As filed with the Securities and Exchange Commission on October 25, 2012

 

Securities Act File No. 333-

Investment Company Act File No. 811-05012

 

 

 

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 


 

FORM N-2

 

x

Registration Statement Under the Securities Act of 1933

 

o

Pre-Effective Amendment No.

 

o

Post-Effective Amendment No.

 

 

and/or

 

x

Registration Statement Under the Investment Company Act of 1940

 

x

Amendment No. 11

 

 


 

Credit Suisse Asset Management Income Fund, Inc.

(Exact Name of Registrant as Specified In Charter)

 


 

One Madison Avenue

New York, New York 10010

(Address of Principal Executive Offices)

 

Registrant’s Telephone Number, including Area Code:  212-325-2000

 

John G. Popp

Credit Suisse Asset Management Income Fund, Inc.

One Madison Avenue

New York, New York 10010

(Name and Address of Agent For Service)

 


 

Copies of information to :

 

Rose F. DiMartino, Esq.

Willkie Farr & Gallagher

787 Seventh Avenue

New York, New York  10019

 


 

Approximate Date of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement.

 

If any securities being registered on this form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933, other than securities offered in connection with a dividend reinvestment plan, check the following box.  x

 

It is proposed that this filing will become effective (check appropriate box)

 

x  when declared effective pursuant to section 8(c).

 


 

CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

 

Title of Securities Being Registered

 

Amount Being
Registered(1)

 

Proposed
Maximum
Offering Price
Per Share

 

Proposed
Maximum
Aggregate
Offering
Price(2)

 

Amount of
Registration
Fee

 

Common Stock, $0.001 par value per share

 

 

 

$

 

 

$

40,000,000

 

$

5,456

 

 


(1)

 

There are being registered hereunder a presently indeterminate number of shares of common stock to be offered on an immediate, continuous or delayed basis.

(2)

 

Estimated solely for the purpose of calculating the registration fee, pursuant to Rule 457(o) under the Securities Act of 1933.

 

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 THAT SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.

 

 

 


 


 

The information in this Prospectus is not complete and may be changed.  The Fund may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This Prospectus is not an offer to sell these securities and is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

 

Subject To Completion Dated October 25, 2012

 

Base Prospectus

 

$40,000,000

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

Shares of Common Stock

 


 

Credit Suisse Asset Management Income Fund, Inc.  (“Fund,” “we,” “us” or “our”) is a diversified, closed-end management investment company.  The Fund’s investment objective is current income consistent with the preservation of capital.

 

We may offer, from time to time, in one or more offerings, including through rights offerings, our shares of common stock, par value $.001 per share (“Shares”).  Shares may be offered at prices and on terms to be set forth in one or more supplements to this Prospectus (each, a “Prospectus Supplement”).  You should read this Prospectus and the applicable Prospectus Supplement carefully before your invest in our Shares.

 

Our Shares may be offered directly to one or more purchasers, through agents designated from time to time by us, or to or through underwriters or dealers.  The Prospectus Supplement relating to the offering will identify any agents or underwriters involved in the sale of our Shares, and will set forth any applicable purchase price, fee, commission or discount arrangement between us and our agents or underwriters, or among our underwriters, or the basis upon which such amount may be calculated.  We may not sell any of our Shares through agents, underwriters or dealers without delivery of a Prospectus Supplement describing the method and terms of the particular offering of our Shares.

 

Our Shares are listed on the NYSE MKT under the symbol “CIK.”  The last reported sale price of our Shares, as reported by the NYSE MKT on [                 ], 2012, was $[      ] per Share.  The net asset value of our Shares at the close of business on [                 ], 2012, was $[      ] per Share.

 

Investment in the Shares involves certain risks and special considerations, including risks of investing in lower-rated securities. For a discussion of these and other risks, see “Risks and Special Considerations.”

 

Shares of closed-end investment companies frequently trade at a discount to their net asset value.  If the Fund’s Shares trade at a discount to its net asset value, the risk of loss may increase for purchasers in a public offering.  See “Risks and Special Considerations-Market Price, Discount and Net Asset Value of Shares.”

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or passed upon the adequacy of this Prospectus.  Any representation to the contrary is a criminal offense.

 

This Prospectus, together with any Prospectus Supplement, sets forth concisely the information about the Fund that a prospective investor should know before investing.  You should read this Prospectus and applicable Prospectus Supplement, which contain important information, before deciding whether to invest in the Shares.  You should retain the Prospectus and Prospectus Supplement for future reference.  A Statement of Additional Information (“SAI”), dated [               ], 2012, containing additional information about the Fund, has been filed with the Securities and Exchange Commission (“SEC”) and is incorporated by reference in its entirety into this Prospectus.  The Table of Contents for the SAI is on page [44] of the Prospectus.  A copy of the SAI can be obtained without charge by writing to the Fund at c/o Credit Suisse Asset Management, LLC, One Madison Avenue, New York, New York 10010, by calling 1-800-293-1232, or from the SEC’s website at http://www.sec.gov.  Copies of the Fund’s Annual Report and Semi-Annual Report and other information about the Fund may

 



 

be obtained upon request by writing to the Fund,  by calling 1-800-293-1232, or by visiting the Fund’s website at www.credit-suisse.com/us/funds.

 

Our Shares do not represent a deposit or obligation of, and are not guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.

