior ability for repayment
                 of senior short-term debt obligations. Prime-1 repayment
                 ability will often be evidenced by many of the following
                 characteristics:</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="8%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="92%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 Leading market positions in well-established
                 industries.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="8%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="92%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> High
                 rates of return on funds employed.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="8%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="92%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 Conservative capitalization structure with moderate reliance
                 on debt and ample asset protection.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="8%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="92%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> Broad
                 margins in earnings coverage of fixed financial charges and
                 high internal cash generation.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="8%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="92%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
                 Well-established access to a range of financial markets and
                 assured sources of alternate liquidity.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;Prime-2&nbsp;&#150;&nbsp;Issuers rated Prime-2 (or
                 supporting institutions) have a strong ability for repayment
                 of senior short-term debt obligations. This will normally be
                 evidenced by many of the characteristics cited above but to a
                 lesser degree. Earnings trends and coverage ratios, while
                 sound, may be more subject to variation. Capitalization
                 characteristics, while still appropriate, may be more affected
                 by external conditions. Ample alternate liquidity is
                 maintained.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;Prime-3&nbsp;&#150;&nbsp;Issuers rated Prime-3 (or
                 supporting institutions) have an acceptable ability for
                 repayment of senior short-term obligations. The effect of
                 industry characteristics and market compositions may be more
                 pronounced. Variability in earnings and profitability may
                 result in changes in the level of debt protection measurements
                 and may require relatively high financial leverage. Adequate
                 alternate liquidity is maintained.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not
                 Prime&nbsp;&#150;&nbsp;Issuers rated Not Prime do not fall
                 within any of the Prime rating categories.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Obligations of a branch of a bank are considered to be
               domiciled in the country in which the branch is located. Unless
               noted as an exception, Moody&#146;s rating on a bank&#146;s
               ability to repay senior obligations extends only to branches
               located in countries which carry a Moody&#146;s Sovereign Rating
               for Bank Deposits. Such branch obligations are rated at the
               lower of the bank&#146;s rating or Moody&#146;s Sovereign Rating
               for Bank Deposits for the country in which the branch is
               located.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When the
               currency in which an obligation is denominated is not the same
               as the currency of the country in which the obligation is
               domiciled, Moody&#146;s ratings do not incorporate an opinion as
               to whether payment of the obligation will be affected by actions
               of the government controlling the currency of denomination. In
               addition, risks associated with bilateral conflicts between an
               investor&#146;s home country and either the issuer&#146;s home
               country or the country where an issuer&#146;s branch is located
               are not incorporated into Moody&#146;s short-term debt
               ratings.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Moody&#146;s makes no representation that rated bank or
               insurance company obligations are exempt from the registration
               under the U.S. Securities Act of 1933 or issued in conformity
               with any other applicable law or regulation. Nor does
               Moody&#146;s represent that any specific bank or insurance
               company obligation is legally enforceable or a valid senior
               obligation of a rated issuer.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If an
               issuer represents to Moody&#146;s that its short-term debt
               obligations are supported by the credit of another entity or
               entities, then the name or names of such supporting entity or
               entities are listed within the parenthesis beneath the name of
               the issuer, or there is a footnote referring the reader to
               another page for the name or names of the supporting entity or
               entities. In assigning ratings to such issuers, Moody&#146;s
               evaluates the financial strength of the affiliated corporations,
               commercial banks, insurance companies, foreign governments or
               other entities, but only as one factor in the total rating
               assessment. Moody&#146;s makes no representation and gives no
               opinion on the legal validity or enforceability of any support
               arrangement.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Moody&#146;s ratings are opinions, not recommendations to
               buy or sell, and their accuracy is not guaranteed. A rating
               should be weighed solely as one factor in an investment decision
               and you should make your own study and evaluation of any issuer
               whose securities or debt obligations you consider buying or
               selling.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               <B>Description of Moody&#146;s Preferred Stock
               Ratings</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because
               of the fundamental differences between preferred stocks and
               bonds, a variation of our familiar bond rating symbols is used
               in the quality ranking of preferred stock. The symbols,
               presented below, are designed to avoid comparison with bond
               quality in absolute terms. It should always be borne in mind
               that preferred stock occupies a junior position to bonds within
               a particular capital structure and that these securities are
               rated within the universe of preferred stocks.</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE ALIGN="center" WIDTH="587" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;aaa&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An
                 issue which is rated &#147;aaa&#148; is considered to be a
                 top-quality preferred stock. This rating
               <BR>
               indicates good asset protection and the least risk of dividend
                 impairment within the universe of
               <BR>
               preferred stocks.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;aa&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An
                 issue which is rated &#147;aa&#148; is considered a high-grade
                 preferred stock. This rating indicates
               <BR>
               that there is a reasonable assurance the earnings and asset
                 protection will remain relatively well
               <BR>
               maintained in the foreseeable future.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;a&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An
                 issue which is rated &#147;a&#148; is considered to be an
                 upper-medium grade preferred stock. While
               <BR>
               risks are judged to be somewhat greater then in the
                 &#147;aaa&#148; and &#147;aa&#148; classification, earnings and
               <BR>
               asset protection are, nevertheless, expected to be maintained at
                 adequate levels.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;baa&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An
                 issue which is rated &#147;baa&#148; is considered to be a
                 medium-grade preferred stock, neither
               <BR>
               highly protected nor poorly secured. Earnings and asset
                 protection appear adequate at present but
               <BR>
               may be questionable over any great length of time.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;ba&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An
                 issue which is rated &#147;ba&#148; is considered to have
                 speculative elements and its future cannot be
               <BR>
               considered well assured. Earnings and asset protection may be
                 very moderate and not well
               <BR>
               safeguarded during adverse periods. Uncertainty of position
                 characterizes preferred stocks in this
               <BR>
               class.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;b&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An
                 issue which is rated &#147;b&#148; generally lacks the
                 characteristics of a desirable investment.
               <BR>
               Assurance of dividend payments and maintenance of other terms of
                 the issue over any long
               <BR>
               period of time may be small.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;caa&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An
                 issue which is rated &#147;caa&#148; is likely to be in
                 arrears on dividend payments. This rating
               <BR>
               designation does not purport to indicate the future status of
                 payments.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;ca&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">An
                 issue which is rated &#147;ca&#148; is speculative in a high
                 degree and is likely to be in arrears on
               <BR>
               dividends with little likelihood of eventual
                 payments.</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=3 VALIGN="bottom" ALIGN="left"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#147;c&#148;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="538" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">This is
                 the lowest rated class of preferred or preference stock.
                 Issues so rated can thus be
               <BR>
               regarded as having extremely poor prospects of ever attaining
                 any real investment standing.</FONT></TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><I>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
               &nbsp;Note:</I>&nbsp;&nbsp;&nbsp;&nbsp;Moody&#146;s applies
               numerical modifiers 1, 2, and 3 in each rating classification:
               the modifier 1 indicates that the security ranks in the higher
               end of its generic rating category; the modifier 2 indicates a
               mid-range ranking and the modifier 3 indicates that the issue
               ranks in the lower end of its generic rating
               category.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>Description of Standard &amp; Poor&#146;s
               (&#147;S&amp;P&#146;s&#148;) Corporate Debt
               Ratings</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
               Standard &amp; Poor&#146;s issue credit rating is a current
               opinion of the creditworthiness of an obligor with respect to a
               specific financial obligation, a specific class of financial
               obligations, or a specific financial program. It takes into
               consideration the creditworthiness of guarantors, insurers, or
               other forms of credit enhancement on the obligation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issue
               credit rating is not a recommendation to purchase, sell, or hold
               a financial obligation, inasmuch as it does not comment as to
               market price or suitability for a particular
               investor.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issue
               credit ratings are based on current information furnished by the
               obligors or obtained by Standard &amp; Poor&#146;s from other
               sources it considers reliable. Standard &amp; Poor&#146;s does
               not perform an audit in connection with any credit rating and
               may, on occasion, rely on unaudited financial information.
               Credit ratings may be changed,
             suspended, or withdrawn as a result of changes in, or
               unavailability of, such information, or based on other
               circumstances.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issue
               credit ratings can be either long term or short term. Short-term
               ratings are generally assigned to those obligations considered
               short term in the relevant market. In the U.S., for example,
               that means obligations with an original maturity of no more than
               365 days&#151;including commercial paper. Short-term ratings are
               also used to indicate the creditworthiness of an obligor with
               respect to put features on long-term obligations. The result is
               a dual rating, in which the short-term ratings address the put
               feature, in addition to the usual long-term rating. Medium-term
               notes are assigned long-term ratings.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>Description of Standard &amp; Poor&#146;s
               (&#147;S&amp;P&#146;s&#148;) Corporate Debt
               Ratings</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issue
               credit ratings are based in varying degrees, on the following
               considerations:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.
                 &nbsp;&nbsp;Likelihood of payment&nbsp;&#150;&nbsp;capacity
                 and willingness of the obligor to meet its financial
                 commitment on an obligation in accordance with the terms of
                 the obligation;</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.
                 &nbsp;&nbsp;Nature of and provisions of the obligation;
                 and</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="96%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.
                 &nbsp;&nbsp;Protection afforded by, and relative position of,
                 the obligation in the event of bankruptcy, reorganization, or
                 other arrangement under the laws of bankruptcy and other laws
                 affecting creditors&#146; rights.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The issue
               ratings definitions are expressed in terms of default risk. As
               such, they pertain to senior obligations of an entity. Junior
               obligations are typically rated lower than senior obligations,
               to reflect the lower priority in bankruptcy, as noted
               above.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AAA
               &nbsp;&#150;&nbsp;An obligation rated &#145;AAA&#146; has the
               highest rating assigned by Standard &amp; Poor&#146;s. The
               obligor&#146;s capacity to meet its financial commitment on the
               obligation is extremely strong.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AA
               &nbsp;&#150;&nbsp;An obligation rated &#145;AA&#146; differs
               from the highest-rated obligations only in small degree. The
               obligor&#146;s capacity to meet its financial commitment on the
               obligation is very strong.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
               &nbsp;&#150;&nbsp;An obligation rated &#145;A&#146; is somewhat
               more susceptible to the adverse effects of changes in
               circumstances and economic conditions than obligations in
               higher-rated categories. However, the obligor&#146;s capacity to
               meet its financial commitment on the obligation is still
               strong.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BBB
               &nbsp;&#150;&nbsp;An obligation rated &#145;BBB&#146; exhibits
               adequate protection parameters. However, adverse economic
               conditions or changing circumstances are more likely to lead to
               a weakened capacity of the obligor to meet its financial
               commitment on the obligation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BB, B,
               CCC, CC, And C&nbsp;&#150;&nbsp;Obligations rated
               &#145;BB&#146;, &#145;B&#146;, &#145;CCC&#146;, &#145;CC&#146;,
               and &#145;C&#146; are regarded as having significant speculative
               characteristics. &#145;BB&#146; indicates the least degree of
               speculation and &#145;C&#146; the highest. While such
               obligations will likely have some quality and protective
               characteristics, these may be outweighed by large uncertainties
               or major exposures to adverse conditions.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;BB
               &nbsp;&#150;&nbsp;An obligation rated &#145;BB&#146; is less
               vulnerable to nonpayment than other speculative issues. However,
               it faces major ongoing uncertainties or exposure to adverse
               business, financial, or economic conditions, which could lead to
               the obligor&#146;s inadequate capacity to meet its financial
               commitment on the obligation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B
               &nbsp;&#150;&nbsp;An obligation rated &#145;B&#146; is more
               vulnerable to nonpayment than obligations rated &#146;BB&#146;,
               but the obligor currently has the capacity to meet its financial
               commitment on the obligation. Adverse business, financial, or
               economic conditions will likely impair the obligor&#146;s
               capacity or willingness to meet its financial commitment on the
               obligation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CCC
               &nbsp;&#150;&nbsp;An obligation rated &#145;CCC&#146; is
               currently vulnerable to nonpayment and is dependent upon
               favorable business, financial, and economic conditions for the
               obligor to meet its financial commitment on the obligation.
             In the event of adverse business, financial, or economic
               conditions, the obligor is not likely to have the capacity to
               meet its financial commitment on the obligation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;CC
               &nbsp;&#150;&nbsp;An obligation rated &#145;CC&#146; is
               currently highly vulnerable to nonpayment.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C
               &nbsp;&#150;&nbsp;The &#145;C&#146; rating may be used to cover
               a situation where a bankruptcy petition has been filed or
               similar action has been taken, but payments on this obligation
               are being continued.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D
               &nbsp;&#150;&nbsp;An obligation rated &#145;D&#146; is in
               payment default. The &#145;D&#146; rating category is used when
               payments on an obligation are not made on the date due even if
               the applicable grace period has not expired, unless Standard
               &amp; Poor&#146;s believes that such payments will be made
               during such grace period. The &#145;D&#146; rating also will be
               used upon the filing of a bankruptcy petition or the taking of a
               similar action if payments on an obligation are
               jeopardized.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Plus (+)
               or minus (-)&nbsp;&nbsp;&nbsp;&nbsp;The ratings from
               &#145;AA&#146; to &#145;CCC&#146; may be modified by the
               addition of a plus or minus sign to show relative standing
               within the major rating categories.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c
               &nbsp;&#150;&nbsp;The &#145;c&#146; subscript is used to provide
               additional information to investors that the bank may terminate
               its obligation to purchase tendered bonds if the long-term
               credit rating of the issuer is below an investment-grade level
               and/or the issuer&#146;s bonds are deemed taxable.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;p
               &nbsp;&#150;&nbsp;The letter &#145;p&#146; indicates that the
               rating is provisional. A provisional rating assumes the
               successful completion of the project financed by the debt being
               rated and indicates that payment of debt service requirements is
               largely or entirely dependent upon the successful, timely
               completion of the project. This rating, however, while
               addressing credit quality subsequent to completion of the
               project, makes no comment on the likelihood of or the risk of
               default upon failure of such completion. The investor should
               exercise his own judgment with respect to such likelihood and
               risk.</FONT></DIV>
             <DIV ALIGN="left">


