<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>hib06177e.txt
<TEXT>
061 High Income Bond Fund attachment
8/31/04

77E
Regulatory matters and litigation

On April 8, 2004, Putnam Management entered into agreements
with the Securities and Exchange Commission and the
Massachusetts Securities Division representing a final
settlement of all charges brought against Putnam Management by
those agencies on October 28, 2003 in connection with
excessive short term trading by Putnam employees and, in the
case of the charges brought by the Massachusetts Securities
Division, by participants in some Putnam administered 401(k)
plans.  The settlement with the SEC requires Putnam Management
to pay $5 million in disgorgement plus a civil monetary
penalty of $50 million, and the settlement with the
Massachusetts Securities Division requires Putnam Management
to pay $5 million in restitution and an administrative fine of
$50 million.  The settlements also leave intact the process
established under an earlier partial settlement with the SEC
under which Putnam Management agreed to pay the amount of
restitution determined by an independent consultant, which may
exceed the disgorgement and restitution amounts specified
above,  pursuant to a plan to be developed by the independent
consultant.

Putnam Management, and not the investors in any Putnam fund,
will bear all costs, including restitution, civil penalties
and associated legal fees stemming from both of these
proceedings.  The SECs and Massachusetts Securities Divisions
allegations and related matters also serve as the general
basis for numerous lawsuits, including purported class action
lawsuits filed against Putnam Management and certain related
parties, including certain Putnam funds.  Putnam Management
has agreed to bear any costs incurred by Putnam funds in
connection with these lawsuits.  Based on currently available
information, Putnam Management believes that the likelihood
that the pending private lawsuits and purported class action
lawsuits will have a material adverse financial impact on the
fund is remote, and the pending actions are not likely to
materially affect its ability to provide investment management
services to its clients, including the Putnam funds.

Review of these matters by counsel for Putnam Management and
by separate independent counsel for the Putnam funds and their
independent Trustees is continuing.


</TEXT>
</DOCUMENT>