 

Prospectus dated [          ], 2012

 


 


 

TABLE OF CONTENTS

 

PROSPECTUS SUMMARY

1

SUMMARY OF FUND EXPENSES

11

FINANCIAL HIGHLIGHTS

11

USE OF PROCEEDS

15

THE FUND

15

INVESTMENT OBJECTIVE

15

INVESTMENT POLICIES

15

INVESTMENT RESTRICTIONS

22

RISKS AND SPECIAL CONSIDERATIONS

23

MANAGEMENT OF THE FUND

32

EXPENSES

33

NET ASSET VALUE

33

DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

34

FEDERAL INCOME TAXATION

35

REPURCHASE OF SHARES

40

DESCRIPTION OF SHARES

41

PLAN OF DISTRIBUTION

41

CLOSED-END FUND STRUCTURE

43

CUSTODIAN, TRANSFER AGENT AND DIVIDEND-PAYING AGENT

43

LEGAL PROCEEDINGS

43

REPORTS TO SHAREHOLDERS

43

ADDITIONAL INFORMATION

43

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

44

 

You should rely only on the information contained in, or incorporated by reference into, this Prospectus and any related Prospectus Supplement in making your investment decisions. The Fund has not authorized any person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The Fund is not making an offer to sell the Shares in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this Prospectus and any Prospectus Supplement is accurate only as of the dates on their covers. The Fund’s business, financial condition and prospects may have changed since the date of its description in this Prospectus or the date of its description in any Prospectus Supplement.

 


 


 

PROSPECTUS SUMMARY

 

The following information is only a summary.  You should consider the more detailed information contained in the Prospectus and in any related Prospectus Supplement and in the SAI before purchasing Shares, especially the information under “Risks and Special Considerations” on page [23] of the Prospectus.

 

The Fund

 

The Fund is a diversified, closed-end management investment company.  The Fund commenced operations on March 23, 1987, following its initial public offering.  See “The Fund.”

 

The Fund’s Shares are listed for trading on the NYSE MKT under the symbol “CIK.”  As of [               ], 2012, the net assets of the Fund were $[              ] and the Fund had outstanding [                  ] Shares.  The last reported sales price of the Fund’s Shares, as reported by the NYSE MKT on [                   ], 2012 was $[      ] per Share.  The net asset value of the Fund’s Shares at the close of business on [                   ], 2012 was $[      ] per Share.  See “Description of Shares.”

 

 

 

The Offering

 

We may offer, from time to time, in one or more offerings, including through rights offerings, up to $[                  ] of our Shares on terms to be determined at the time of the offering.  The Shares may be offered at prices and on terms to be set forth in one or more Prospectus Supplements.  You should read this Prospectus and the applicable Prospectus Supplement carefully before you invest in our Shares.  Our Shares may be offered directly to one or more purchasers, through agents designated from time to time by us, or to or through underwriters or dealers.  The Prospectus Supplement relating to the offering will identify any agents, underwriters or dealers involved in the sale of our Shares, and will set forth any applicable purchase price, fee, commission or discount arrangement between us and our agents or underwriters, or among our underwriters, or the basis upon which such amount may be calculated.  See “Plan of Distribution.” We may not sell any of our Shares through agents, underwriters or dealers without delivery of a Prospectus Supplement describing the method and terms of the particular offering of our Shares.

 

 

 

Use of Proceeds

 

We intend to use the net proceeds from the sale of our Shares primarily to invest in accordance with our investment objectives and policies.  Proceeds will be invested within approximately 30 days of receipt by the Fund.  See “Use of Proceeds.”

 

 

 

Investment Objective

 

The Fund’s investment objective is current income consistent with the preservation of capital.  The Fund is not intended to be a complete investment program and there can be no assurance that the Fund will achieve its objectives.

 

 

 

Investment Policies

 

Under normal circumstances, the Fund invests at least 75% of its total assets in fixed income securities, such as bonds, convertible securities and preferred stocks.  The Fund’s investments in fixed income securities are not subject to any rating quality limitation.  The Fund primarily invests in high yield U.S. corporate fixed income securities that are in the lower rating categories of Moody’s Investor Services, Inc. (“Moody’s”), Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) or another nationally recognized ratings service.  Lower-rated securities generally provide yields superior to those of more highly-rated securities, but involve greater risks and are speculative in nature.  See “Risks and Special Considerations — Lower-Rated Securities.”  The Fund may also invest in securities rated single A or higher by Moody’s or S&P and unrated corporate fixed income securities.

 

1



 

 

 

For information on the rating categories of Moody’s and S&P, see the Appendix to the SAI.

 

The Fund may also invest in debt securities issued or guaranteed by the U.S. government, or by agencies or instrumentalities established or sponsored by the U.S. government, including mortgage-backed securities.  Depending on market conditions, the Fund may invest a substantial portion of its assets in mortgage-backed securities.  Mortgage-backed securities are collateralized by mortgages or interests in mortgages and may be issued by government or non-government entities.  Mortgage-backed securities issued by government entities typically provide a monthly payment consisting of interest and principal payments, and additional payments will be made out of unscheduled payments of principal.  Non-government issued mortgage-backed securities may offer higher yields than those issued by government entities, but may be subject to greater price fluctuations.

 

The Fund may invest in loans and loan participations (collectively, “Loans”), including senior secured floating Loans (“Senior Loans”), “second lien” secured floating rate Loans (“Second Lien Loans”), and other types of secured Loans with fixed and variable interest rates.

 

Credit Suisse Asset Management, LLC, the Fund’s investment adviser (“Credit Suisse” or the “Investment Adviser”), may take full advantage of the entire range of maturities of fixed income securities and may adjust the average maturity of the investments held in the Fund’s portfolio from time to time, depending on its assessment of relative yields of securities of different maturities and its expectations of future changes in interest rates.  It is expected that the average weighted maturity of the Fund’s investment portfolio will be 5 to 10 years.

 

The Fund invests in debt obligations and other fixed income securities denominated in U.S. dollars, non-U.S. currencies or composite currencies, including:

 

·       debt obligations issued or guaranteed by foreign national, provincial, state, municipal or other governments with taxing authority or by their agencies or instrumentalities;

 

·       debt obligations of supranational entities;

 

·       debt obligations of the U.S. government issued in non-dollar denominated securities; and

 

·       dollar and non-dollar denominated debt obligations and other fixed income securities of foreign and U.S. corporate issuers.