             </DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*
               &nbsp;&#150;&nbsp;Continuance of the ratings is contingent upon
               Standard &amp; Poor&#146;s receipt of an executed copy of the
               escrow agreement or closing documentation confirming investments
               and cash flows.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;r
               &nbsp;&#150;&nbsp;The &#145;r&#146; highlights derivative,
               hybrid, and certain other obligations that Standard &amp;
               Poor&#146;s believes may experience high volatility or high
               variability in expected returns as a result of noncredit risks.
               Examples of such obligations are securities with principal or
               interest return indexed to equities, commodities, or currencies;
               certain swaps and options; and interest-only and principal-only
               mortgage securities. The absence of an &#145;r&#146; symbol
               should not be taken as an indication that an obligation will
               exhibit no volatility or variability in total
               return.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;N.R.
               &nbsp;&#150;&nbsp;Not rated.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Debt
               obligations of issuers outside the United States and its
               territories are rated on the same basis as domestic corporate
               and municipal issues. The ratings measure the creditworthiness
               of the obligor but do not take into account currency exchange
               and related uncertainties.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Bond
               Investment Quality Standards</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
               present commercial bank regulations issued by the Comptroller of
               the Currency, bonds rated in the top four categories
               (&#145;AAA&#146;, &#145;AA&#146;, &#145;A&#146;,
               &#145;BBB&#146;, commonly known as investment-grade ratings)
               generally are regarded as eligible for bank investment. Also,
               the laws of various states governing legal investments impose
               certain rating or other standards for obligations eligible for
               investment by savings banks, trust companies, insurance
               companies, and fiduciaries in general.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>Description of S&amp;P&#146;s Short-Term Issue Credit
               Ratings</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A-1
               &nbsp;&#150;&nbsp;A short-term obligation rated &#145;A-1&#146;
               is rated in the highest category by Standard &amp; Poor&#146;s.
               The obligor&#146;s capacity to meet its financial commitment on
               the obligation is strong. Within this category, certain
               obligations are designated with a plus sign (+). This indicates
               that the obligor&#146;s capacity to meet its financial
               commitment on these obligations is extremely strong.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">
               &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A-2
               &nbsp;&#150;&nbsp;A short-term obligation rated &#145;A-2&#146;
               is somewhat more susceptible to the adverse effects of changes
               in circumstances and economic conditions than obligations in
               higher rating categories. However, the obligor&#146;s capacity
               to meet its financial commitment on the obligation is
               satisfactory.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A-3
               &nbsp;&#150;&nbsp;A short-term obligation rated &#145;A-3&#146;
               exhibits adequate protection parameters. However, adverse
               economic conditions or changing circumstances are more likely to
               lead to a weakened capacity of the obligor to meet its financial
               commitment on the obligation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;B
               &nbsp;&#150;&nbsp;A short-term obligation rated &#145;B&#146; is
               regarded as having significant speculative characteristics. The
               obligor currently has the capacity to meet its financial
               commitment on the obligation; however, it faces major ongoing
               uncertainties which could lead to the obligor&#146;s inadequate
               capacity to meet its financial commitment on the
               obligation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;C
               &nbsp;&#150;&nbsp;A short-term obligation rated &#145;C&#146; is
               currently vulnerable to nonpayment and is dependent upon
               favorable business, financial, and economic conditions for the
               obligor to meet its financial commitment on the
               obligation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;D
               &nbsp;&#150;&nbsp;A short-term obligation rated &#145;D&#146; is
               in payment default. The &#145;D&#146; rating category is used
               when payments on an obligation are not made on the date due even
               if the applicable grace period has not expired, unless Standard
               &amp; Poor&#146;s believes that such payments will be made
               during such grace period. The &#145;D&#146; rating also will be
               used upon the filing of a bankruptcy petition or the taking of a
               similar action if payments on an obligation are
               jeopardized</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>Notes</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
               Standard &amp; Poor&#146;s note ratings reflects the liquidity
               factors and market access risks unique to notes. Notes due in
               three years or less will likely receive a note rating. Notes
               maturing beyond three years will most likely receive a long-term
               debt rating. The following criteria will be used in making that
               assessment:</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Amortization schedule&#151;the larger the final
                 maturity relative to other maturities, the more likely it will
                 be treated as a note; and</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>

