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<TYPE>EX-99.77E LEGAL
<SEQUENCE>5
<FILENAME>legal77e.txt
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EX-99.1 2 dex991.htm PRESS RELEASE
Exhibit 99.1
Citigroup Closed-End Funds
Issue Statement
NEW YORK  (Business Wire) June 2, 2005
The following Citigroup closed-end funds  Citigroup Investments
Corporate Loan Fund Inc., High Income Opportunity Fund Inc.,
Intermediate Muni Fund, Inc., Managed High Income Portfolio Inc.,
Managed Municipals Portfolio Inc., Municipal High Income Fund Inc.,
Real Estate Income Fund Inc. and Zenix Income Fund Inc., - today
issued the following statement:
On May 31, 2005, the U.S. Securities and Exchange Commission ("SEC")
issued an order in connection with the settlement of an administrative
proceeding against Smith Barney Fund Management LLC ("SBFM") and
Citigroup Global Markets Inc. ("CGMI") relating to the appointment of
an affiliated transfer agent for the Smith Barney family of mutual
funds (the "Affected Funds").
The SEC order finds that SBFM and CGMI willfully violated Section
206(1) of the Investment Advisers Act of 1940 ("Advisers Act").
Specifically, the order finds that SBFM and CGMI knowingly or recklessly
failed to disclose to the boards of the Affected Funds in 1999 when
proposing a new transfer agent arrangement with an affiliated transfer
agent that: First Data Investors Services Group ("First Data"), the
Affected Funds' then-existing transfer agent, had offered to continue
as transfer agent and do the same work for substantially less money
than before; and that Citigroup Asset Management ("CAM"), the Citigroup
business unit that includes the Fund's investment manager and other
investment advisory companies, had entered into a side letter with First
Data under which CAM agreed to recommend the appointment of First Data
as sub-transfer agent to the affiliated transfer agent in exchange,
among other things, for a guarantee by First Data of specified amounts
of asset management and investment banking fees to CAM and CGMI. The
order also finds that SBFM and CGMI willfully violated Section 206(2)
of the Advisers Act by virtue of the omissions discussed above and other
misrepresentations and omissions in the materials provided to the
Affected Funds' boards, including the failure to make clear that the
affiliated transfer agent would earn a high profit for performing limited
functions while First Data continued to perform almost all of the transfer
agent functions, and the suggestion that the proposed arrangement was in
the Affected Funds' best interests and that no viable alternatives existed.
SBFM and CGMI do not admit or deny any wrongdoing or liability. The
settlement does not establish wrongdoing or liability for purposes of
any other proceeding.
The SEC censured SBFM and CGMI and ordered them to cease and desist from
violations of Sections 206(1) and 206(2) of the Advisers Act. The order
requires Citigroup to pay $208.1 million, including $109 million in
disgorgement of profits, $19.1 million in interest, and a civil money
penalty of $80 million. Approximately $24.4 million has already been paid
to the Affected Funds, primarily through fee waivers. The remaining $183.7
million, including the penalty, will be paid to the U.S. Treasury and then
distributed pursuant to a plan to be prepared

by Citigroup and submitted within 90 days of the entry of the order for
approval by the SEC. The order also requires that transfer agency fees
received from the Affected Funds since December 1, 2004 less certain
expenses be placed in escrow and provides that a portion of such fees may
be subsequently distributed in accordance with the terms of the order.
The order requires SBFM to recommend a new transfer agent contract to
the Affected Fund boards within 180 days of the entry of the order; if a
Citigroup affiliate submits a proposal to serve as transfer agent or
sub-transfer agent, an independent monitor must be engaged at the expense
of SBFM and CGMI to oversee a competitive bidding process. Under the
order, Citigroup must comply with an amended version of a vendor policy
that Citigroup instituted in August 2004. That policy, as amended, among
other things, requires that when requested by a Fund board, CAM will
retain at its own expense an independent consulting expert to advise and
assist the board on the selection of certain service providers affiliated
with Citigroup.
At this time, there is no certainty as to how the proceeds of the
settlement will be distributed, to whom such distributions will be made,
the methodology by which such distribution will be allocated, and when
such distribution will be made. Although there can be no assurance,
Citigroup does not believe that this matter will have a material adverse
effect on the Funds.
The Funds did not implement the transfer agent arrangement described
above and therefore will not receive any portion of the distributions.
Symbols: HIO, MHF, MHY, MMU, RIT, SBI, TLI, ZIF

Contact:
Brenda Grandell
Director, Closed-End Funds
Citigroup Asset Management
212-291-3775
Media Contact:
Edward Giltenan
Head of Public Relations
Citigroup Asset Management
212-559-6746

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