 

The Fund may invest a portion of its assets in the securities of issuers located in emerging markets.  The Fund has a fundamental policy not to invest more than 5% of the value of its total assets in securities denominated in a currency other than the U.S. dollar.

 

The Fund may invest in credit default swap agreements. The Fund may enter into credit default swap agreements either as a buyer or a seller. The Fund may buy a credit default swap to attempt to mitigate the risk of default or credit quality deterioration in one or more individual holdings or in a segment of the fixed income securities market. The Fund may sell a credit default

 

2



 

 

 

swap in an attempt to gain exposure to an underlying issuer’s credit quality characteristics without investing directly in that issuer.  There is no limit on the Fund’s ability to enter into credit default swap agreements.

 

 

 

 

 

To enhance return as market opportunities arise, the Fund may use certain other investment techniques, including investing in repurchase agreements, interest rate futures and related options and illiquid securities and engaging in short sales.  See “Investment Policies — Other Investment Techniques.” 

 

 

 

Investment Restrictions

 

The Fund has certain investment restrictions that may not be changed without approval by a majority of the Fund’s outstanding voting securities.  These restrictions concern issuance of senior securities, borrowing, lending, concentration, diversification and other matters.  See “Investment Restrictions.”

 

 

 

Risks (See generally “Risks and Special Considerations” for more information on these and other risks)

 

Investing in the Fund involves certain risks, including the following:

 

Investment and Market Risk .  An investment in the Fund’s Shares is subject to investment risk, including the possible loss of the entire principal amount that you invest.  Your investment in Shares represents an indirect investment in the securities owned by the Fund.  The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably.  If the current global economic downturn continues into a prolonged recession or deteriorates further, the ability of issuers of the corporate fixed income securities and other securities in which the Fund invests to service their obligations could be materially and adversely affected.  The value of the securities in which the Fund invests will affect the value of the Shares.  Your Shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.  See “Risks and Special Considerations — Investment and Market Risk.”

 

Lower-Rated Securities Risk .  At any time, all or substantially all of the Fund’s portfolio may be invested in medium-grade or below investment grade fixed income securities as determined by a nationally recognized rating service and in unrated securities of comparable quality.  Lower-rated securities are regarded as being predominantly speculative as to the issuer’s ability to make payments of principal and interest.  Investment in such securities involves substantial risk.  Issuers of lower-rated securities 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 lower-rated securities 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’s ability to service its debt obligations also may be adversely affected by specific issuer developments, the issuer’s inability to meet specific projected business forecasts or the unavailability of additional financing.  The risk of loss due to default by the issuer is significantly greater for the holders of lower-rated securities because such securities may be unsecured and may be subordinate to other creditors of the issuer.  See “Risks and Special

 

3



 

 

 

Considerations — Lower-Rated Securities Risk.”

 

 

 

 

 

Credit Risk .  Credit risk is the risk that one or more of the Fund’s investments in debt securities or other instruments will decline in price, or fail to pay interest, liquidation value or principal when due, because the issuer of the obligation or the issuer of a reference security experiences an actual or perceived decline in its financial status.  In addition to the credit risks associated with high yield securities, the Fund could also lose money if the issuer of other debt obligations, or the counterparty to a derivatives contract, repurchase agreement, loan of portfolio securities or other obligation, is, or is perceived to be, unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations.  The downgrade of a security may further decrease its value.  See “Risks and Special Considerations — Credit Risk.”

 

Interest Rate Risk .  Generally, when market interest rates rise, the prices of debt obligations fall, and vice versa.  Interest rate risk is the risk that debt obligations and other instruments in the Fund’s portfolio will decline in value because of increases in market interest rates.  This risk may be particularly acute because market interest rates are currently at historically low levels.  The prices of long-term debt obligations generally fluctuate more than prices of short-term debt obligations as interest rates change.  During periods of rising interest rates, the average life of certain types of securities may be extended due to slower than expected payments.  This may lock in a below market yield, increase the security’s duration and reduce the security’s value.

 

Corporate Debt Risk. The Fund may invest in debt securities of non-governmental issuers. Like all debt securities, corporate debt securities generally represent an issuer’s obligation to repay to the investor (or lender) the amount borrowed plus interest over a specified time period. A typical corporate bond specifies a fixed date when the amount borrowed (principal) is due in full, known as the maturity date, and specifies dates when periodic interest (coupon) payments will be made over the life of the security.

 

Prices of corporate debt securities fluctuate and, in particular, are subject to several key risks including, but not limited to, interest rate risk, credit risk and prepayment risk. The market value of a corporate bond may be affected by the credit rating of the corporation, the corporation’s performance and perceptions of the corporation in the market place. There is a risk that the issuers of the corporate debt securities in which the Fund may invest may not be able to meet their obligations on interest or principal payments at the time called for by an instrument.

 

Foreign Securities Risk .  Investing in securities of foreign entities and securities denominated in foreign currencies involves certain risks not involved in domestic investments, including, but not limited to, fluctuations in foreign exchange rates, future foreign political and economic developments, different legal and accounting systems and the possible imposition of exchange controls or other foreign governmental laws or restrictions.  Securities prices in different countries are subject to different economic, financial, political and social factors.  Since the Fund may invest in securities denominated or quoted in currencies other than the U.S. dollar, changes in foreign currency exchange rates may affect the value of securities in the Fund and the unrealized appreciation or depreciation of investments.  Currencies of certain countries may be volatile and therefore may affect the value of securities denominated in such currencies.  The Fund may, but is not

 

4



 

 

 

obligated to, engage in certain transactions to hedge the currency-related risks of investing in non-U.S. dollar denominated securities.  In addition, with respect to certain foreign countries, there is the possibility of expropriation of assets, confiscatory taxation, difficulty in obtaining or enforcing a court judgment, economic, political or social instability or diplomatic developments that could affect investments in those countries.  Moreover, individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rates of inflation, capital reinvestment, resources, self-sufficiency and balance of payments position.  Certain foreign investments also may be subject to foreign withholding taxes.  These risks often are heightened for investments in smaller, emerging capital markets.  See “Risks and Special Considerations — Foreign Securities Risk.”