             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"></TD>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT><FONT
               SIZE="2" COLOR="#000000" FACE="Symbol">&#183;</FONT><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times"></FONT></DIV>
               </TD>
               <TD WIDTH="92%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Source
                 of payment&#151;the more dependent the issue is on the market
                 for its refinancing, the more likely it will be treated as a
                 note.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Note
               rating symbols are as follows:</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SP-1
               &nbsp;&#150;&nbsp;Strong capacity to pay principal and interest.
               An issue determined to possess a very strong capacity to pay
               debt service is given a plus (+) designation.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SP-2
               &nbsp;&#150;&nbsp;Satisfactory capacity to pay principal and
               interest, with some vulnerability to adverse financial and
               economic changes over the term of the notes.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SP-3
               &nbsp;&#150;&nbsp; Speculative capacity to pay principal and
               interest.</FONT></DIV>
             <DIV><FONT
             SIZE="3">&nbsp;</FONT></DIV>
             <DIV><FONT
             SIZE="7">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="3" COLOR="#000000" FACE="'Times New Roman', Times"> [This
               page is intentionally left blank.]</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"> <B>PART
               C</B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>OTHER
               INFORMATION</B></FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Item
               15.&nbsp;&nbsp;&nbsp;
               &nbsp;<I>Indemnification.</I></B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
               2-418 of the General Corporation Law of the State of Maryland,
               Article VI of the Registrant&#146;s Articles of Incorporation,
               which was previously filed as an exhibit to the Common Stock
               Registration Statement (as defined below), Article VI of the
               Registrant&#146;s By-Laws, which was previously filed as an
               exhibit to the Common Stock Registration Statement, and the
               Investment Advisory Agreement, a form of which was previously
               filed as an exhibit to the Common Stock Registration Statement,
               provide for indemnification.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar
               as indemnification for liabilities arising under the Securities
               Act of 1933, as amended (the &#147;1933 Act&#148;), may be
               provided to directors, officers and controlling persons of the
               Registrant, pursuant to the foregoing provisions or otherwise,
               the Registrant has been advised that in the opinion of the
               Securities and Exchange Commission, such indemnification is
               against public policy as expressed in the 1933 Act and is,
               therefore, unenforceable. In the event that a claim for
               indemnification against such liabilities (other than the payment
               by the Registrant of expenses incurred or paid by a director,
               officer or controlling person of the Registrant in connection
               with any successful defense of any action, suit or proceeding)
               is asserted by such director, officer or controlling person in
               connection with the securities being registered, the Registrant
               will, unless in the opinion of its counsel the matter has been
               settled by controlling precedent, submit to a court of
               appropriate jurisdiction the question whether such
               indemnification by it is against public policy as expressed in
               the 1933 Act and will be governed by the final adjudication of
               such issue.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference
               is made to Section 6 of the Purchase Agreement relating to the
               Registrant&#146;s Common Stock, a form of which was previously
               filed as an exhibit to the Common Stock Registration Statement,
               for provisions relating to the indemnification of the
               underwriter.</FONT></DIV>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Item
               16.&nbsp;&nbsp;&nbsp;&nbsp;<I>Exhibits.</I></B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;1</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Articles of Incorporation of the
                 Registrant.(a)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;2</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;By-Laws of the Registrant.(a)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;3</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Not Applicable.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;4</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Form of Agreement and Plan of Merger among the
                 Registrant, Debt Strategies Fund, Inc. and Debt
               <BR>
               Strategies Fund III, Inc. (included as Exhibit II to the Joint
                 Proxy Statement and Prospectus contained in
               <BR>
               this Registration Statement).</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;5</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Form of specimen certificate for the Common Stock
                 of the Registrant.(a)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Copies of instruments defining the rights of
                 stockholders, including the relevant portions of the Articles
               <BR>
               of Incorporation and the By-Laws of the
                 Registrant.(b)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;6</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Form of Investment Advisory Agreement between
                 Registrant and Fund Asset Management, L.P. (the
               <BR>
               &#147;Investment Adviser&#148;).(c)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;7</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Form of Purchase Agreement between the Registrant
                 and the Investment Adviser and Merrill Lynch,
               <BR>
               Pierce, Fenner &amp; Smith Incorporated (&#147;Merrill
                 Lynch&#148;) relating to the Registrant&#146;s Common
                 Stock.(c)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Form of Merrill Lynch Standard Dealer
                 Agreement.(c)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;8</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Not applicable.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;9</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Custodian Contract between the Registrant and The
                 Bank of New York.(c)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">10</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Not applicable.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">11</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Opinion and Consent of Brown &amp; Wood
                 <SMALL>LLP</SMALL>
               , counsel for the Registrant.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">12</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Tax Opinion of Brown &amp; Wood <SMALL>LLP</SMALL>
               .(d)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">13</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Registrar, Transfer Agency and Service Agreement
                 between the Registrant and The Bank of New
               <BR>
               York.(c)</FONT></TD>
              </TR>
             </TABLE>


             <BR>


             <BR>

             <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">14(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Consent of Deloitte &amp; Touche
                 <SMALL>LLP</SMALL>
               , independent auditors for the Registrant.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Consent of Deloitte &amp; Touche
                 <SMALL>LLP</SMALL>
               , independent auditors for Debt Strategies Fund, Inc.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="right"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Consent of Deloitte &amp; Touche
                 <SMALL>LLP</SMALL>
               , independent auditors for Debt Strategies Fund III,
                 Inc.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">15</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Not applicable.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">16</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="588" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Power of Attorney.(e)</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV ALIGN="left"><HR WIDTH="10%" SIZE="1" NOSHADE></DIV>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(a)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Incorporated herein by reference to the
                 Registrant&#146;s registration statement (the
                 &#147;Registration Statement&#148;), on Form N-2 relating to
                 the Registrant&#146;s Common Stock (File No. 333-44051), filed
                 with the Securities and Exchange Commission (the
                 &#147;Commission&#148;) on January 12, 1998.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(b)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Reference is made to Article V, Article VI (sections 2,
                 3, 4, 5 and 6), Article VII, Article VIII, Article X, Article
                 XI, Article XII and Article XIII of the Registrant&#146;s
                 Articles of Incorporation, previously filed as Exhibit (a) to
                 this Registration Statement; and to Article II, Article III
                 (sections 1, 2, 3, 5 and 17), Article VI, Article VII, Article
                 XII, Article XIII and Article XIV of the Registrant&#146;s
                 By-Laws, previously filed as Exhibit (b) to this Registration
                 Statement.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(c)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Incorporated herein by reference to Pre-Effective
                 Amendment No. 1 to the Registration Statement, filed with the
                 Commission on February 18, 1998.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>