 

 

 

 

 

Emerging Market Securities Risk .  Investing in the securities of issuers located in emerging markets involves special considerations not typically associated with investing in the securities of U.S. issuers and other developed market issuers, including heightened risks of expropriation and/or nationalization, armed conflict, confiscatory taxation, restrictions on transfers of assets, lack of uniform accounting and auditing standards, difficulties in dividend withholding reclaims procedures, less publicly available financial and other information and potential difficulties in enforcing contractual obligations.

 

The economies of individual emerging market countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rate of inflation, currency depreciation, capital reinvestment, resource self-sufficiency and balance of payments position. Governments of many developing and emerging market countries have exercised and continue to exercise substantial influence over many aspects of the private sector. In some cases, the government owns or controls many companies, including some of the largest in the country.

 

Accordingly, government actions could have a significant effect on economic conditions in an emerging market country and on market conditions, prices and yields of securities in the Fund’s portfolio. Moreover, the economies of emerging market countries generally are heavily dependent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade.  See “Risks and Special Considerations — Emerging Market Securities Risk.”

 

Illiquid Securities Risk .  The Fund may invest in securities for which no readily available market exists or are otherwise considered illiquid.  The Fund may not be able readily to dispose of such securities at prices that approximate those at which the Fund could sell such securities if they were more widely traded and, as result of such illiquidity, the Fund may have to sell other investments or engage in borrowing transactions if necessary to raise cash to meet its obligations.  Illiquid securities generally trade at a discount.  See “Risks and Special Considerations — Illiquid Securities Risk.”

 

Prepayment Risk .  If interest rates fall, the principal on bonds and loans held by the Fund may be paid earlier than expected.  If this happens, the proceeds from a prepaid security may be reinvested by the Fund in securities bearing lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders.  See “Risks and Special Considerations —

 

5



 

 

 

Prepayment Risk.”

 

Preferred Stock Risk.  Preferred stocks are unique securities that combine some of the characteristics of both common stocks and bonds.  Preferred stocks generally pay a fixed rate of return and are sold on the basis of current yield, like bonds.  However, because they are equity securities, preferred stocks provide equity ownership of a company, and the income is paid in the form of dividends.  Preferred stocks typically have a yield advantage over common stocks as well as comparably-rated fixed income investments.  Preferred stocks are typically subordinated to bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments.  Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors.  Preferred stock also may be subject to optional or mandatory redemption provisions.

 

Mortgage-Backed Securities Risk .  The Fund may invest a substantial portion of its total assets in mortgage-backed securities.  The value of mortgage-backed securities is subject to change due to shifts in the market’s perception of issuers, and regulatory or tax changes may adversely affect the mortgage securities market as a whole.  Foreclosures and prepayments, which occur when unscheduled or early payments are made on the underlying mortgages, may shorten the effective maturities on these securities.  The Fund’s yield may be affected by reinvestment of prepayments at higher or lower rates than the original investment.  Prepayments tend to increase due to refinancing of mortgages as interest rates decline.  In addition, like other debt securities, the values of mortgage-backed securities will generally fluctuate in response to changes in interest rates.  See “Risks and Special Considerations — Mortgage-Backed Securities Risk.”

 

Senior Loans Risk. The Fund’s investments in senior loans are expected to typically be below investment grade. These investments are considered speculative because of the credit risk of their issuers. Such companies are more likely to default on their payments of interest and principal owed to the Fund, and such defaults could reduce the Fund’s net asset value and income distributions. An economic downturn generally leads to a higher non-payment rate, and a debt obligation may lose significant value before a default occurs. Moreover, any specific collateral used to secure a loan may decline in value or become illiquid, which would adversely affect the loan’s value.

 

Like other debt instruments, senior loans are subject to the risk of non- payment of scheduled interest or principal. Such non-payment would result in a reduction of income to the Fund, a reduction in the value of the investment and a potential decrease in the net asset value per share of the Fund. There can be no assurance that the liquidation of any collateral securing a loan would satisfy the borrower’s obligation in the event of non- payment of scheduled interest or principal payments, or that such collateral could be readily liquidated. In the event of bankruptcy of a borrower, the Fund could experience delays or limitations with respect to its ability to realize the benefits of the collateral securing a senior loan. The collateral securing a senior loan may lose all or substantially all of its value in the event of bankruptcy of a borrower. Some senior loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate such senior loans to presently existing or future indebtedness of

 

6



 

 

 

the borrower or take other action detrimental to the holders of senior loans including, in certain circumstances, invalidating such senior loans or causing interest previously paid to be refunded to the borrower. If interest were required to be refunded, it could negatively affect the Fund’s performance. See “Risks and Special Considerations—Senior Loans Risk.”

 

 

 

 

 

Conflict of Interest Risk.   Affiliates of Credit Suisse may act as underwriter, lead agent or administrative agent for loans and participate in the secondary market for loans.  Because of limitations imposed by applicable law, the presence of Credit Suisse’s affiliates in the primary and secondary markets for loans may restrict the fund’s ability to acquire some loans or affect the timing or price of such acquisitions.  See “Risks and Special Considerations — Conflict of Interest Risk.”