             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(d)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">To be
                 filed by Post-Effective Amendment to this Registration
                 Statement on Form N-14.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>



             <TABLE BORDER="0" WIDTH="100%" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="4%" ALIGN="left" VALIGN="top"><DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(e)</FONT></DIV>
               </TD>
               <TD WIDTH="96%" ALIGN="left" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Included on the signature page of the N-14 Registration
                 Statement filed on May 18, 2000 and incorporated herein by
                 reference.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times"><B>Item
               17.&nbsp;&nbsp;&nbsp;&nbsp;<I>Undertakings.</I></B></FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)
               &nbsp;&nbsp;The undersigned Registrant agrees that prior to any
               public reoffering of the securities registered through use of a
               prospectus which is part of this Registration Statement by any
               person or party who is deemed to be an underwriter within the
               meaning of Rule 145(c) of the Securities Act of 1933, as
               amended, the reoffering prospectus will contain information
               called for by the applicable registration form for reofferings
               by persons who may be deemed underwriters, in addition to the
               information called for by other items of the applicable
               form.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)
               &nbsp;&nbsp;The undersigned Registrant agrees that every
               prospectus that is filed under paragraph (1) above will be filed
               as part of an amendment to the registration statement and will
               not be used until the amendment is effective, and that, in
               determining any liability under the Securities Act of 1933, as
               amended, each post-effective amendment shall be deemed to be a
               new registration statement for the securities offered therein,
               and the offering of securities at that time shall be deemed to
               be the initial bona fide offering of them.</FONT></DIV>
             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>
             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)
               &nbsp;&nbsp;The Registrant undertakes to file, by post-effective
               amendment, an opinion of counsel as to certain tax matters
               within a reasonable time after receipt of such ruling or
               opinion.</FONT></DIV>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="left">


             </DIV>


             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times"><B>SIGNATURES</B></FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
               to the requirements of the Securities Act of 1933 and the
               Investment Company Act of 1940, the Registrant has duly caused
               this Pre-Effective Amendment to its Registration Statement to be
               signed on its behalf by the undersigned, thereunto duly
               authorized, in the Township of Plainsboro and State of New
               Jersey, on the 13th day of July, 2000.</FONT></DIV>

             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>


             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="47%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="53%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">DEBT
                 STRATEGIES FUND II, INC.</FONT></DIV>
               </TD>
              </TR>
             </TABLE>



             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="47%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="53%" VALIGN="top"> <DIV
                 ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(Registrant)</FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>


             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="47%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" VALIGN="top"> <DIV ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">By:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;/<SMALL>S</SMALL>
               /&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>ERRY </SMALL>
               K. G<SMALL>LENN</SMALL>

                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;</FONT></DIV>
               </TD>
              </TR>
             </TABLE>


             <TABLE BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
              <TR>
               <TD WIDTH="50%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="50%" VALIGN="top"> <HR SIZE=1 NOSHADE>
                 </TD>
              </TR>
             </TABLE>


             <TABLE WIDTH="100%" BORDER="0" CELLPADDING="0" CELLSPACING="0">
              <TR>
               <TD WIDTH="48%" ALIGN="left" VALIGN="top"></TD>
               <TD ALIGN="left" WIDTH="52%" VALIGN="top"> <DIV
                 ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Terry K. Glenn, President)</B></FONT></DIV>
               </TD>
              </TR>
             </TABLE>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <DIV ALIGN="left"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman',
               Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
               to the requirements of the Securities Act of 1933, this
               Pre-Effective Amendment to the Registration Statement has been
               signed by the following persons in the capacities and on the
               dates indicated.</FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Signatures</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Title</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Date</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"></TD>
               <TD COLSPAN=5><FONT
               SIZE="2">&nbsp;</FONT></TD>
               <TR>
               <TD VALIGN="top" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">T<SMALL>ERRY </SMALL>
               K. G<SMALL>LENN</SMALL>
               *
               <BR>

                 <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
               <BR>
               </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Terry K. Glenn)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">President (Principal Executive
               <BR>
               Officer) and Director</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"></TD>
               <TD COLSPAN=5><FONT
               SIZE="5">&nbsp;</FONT></TD>
               <TR>
               <TD VALIGN="top" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">D<SMALL>ONALD </SMALL>
               C. B<SMALL>URKE</SMALL>
               *
               <BR>

                 <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
               <BR>
               </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Donald C. Burke)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">Vice
                 President and Treasurer
               <BR>
               (Principal Financial and
               <BR>
               Accounting Officer)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="5">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="614" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TD VALIGN="top" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">R<SMALL>ONALD </SMALL>
               W. F<SMALL>ORBES</SMALL>
               *
               <BR>

                 <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
               <BR>
               </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Ronald W. Forbes)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Director</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"></TD>
               <TD COLSPAN=5><FONT
               SIZE="5">&nbsp;</FONT></TD>
               <TR>
               <TD VALIGN="top" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">C<SMALL>YNTHIA </SMALL>
               A. M<SMALL>ONTGOMERY</SMALL>
               *
               <BR>

                 <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
               <BR>
               </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Cynthia A. Montgomery)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Director</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"></TD>
               <TD COLSPAN=5><FONT
               SIZE="5">&nbsp;</FONT></TD>
               <TR>
               <TD VALIGN="top" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">C<SMALL>HARLES </SMALL>
               C. R<SMALL>EILLY</SMALL>
               *
               <BR>

                 <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
               <BR>
               </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Charles C. Reilly)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Director</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"></TD>
               <TD COLSPAN=5><FONT
               SIZE="5">&nbsp;</FONT></TD>
               <TR>
               <TD VALIGN="top" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">K<SMALL>EVIN </SMALL>
               A. R<SMALL>YAN</SMALL>
               *
               <BR>