 

Derivatives Risk. The Fund may invest in derivatives, such as credit default swap agreements and interest rate futures and related options. The primary risk of derivatives is the same as the risk of the underlying asset, namely that the value of the underlying asset may increase or decrease. Adverse movements in the value of the underlying asset can expose the Fund to losses. In addition, risks in the use of derivatives include:

 

·       an imperfect correlation between the price of derivatives and the movement of the securities prices, interest rates or currency exchange rates being hedged or replicated;

·       the possible absence of a liquid secondary market for any particular derivative at any time;

·       the potential loss if the counterparty to the transaction does not perform as promised;

·       the possible need to defer closing out certain positions to avoid adverse tax consequences, as well as the possibility that derivative transactions may result in acceleration of gain, deferral of losses or a change in the character of gain realized;

·       the risk that the financial intermediary “manufacturing” the over-the-counter derivative, being the most active market maker and offering the best price for repurchase, will not continue to create a credible market in the derivative;

·       because certain derivatives are “manufactured” by financial institutions, the risk that the Fund may develop a substantial exposure to financial institution counterparties; and

·       the risk that a full and complete appreciation of the complexity of derivatives and how future value is affected by various factors including changing interest rates, exchange rates and credit quality is not attained.

 

There is no guarantee that derivatives will provide successful results and any success in their use depends on a variety of factors including the ability of the Investment Adviser to predict correctly the direction of interest rates, securities prices, currency exchange rates and other factors.  See “Risks and Special Considerations — Derivatives Risk.”

 

Counterparty Risk. The Fund will be subject to credit risk with respect to the counterparties to the derivative contracts purchased or sold by the Fund. Recently, several broker-dealers and other financial institutions have experienced extreme financial difficulty, sometimes resulting in bankruptcy of the institution. Although the Investment Adviser monitors the

 

7



 

 

 

creditworthiness of the Fund’s counterparties, there can be no assurance that the Fund’s counterparties will not experience similar difficulties, possibly resulting in losses to the Fund. If a counterparty becomes bankrupt, or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining any recovery under the derivative contract in a bankruptcy or other reorganization proceeding. The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances. See “Risks and Special Considerations—Counterparty Risk.”

 

Market Price, Discount and Net Asset Value of Shares .  As with any stock, the price of the Fund’s Shares fluctuates with market conditions and other factors.  Shares of the Fund, a closed-end investment company, may trade in the market at a discount from their net asset value.  See “Risks and Special Considerations — Market Price, Discount and Net Asset Value of Shares.”

 

Potential Yield Reduction . An offering of Shares is expected to present the opportunity to invest in high yielding securities. This expectation is based on the current market environment for high yield debt securities, which could change in response to interest rate levels, general economic conditions, specific industry conditions and other factors. If the market environment for high yield debt securities changes in a manner that adversely affects the yield of such securities, the offering of Shares could cause the Fund to invest in securities that are lower yielding than those in which it is currently invested. In addition, even if the market for high yield debt securities continues to present attractive investment opportunities, there is no assurance that the Fund will be able to invest the proceeds of an offering of Shares in high yielding securities or that other potential benefits of the offering will be realized. An offering of Shares could reduce the Fund’s current dividend yield if the Fund is unable to invest the proceeds of the offering in securities that provide a yield at least equal to the current dividend yield. See “Special Considerations and Risk Factors — Potential Yield Reduction.”

 

Anti-Takeover Provisions. Certain provisions of the Charter and Bylaws of the Fund may have the effect of anti-takeover measures.  The Bylaws provide that the Board of Directors shall be divided into three staggered classes, each having a three-year term, so that only one class of directors is elected each year.  Removal of any director may occur only by a two-thirds stockholder vote and only for cause.  The Charter gives the Board of Directors sole authority over Bylaw amendments.  Meetings of stockholders are called by the Board.  Stockholders wishing to call a special meeting may do so only upon the written request of holders of a majority of the outstanding shares . See “Risks and Special Considerations—Anti-Takeover Provisions” and “Description of Shares.”

 

For a discussion of these and other risks, see “Risks and Special Considerations.”

 

 

 

Information Regarding the Investment Adviser

 

Credit Suisse, the Fund’s investment adviser, is part of the asset management business of Credit Suisse Group AG, one of the world’s leading banks.  Credit Suisse serves as the Fund’s investment adviser with respect to all investments and is responsible for making all investment decisions.  Credit Suisse receives from the Fund, as compensation for its advisory services, an annual fee, computed weekly and payable quarterly as follows: 0.50% of the lower of the weekly stock price (market value) of the Fund’s outstanding shares or its average weekly net assets.  The Investment Adviser is located at

 

8



 

 

 

One Madison Avenue, New York, New York 10010.  See “Management of the Fund — Investment Adviser.”

 

Potential Conflicts of Interest .  Because the Investment Adviser receives a fee based on assets, it will benefit from the increase in assets that will result from offerings of Shares.  It is not possible to state precisely the amount of additional compensation that the Investment Adviser might receive as a result of the offerings because it is not known how many Shares will be sold because the proceeds of offerings will be invested in additional portfolio securities, which will fluctuate in value.

 

 

 

Portfolio Managers

 

The Credit Suisse US High Yield Management Team is responsible for the day-to-day portfolio management of the Fund.  The current team members are Thomas J. Flannery and Wing Chan.  Thomas J. Flannery and Wing Chan are the portfolio managers of the team sharing in the day-to-day responsibilities of portfolio management, including overall industry, credit, duration, yield curve positioning and security selection and industry and issuer allocations.

 

See “Management of the Fund — Portfolio Management.”

 

 

 

Administrator

 

State Street serves as the Fund’s administrator.  The Fund pays State Street, for administrative services, a fee, exclusive of out-of-pocket expenses, calculated in total for all the funds advised by Credit Suisse that are administered or co-administered by State Street and allocated based upon the relative average net assets of each fund, subject to an annual minimum fee.