                 <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
               <BR>
               </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Kevin A. Ryan)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Director</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"></TD>
               <TD COLSPAN=5><FONT
               SIZE="5">&nbsp;</FONT></TD>
               <TR>
               <TD VALIGN="top" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">R<SMALL>ICHARD </SMALL>
               R. W<SMALL>EST</SMALL>
               *
               <BR>

                 <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
               <BR>
               </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Richard R. West)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Director</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"></TD>
               <TD COLSPAN=5><FONT
               SIZE="5">&nbsp;</FONT></TD>
               <TR>
               <TD VALIGN="top" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">A<SMALL>RTHUR </SMALL>
               Z<SMALL>EIKEL</SMALL>
               *
               <BR>

                 <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
               <BR>
               </FONT><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Arthur Zeikel)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">Director</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
              </TR>
              <TR>
               <TD COLSPAN=5 VALIGN="bottom" ALIGN="left"></TD>
               <TD COLSPAN=5><FONT
               SIZE="5">&nbsp;</FONT></TD>
               <TR>
               <TD VALIGN="bottom" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">/<SMALL>S</SMALL>
               /&nbsp;&nbsp;&nbsp;&nbsp;T<SMALL>ERRY </SMALL>
               K. G<SMALL>LENN</SMALL>
               </FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">July
                 13, 2000</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">*By:&nbsp;<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                 &nbsp;</U></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="center"></TD>
              </TR>
              <TR>
               <TD VALIGN="bottom" WIDTH="259" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>(Terry K. Glenn, Attorney-in-Fact)</B></FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="center"></TD>
              </TR>
             </TABLE>


             <BR>
             <DIV><FONT
             SIZE="1">&nbsp;</FONT></DIV>
             <DIV ALIGN="center"><FONT
             SIZE="2" COLOR="#000000" FACE="'Times New Roman', Times">

             <B>EXHIBIT INDEX</B></FONT></DIV>

             <DIV><FONT
             SIZE="2">&nbsp;</FONT></DIV>


             <BR>

             <TABLE ALIGN="center" WIDTH="615" CELLSPACING=0 CELLPADDING=0>
              <TR>
               <TH COLSPAN=2 VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman', Times"><B>Item
               <BR>
               No.</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
               <TH><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TH>
               <TH VALIGN="bottom" NOWRAP ALIGN="center"><FONT
               SIZE="1" COLOR="#000000" FACE="'Times New Roman',
                 Times"><B>Description</B></FONT><FONT
               SIZE="1"><HR ALIGN="center" WIDTH="100%" SIZE="1"
                 NOSHADE></FONT></TH>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;4</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="566" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Form of Agreement and Plan of Merger between the
                 Registrant, Debt Strategies Fund, Inc. and Debt
               <BR>
               Strategies Fund III, Inc. (included as Exhibit II to the Joint
                 Proxy Statement and Prospectus)</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">11</FONT></TD>
               <TD><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="566" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Opinion and Consent of Brown &amp; Wood
                 <SMALL>LLP</SMALL>
               , counsel to the Registrant</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">14</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(a)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="566" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Consent of Deloitte &amp; Touche
                 <SMALL>LLP</SMALL>
               , independent auditors of the Registrant</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(b)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="566" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Consent of Deloitte &amp; Touche
                 <SMALL>LLP</SMALL>
               , independent auditors of Debt Strategies Fund, Inc.</FONT></TD>
              </TR>
              <TR>
               <TD VALIGN="top" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">(c)</FONT></TD>
               <TD><FONT
               SIZE="1">&nbsp;&nbsp;&nbsp;&nbsp;</FONT></TD>
               <TD VALIGN="top" WIDTH="566" NOWRAP ALIGN="left"><FONT
               SIZE="2" COLOR="#000000" FACE="'Times New Roman',
                 Times">&#151;Consent of Deloitte &amp; Touche
                 <SMALL>LLP</SMALL>
               , independent auditors of Debt Strategies Fund III,
                 Inc.</FONT></TD>
              </TR>
             </TABLE>


             <BR>
 </BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>PROXY CARD
<TEXT>

<PAGE>

                          DEBT STRATEGIES FUND II, INC.
                                  P.O. BOX 9011
                        PRINCETON, NEW JERSEY 08543-9011

                                      PROXY

           This proxy is solicited on behalf of the Board of Directors

      The undersigned hereby appoints Terry K. Glenn, Donald C. Burke and
Bradley J. Lucido as proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated below,
all of the shares of common stock of Debt Strategies Fund II, Inc. (the "Fund"),
held of record by the undersigned on June 27, 2000 at the Annual Meeting of
Stockholders of the Fund to be held on August 23, 2000 or any adjournment
thereof.

      THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" PROPOSALS 1, 2 AND 3.

      By signing and dating this card, you authorize the proxies to vote each
proposal as marked, or if not marked, to vote "FOR" each proposal, and to use
their discretion to vote for any other matter as may properly come before the
meeting or any adjournment thereof. If you do not intend to personally attend
the meeting, please complete and return this card at once in the enclosed
envelope.

      Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney or as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
persons.

      To vote by Telephone

1)    Read the Proxy Statement and have the proxy card below at hand.
2)    Call 1-800-643-3168.
3)    Enter the 12-digit control number set forth on the proxy card and follow
      the simple instructions.

      To vote by Internet

1) Read the Proxy Statement and have the proxy card below at hand
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the proxy card and follow the
   simple instructions.

      TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK           KEEP THIS PORTION
INK AS FOLLOWS:                                          FOR YOUR RECORDS

      THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND         DETACH AND RETURN
DATED                                                    THIS PORTION ONLY

      Please mark boxes [_] or [X] in blue or black ink.
<PAGE>

         Vote on Proposal

1.    To approve the Agreement and Plan of Merger between the Fund, Debt
      Strategies Fund, Inc. and Debt Strategies Fund III, Inc.