 

See “Management of the Fund — Administrator.”

 

 

 

Custodian and Transfer Agent

 

State Street acts as the Fund’s custodian pursuant to a custody agreement.  Computershare Trust Company, N.A. (“Computershare”), acts as the Fund’s transfer agent and dividend-paying agent.

 

See “Custodian, Transfer Agent and Dividend-Paying Agent.”

 

 

 

Dividends and Distributions

 

The Fund declares and pays dividends on a monthly basis.  Distributions of net realized capital gains, if any, are declared and paid at least annually.  See “Dividends and Distributions; Dividend Reinvestment and Cash Purchase Plan.”

 

 

 

Dividend Reinvestment and Cash Purchase Plan

 

The Fund offers a Dividend Reinvestment and Cash Purchase Plan (the “Plan”) to its common stockholders.  Computershare acts as Plan Agent for stockholders in administering the Plan.  Participation in the Plan is voluntary.  For shareholders participating in the Plan, all dividend and capital gain distributions are reinvested in additional Shares of the Fund either purchased on the open market, or issued by the Fund if the Shares are trading at or above their net asset value.  A shareholder whose Shares are held through a bank, broker or nominee should contact such bank, broker or nominee to confirm that they are able to participate in the Plan.  See “Dividends and Distributions; Dividend Reinvestment and Cash Purchase Plan.”

 

 

 

Taxation

 

Tax considerations for an investor in the Fund are summarized under “Federal Income Taxation.”

 

 

 

Repurchase of Shares

 

The Fund may, from time to time, take action to attempt to reduce or eliminate any market value discount from net asset value (“NAV”).  The Board, in consultation with Credit Suisse, will periodically review the

 

9



 

 

 

possibility of open market repurchases or tender offers for Shares of the Fund.  There can be no assurance that the Board will, in fact, decide to undertake either of these actions or, if undertaken, that such repurchases or tender offers will result in the Shares trading at a price which is equal to or close to NAV.  The Fund may borrow to finance such repurchases or tenders.  See “Repurchase of Shares.”

 

10


 


 

SUMMARY OF FUND EXPENSES

 

Shareholder Transaction Expenses

 

 

 

Sales Load (as a percentage of offering price)(1)

 

up to 3.00

%

Offering Expenses (as a percentage of offering price)(1)

 

 

%

Dividend Reinvestment Plan Fees

 

None

(2)

 

 

 

 

Annual Fund Operating Expenses (as a percentage of average net assets attributable to the Fund’s common shares)

 

 

 

Management Fees(3)

 

0.50

%

Other Expenses(4)

 

0.23

%

Total Annual Operating Expenses

 

0.73

%

 


(1)     If the Shares are sold to or through underwriters, the Prospectus Supplement will set forth any applicable sales load, which may be lower than 3.00%, and the estimated offering expenses.

(2)     Participants in the Fund’s dividend reinvestment plan pay only transaction-based charges.  Actual costs will vary for each participant depending on the nature and number of transactions made.  See “Dividends and Distributions; Dividend Reinvestment and Cash Purchase Plan.”

(3)     See  “Management of the Fund — Investment Adviser.”

(4)     “Other Expenses” have been estimated for the Fund’s current fiscal year.

 

Example:

 

An investor would directly or indirectly pay the following expenses on a $1,000 investment, assuming a 5% annual return throughout the period.

 

 

 

1 Year

 

3 Years

 

5 Years

 

10 Years

 

Total Expenses Incurred

 

$

37

 

$

53

 

$

69

 

$

118

 

 

The above table and example are intended to assist investors in understanding the various costs and expenses directly or indirectly associated with investing in Shares of the Fund. The “Example” assumes that all dividends and other distributions are reinvested at net asset value and that the percentage amounts listed in the table above under Total Annual Operating Expenses remain the same in the years shown. The above table and example and the assumption in the example of a 5% annual return are required by regulations of the SEC that are applicable to all investment companies; the assumed 5% annual return is not a prediction of, and does not represent, the projected or actual performance of the Fund’s Shares. For more complete descriptions of certain of the Fund’s costs and expenses, see “Management of the Fund” and “Expenses.”  In addition, while the example assumes reinvestment of all dividends and distributions at NAV, participants in the Fund’s dividend reinvestment and cash purchase plan may receive Shares purchased or issued at a price or value different from NAV.  See “Dividends and Distributions; Dividend Reinvestment and Cash Purchase Plan.”

 

The example should not be considered a representation of past or future expenses, and the Fund’s actual expenses may be greater than or less than those shown. Moreover, the Fund’s actual rate of return may be greater or less than the hypothetical 5% return shown in the example.

 

FINANCIAL HIGHLIGHTS

 

The following financial highlights table is intended to help you understand the Fund’s financial performance.  Certain information reflects financial results from a single Fund share.  The information in the financial highlights for each of the years presented (except for the six months ended June 30, 2012) has been audited by [                  ], independent registered public accounting firm, whose report appears in the Fund’s Annual Report to Shareholders.  The information in the financial highlights for the six months ended June 30, 2012 is unaudited.  The Fund’s financial statements are included in the Fund’s Annual and Semi-Annual Reports and are incorporated by reference into the SAI.  The Annual and Semi-Annual Reports may be obtained without charge by calling 1-800-293-1232 or visiting the Fund’s website, www.credit-suisse.com/us/funds.