               FOR  [_]         AGAINST [_]         ABSTAIN [_]

2.    ELECTION OF   FOR all nominees listed below       WITHHOLD AUTHORITY
      DIRECTORS     (except as marked to the contrary   to vote for all nominees
                    below) [_]                          listed below [_]

(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)

Ronald W. Forbes, Terry K. Glenn, Cynthia A. Montgomery, Charles C. Reilly,
Kevin A. Ryan, Roscoe S. Suddarth, Richard R. West, Arthur Zeikel and Edward D.
Zinbarg.

3.    Proposal to ratify the selection of Deloitte & Touche LLP as the
      independent auditors of the Fund to serve for the current fiscal year.

               FOR  [_]         AGAINST [_]         ABSTAIN [_]

4.    To transact such other business as may properly come before the Meeting or
      any adjournment thereof.


                                        Please sign exactly as name appears
                                        hereon. When stock is held by joint
                                        tenants, both should sign. When signing
                                        as attorney or as executor,
                                        administrator, trustee or guardian,
                                        please give full title as such. If a
                                        corporation, please sign in full
                                        corporate name by president or other
                                        authorized officer. If a partnership,
                                        please sign in partnership name by
                                        authorized person.

                                        Dated:                          , 2000
                                              --------------------------

                                        X
                                        --------------------------------------
                                              Signature

                                        X
                                        --------------------------------------
                                              Signature, if held jointly


Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.


<PAGE>

                          DEBT STRATEGIES FUND, INC.
                                  P.O. BOX 9011
                        PRINCETON, NEW JERSEY 08543-9011

                                      PROXY
           This proxy is solicited on behalf of the Board of Directors

      The undersigned hereby appoints Terry K. Glenn, Donald C. Burke and
Bradley J. Lucido as proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated below,
all of the shares of common stock of Debt Strategies Fund, Inc. (the "Fund"),
held of record by the undersigned on June 27, 2000 at the Annual Meeting of
Stockholders of the Fund to be held on August 23, 2000 or any adjournment
thereof.

      THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" PROPOSALS 1, 2 AND 3.

     By signing and dating this card, you authorize the proxies to vote each
proposal as marked, or if not marked, to vote "FOR" each proposal, and to use
their discretion to vote for any other matter as may properly come before the
meeting or any adjournment thereof. If you do not intend to personally attend
the meeting, please complete and return this card at once in the enclosed
envelope.

      Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney or as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
persons.

      To vote by Telephone

1)    Read the Proxy Statement and have the proxy card below at hand.
2)    Call 1-800-643-3168.
3)    Enter the 12-digit control number set forth on the proxy card and follow
      the simple instructions.

      To vote by Internet

1) Read the Proxy Statement and have the proxy card below at hand
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the proxy card and follow the
   simple instructions.

      TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK           KEEP THIS PORTION
INK AS FOLLOWS:                                          FOR YOUR RECORDS

      THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND         DETACH AND RETURN
DATED                                                    THIS PORTION ONLY

      Please mark boxes [_] or [X] in blue or black ink.
<PAGE>

         Vote on Proposal

1.    To approve the Agreement and Plan of Merger between the Fund, Debt
      Strategies Fund II, Inc. and Debt Strategies Fund III, Inc.

               FOR  [_]         AGAINST [_]         ABSTAIN [_]


2.   ELECTION OF   FOR all nominees listed below       WITHHOLD AUTHORITY
     DIRECTORS     (except as marked to the contrary   to vote for all nominees
                   below) [_]                          listed below [_]

(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)

Ronald W. Forbes, Terry K. Glenn, Cynthia A. Montgomery, Charles C. Reilly,
Kevin A. Ryan, Roscoe S. Suddarth, Richard R. West, Arthur Zeikel and Edward D.
Zinbarg.

3.   Proposal to ratify the selection of Deloitte & Touche LLP as the
     independent auditors of the Fund to serve for the current fiscal year.

               FOR  [_]         AGAINST [_]         ABSTAIN [_]

4.   To transact such other business as may properly come before the Meeting or
     any adjournment thereof.


                                        Please sign exactly as name appears
                                        hereon. When stock is held by joint
                                        tenants, both should sign. When signing
                                        as attorney or as executor,
                                        administrator, trustee or guardian,
                                        please give full title as such. If a
                                        corporation, please sign in full
                                        corporate name by president or other
                                        authorized officer. If a partnership,
                                        please sign in partnership name by
                                        authorized person.

                                        Dated:                          , 2000
                                              --------------------------

                                        X
                                        --------------------------------------
                                              Signature

                                        X
                                        --------------------------------------
                                              Signature, if held jointly


Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.


<PAGE>

                        DEBT STRATEGIES FUND III, INC.
                                  P.O. BOX 9011
                        PRINCETON, NEW JERSEY 08543-9011

                                      PROXY

           This proxy is solicited on behalf of the Board of Directors

      The undersigned hereby appoints Terry K. Glenn, Donald C. Burke and
Bradley J. Lucido as proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated below,
all of the shares of common stock of Debt Strategies Fund III, Inc. (the
"Fund"), held of record by the undersigned on June 27, 2000 at the Annual
Meeting of Stockholders of the Fund to be held on August 23, 2000 or any
adjournment thereof.

      THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" PROPOSALS 1, 2 AND 3.

      By signing and dating this card, you authorize the proxies to vote each
proposal as marked, or if not marked, to vote "FOR" each proposal, and to use
their discretion to vote for any other matter as may properly come before the
meeting or any adjournment thereof. If you do not intend to personally attend
the meeting, please complete and return this card at once in the enclosed
envelope.

      Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney or as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized
persons.

      To vote by Telephone

1)    Read the Proxy Statement and have the proxy card below at hand.
2)    Call 1-800-643-3168.
3)    Enter the 12-digit control number set forth on the proxy card and follow
      the simple instructions.

      To vote by Internet

1) Read the Proxy Statement and have the proxy card below at hand
2) Go to Website www.proxyvote.com
3) Enter the 12-digit control number set forth on the proxy card and follow the
   simple instructions.

      TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK           KEEP THIS PORTION
INK AS FOLLOWS:                                          FOR YOUR RECORDS

      THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND         DETACH AND RETURN
DATED                                                    THIS PORTION ONLY

      Please mark boxes [_] or [X] in blue or black ink.
<PAGE>

         Vote on Proposal

1.    To approve the Agreement and Plan of Merger between the Fund, Debt
      Strategies Fund, Inc. and Debt Strategies Fund II, Inc.

               FOR  [_]         AGAINST [_]         ABSTAIN [_]

2.    ELECTION OF   FOR all nominees listed below       WITHHOLD AUTHORITY
      DIRECTORS     (except as marked to the contrary   to vote for all nominees
                    below) [_]                          listed below [_]

(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name in the list below.)

Ronald W. Forbes, Terry K. Glenn, Cynthia A. Montgomery, Charles C. Reilly,
Kevin A. Ryan, Roscoe S. Suddarth, Richard R. West, Arthur Zeikel and Edward D.
Zinbarg.

3.    Proposal to ratify the selection of Deloitte & Touche LLP as the
      independent auditors of the Fund to serve for the current fiscal year.

               FOR  [_]         AGAINST [_]         ABSTAIN [_]

4.    To transact such other business as may properly come before the Meeting or
      any adjournment thereof.


                                        Please sign exactly as name appears
                                        hereon. When stock is held by joint
                                        tenants, both should sign. When signing
                                        as attorney or as executor,
                                        administrator, trustee or guardian,
                                        please give full title as such. If a
                                        corporation, please sign in full
                                        corporate name by president or other
                                        authorized officer. If a partnership,
                                        please sign in partnership name by
                                        authorized person.

                                        Dated:                          , 2000
                                              --------------------------

                                        X
                                        --------------------------------------
                                              Signature

                                        X
                                        --------------------------------------
                                              Signature, if held jointly


Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.11
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>OPINION AND CONSENT OF BROWN & WOOD LLP
<TEXT>

<PAGE>

                                                                      EXHIBIT 11

                                Brown & Wood LLP
                             One World Trade Center
                            New York, N.Y. 10048-0057
                             Telephone: 212-839-5300
                             Facsimile: 212-839-5599

                                                              July 13, 2000


Debt Strategies Fund II, Inc.
800 Scudders Mill Road
Plainsboro, New Jersey  08536

Ladies and Gentlemen:

         We have acted as counsel for Debt Strategies Fund II, Inc. (the "Fund")
in connection with the proposed merger of Debt Strategies Fund, Inc. ("Debt
Strategies") and Debt Strategies Fund III, Inc. ("Debt Strategies III") with and
into the Fund (the "Merger"), whereby holders of common stock of each of Debt
Strategies and Debt Strategies III will receive newly-issued shares of common
stock of the Fund. This opinion is furnished in connection with the Fund's
Registration Statement on Form N-14 under the Securities Act of 1933, as amended
(File No. 333-37384) (the "Registration Statement"), relating to shares of
common stock of the Fund, par value $0.10 per share (the "Shares"), to be issued
in the Merger.

         As counsel for the Fund, we are familiar with the proceedings taken by
it and to be taken by it in connection with the authorization and issuance of
the Shares. In addition, we have examined and are familiar with the Articles of
Incorporation of the Fund, as amended, the By-Laws of the Fund, and such other
documents as we have deemed relevant to the matters referred to in this opinion.

         Based upon the foregoing, we are of the opinion that subsequent to the
approval of the Agreement and Plan of Merger among the Fund, Debt Strategies
Fund, Inc. and Debt Strategies Fund III, Inc. and the consummation of the
transactions set forth in the joint proxy statement and prospectus constituting
a part of the Registration Statement (the "Joint Proxy Statement and
Prospectus"), the Shares, upon issuance in the manner referred to in the
Registration Statement, for consideration not less than the par value thereof,
will be legally issued, fully paid and non-assessable shares of common stock of
the Fund.

         We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Joint Proxy Statement
and Prospectus constituting a part thereof.

                                                Very truly yours,

                                                /s/ Brown & Wood LLP


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.14A
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>CONSENT OF DELOITTE AND TOUCHE
<TEXT>

<PAGE>

                                                                   Exhibit 14(a)

INDEPENDENT AUDITORS' CONSENT

Debt Strategies Fund II, Inc.:

We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-37384 on Form N-14 of Debt Strategies Fund II, Inc. of our
report dated April 17, 2000 appearing in the Joint Proxy Statement and
Prospectus, which is a part of such Registration Statement, and to the
references to us under the captions "COMPARISON OF THE FUNDS-Financial
Highlights" and "EXPERTS" also appearing in such Joint Proxy Statement and
Prospectus.


/s/ Deloitte & Touche LLP

    Deloitte & Touche LLP
    Princeton, New Jersey
    July 7, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.14B
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>CONSENT OF DELOITTE AND TOUCHE
<TEXT>

<PAGE>

                                                                   Exhibit 14(b)
INDEPENDENT AUDITORS' CONSENT

Debt Strategies Fund, Inc.:


We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-37384 on Form N-14 of Debt Strategies Fund II, Inc. of our
report on the financial statements of Debt Strategies Fund, Inc. dated April 17,
2000 appearing in the Joint Proxy Statement and Prospectus, which is a part of
such Registration Statement, and to the references to us under the captions
"COMPARISON OF THE FUNDS - Financial Highlights" and "EXPERTS" also appearing in
such Joint Proxy Statement and Prospectus.


/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Princeton, New Jersey
July 7, 2000
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.14C
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>CONSENT OF DELOITTE AND TOUCHE
<TEXT>

<PAGE>

                                                                   Exhibit 14(c)
INDEPENDENT AUDITORS' CONSENT

Debt Strategies Fund III, Inc.:


We consent to the use in this Pre-Effective Amendment No. 1 to Registration
Statement No. 333-37384 on Form N-14 of Debt Strategies Fund II, Inc. of our
report on the financial statements of Debt Strategies Fund III, Inc. dated April
17, 2000 appearing in the Joint Proxy Statement and Prospectus, which is a part
of such Registration Statement, and to the references to us under the captions
"COMPARISON OF THE FUNDS - Financial Highlights" and "EXPERTS" also appearing in
such Joint Proxy Statement and Prospectus.



/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
Princeton, New Jersey
July 7, 2000
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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