 

11



 

 

 

For the
Six Months
Ended
6/30/12 

 

For the Year Ended December 31,

 

Per share operating performance

 

(unaudited)

 

2011

 

2010

 

2009

 

2008

 

2007

 

Net asset value, beginning of period

 

$

3.60

 

$

3.70

 

$

3.56

 

$

2.52

 

$

4.06

 

$

4.34

 

INVESTMENT OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

$

0.15

 

0.30

 

0.32

 

0.31

 

0.35

 

0.36

 

Net gain (loss) on investments, swap contracts, futures contracts and foreign currency related items (both realized and unrealized)

 

$

0.10

 

(0.11

)

0.17

 

1.07

 

(1.46

)

(0.31

)

Total from investment activities

 

0.25

 

0.19

 

0.49

 

1.38

 

(1.11

)

0.05

 

LESS DIVIDENDS AND DISTRIBUTIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends from net investment income

 

$

(0.16

)

(0.29

)

(0.35

)

(0.30

)

(0.43

)

(0.33

)

Distributions from return of capital

 

 

 

 

(0.04

)

 

 

Total dividends and distributions

 

$

(0.16

)

(0.29

)

(0.35

)

(0.34

)

(0.43

)

(0.33

)

Net asset value, end of period

 

$

3.69

 

$

3.60

 

$

3.70

 

$

3.56

 

$

2.52

 

$

4.06

 

Per share market value, end of period

 

$

3.92

 

$

3.65

 

$

3.56

 

$

3.36

 

$

2.30

 

$

3.58

 

TOTAL INVESTMENT RETURN(2)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net asset value

 

7.01

%

5.35

%

14.71

%

58.07

%

(27.78

)%

1.59

%

Market value

 

12.12

%

11.02

%

16.94

%

63.46

%

(25.25

)%

(11.32

)%

RATIOS AND SUPPLEMENTAL DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period (000s omitted)

 

$

184,889

 

$

180,011

 

$

184,943

 

$

177,654

 

$

125,688

 

$

202,914

 

Ratio of expenses to average net assets

 

0.73

%(3)

0.73

%

0.76

%

0.73

%

0.73

%

0.78

%

Ratio of net investment income to average net assets

 

8.35

%(3)

8.09

%

8.76

%

10.14

%

9.96

%

8.75

%

Portfolio turnover rate

 

32.0

%

57.0

%

86.0

%

54.0

%

32.1

%

49.7

%

 


(1)   This amount represents less than $(0.01) per share.

 

(2)   Total investment return at net asset value is based on changes in the net asset value of fund shares and assumes reinvestment of dividends and distributions, if any.  Total investment return at market value is based on changes in the market price at which the fund’s shares traded on the stock exchange during the period and assumes reinvestment of dividends and distributions, if any, at actual prices pursuant to the fund’s dividend reinvestment program.  Because the fund’s shares trade in the stock market based on investor demand, the fund may trade at a price higher or lower than its NAV.  Therefore, returns are calculated based on share price and NAV.

 

(3)   Annualized.

 

12



 

 

 

For the Year Ended December 31,

 

Per share operating performance

 

2006

 

2005

 

2004

 

2003

 

2002

 

Net asset value, beginning of period

 

$

4.24

 

$

4.56

 

$

4.41

 

$

3.91

 

$

4.74

 

INVESTMENT OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

0.36

 

0.36

 

0.35

 

0.37

 

0.42

 

Net gain (loss) on investments, swap contracts, futures contracts and foreign currency related items (both realized and unrealized)

 

0.14

 

0.28

 

0.22

 

0.58

 

(0.55

)

Total from investment activities

 

0.50

 

0.08

 

0.57

 

0.95

 

(0.13

)

LESS DIVIDENDS AND DISTRIBUTIONS

 

 

 

 

 

 

 

 

 

 

 

Dividends from net investment income

 

(0.40

)

(0.40

)

(0.40

)

(0.43

)

(0.62

)

Distributions from return of capital

 

 

(0.00

)(1)

(0.02

)

(0.02

)

(0.08

)

Total dividends and distributions

 

(0.40

)

(0.40

)

(0.42

)

(0.45

)

(0.70

)

Net asset value, end of period

 

$

4.34

 

$

4.24

 

$

4.56

 

$

4.41

 

$

3.91

 

Per share market value, end of period

 

$

4.38

 

$

3.67

 

$

4.45

 

$

4.50

 

$

3.88

 

TOTAL INVESTMENT RETURN(2)

 

 

 

 

 

 

 

 

 

 

 

Net asset value

 

12.73

%

1.74

%

13.55

%

24.59

%

5.26

%

Market value

 

31.44

%

9.76

%

8.60

%

28.11

%

10.52

%

RATIOS AND SUPPLEMENTAL DATA

 

 

 

 

 

 

 

 

 

 

 

Net assets, end of period (000s omitted)

 

$

216,318

 

$

211,536

 

$

227,374

 

$

219,864

 

$

195,089

 

Ratio of expenses to average net assets

 

0.74

%

0.82

%

0.78

%

0.78

%

0.79

%

Ratio of net investment income to average net assets

 

8.32

%

8.20

%

8.08

%

8.83

%

9.93

%

Portfolio turnover rate

 

58.0

%

61.5

%

57.8

%

77.8

%

61.1

%

 


(1)   This amount represents less than $(0.01) per share.

 

(2)   Total investment return at net asset value is based on changes in the net asset value of fund shares and assumes reinvestment of dividends and distributions, if any.  Total investment return at market value is based on changes in the market price at which the fund’s shares traded on the stock exchange during the period and assumes reinvestment of dividends and distributions, if any, at actual prices pursuant to the fund’s dividend reinvestment program.  Because the fund’s shares trade in the stock market based on investor demand, the fund may trade at a price higher or lower than its NAV.  Therefore, returns are calculated based on share price and NAV.

 

(3)   Annualized.

 

Trading and Net Asset Value Information

 

In the past, the Fund’s common shares have traded at both a premium and at a discount in relation to NAV. Shares of closed-end investment companies such as the Fund frequently trade at a discount from NAV. See “Closed-End Fund Structure.”

 

The Fund’s Shares are listed and traded on the NYSE MKT. The average weekly trading volume of the Shares on the NYSE MKT during the twelve months ended [               ], 2012 was [          ] shares. The following table shows for the quarters indicated: (1) the high and low sale price of the Shares at the close of trading on the NYSE MKT; (2) the high and low NAV per Share; and (3) the high and low premium or discount to NAV at which the Fund’s Shares were trading at the close of trading (as a percentage of NAV).

 

13



 

 

 

Price

 

Net Asset Value

 

Premium/(Discount) To
Net Asset Value

 

Fiscal Quarter Ended

 

High

 

Low

 

High

 

Low

 

High

 

Low

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2010

 

$

3.70

 

$

3.18

 

$

3.59

 

$

3.51

 

3.06

%

-9.40

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2010

 

$

3.71

 

$

3.18

 

$

3.65

 

$

3.49

 

1.64

%

-8.88

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2010

 

$

3.70

 

$

3.42

 

$

3.62

 

$

3.51

 

2.21

%

-2.56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2010

 

$

3.76

 

$

3.36

 

$

3.75

 

$

3.70

 

0.27

%

-9.19

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2011

 

$

3.71

 

$

3.48

 

$

3.84

 

$

3.73

 

-3.39

%

-6.70

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2011

 

$

4.04

 

$

3.62

 

$

3.84

 

$

3.82

 

5.21

%

-5.24

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2011

 

$

3.93

 

$

3.27

 

$

3.77

 

$

3.65

 

4.24

%

-10.41

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2011

 

$

3.70

 

$

3.32

 

$

3.63

 

$

3.45

 

1.93

%

-3.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31, 2012

 

$

3.94

 

$

3.64

 

$

3.68

 

$

3.61

 

7.07

%

0.83

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2012

 

$

3.92

 

$

3.67

 

$

3.69

 

$

3.68

 

6.23

%

-0.27

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2012

 

$

4.04

 

$

3.83

 

$

3.77

 

$

3.69

 

7.16

%

3.79

%

 

On [                 ], 2012, the per Share net asset value was $[      ] and the per Share market price was $[        ], representing a [        ]% [premium] over such net asset value.

 

14



 

USE OF PROCEEDS

 

The Fund intends to invest the net proceeds of offerings in accordance with its investment objective and policies.  It is anticipated that the Fund will be able to invest substantially all of the net proceeds of an offering in accordance with its investment objective and policies within approximately 30 days after the completion of the offering.  Pending such investment, the Fund anticipates investing the proceeds in short-term securities issued by the U.S. government or its agencies or instrumentalities or in high quality, short-term or long-term debt obligations or money market instruments. See “Investment Objective” and “Investment Policies.”

 

THE FUND

 

The Fund was organized as a corporation under the laws of the State of Maryland on February 11, 1987, and it is registered under the 1940 Act.  The Fund has been engaged in business as a diversified, closed-end management investment company since March 23, 1987, when it completed an initial public offering of shares of common stock, par value $0.001 per share.  The Fund’s common shares are traded on the NYSE MKT under the symbol “CIK.”

 

The Fund’s principal office is located at One Madison Avenue, New York, New York, 10010 and its telephone number is 1-800-293-1232.

 

The following provides information about the Fund’s outstanding shares as of [               ], 2012:

 

Title of Class

 

Amount Authorized

 

Amount Held by the 
Fund or for Its Account

 

Exclusive of Amount 
Held by the Fund or for 
Its Account

 

Common Stock

 

[                ]

 

[0]

 

[                ]

 

 

INVESTMENT OBJECTIVE

 

The Fund’s investment objective is current income consistent with the preservation of capital. The Fund’s investment portfolio will not be managed for capital appreciation.  The Fund’s investment objective is a fundamental policy and cannot be changed without the approval of the holders of a majority of the Fund’s outstanding voting securities.  As used herein, a “majority of the Fund’s outstanding voting securities” means the lesser of (a) 67% of the shares represented at a meeting at which more than 50% of the outstanding shares are represented or (b) more than 50% of the outstanding shares.  The Fund is not intended to be a complete investment program and there can be no assurance that the Fund will achieve its objectives.

 

INVESTMENT POLICIES

 

Under normal circumstances, the Fund invests at least 75% of its total assets in fixed income securities, such as bonds, convertible securities and preferred stocks.  The Fund’s investments in fixed income securities are not subject to any rating quality limitation.  The Fund primarily invests in high yield U.S. corporate fixed income securities that are in the lower rating categories of Moody’s, S&P or another nationally recognized ratings service.  Lower-rated securities generally provide yields superior to those of more highly-rated securities, but involve greater risks and are speculative in nature.  See “Risks and Special Considerations — Lower-Rated Securities.”  The Fund may also invest in securities rated single A or higher by Moody’s or S&P and unrated corporate fixed income securities.  For information on the rating categories of Moody’s and S&P, see the Appendix to the SAI.

 

Differing yields on fixed income securities of the same maturity are a function of several factors. Higher yields are generally available from securities in the lower rating categories of recognized rating agencies, i.e. , Baa or lower by Moody’s or BBB or lower by S&P.  Securities ratings are based largely on the issuer’s historical financial information and the rating agencies’ investment analysis at the time of rating. Consequently, the rating assigned to any particular security is not necessarily a reflection of the issuer’s current financial condition, which may be better

 

15



 

or worse than the rating would indicate. Although Credit Suisse considers security ratings when making investment decisions for high yield securities, it performs its own investment analysis and does not rely principally on the ratings assigned by the rating services. Credit Suisse’s analysis may include consideration of the issuer’s experience and managerial strength, changing financial condition, borrowing requirements or debt maturity schedules, and its responsiveness to changes in business conditions and interest rates. It also considers relative values based on anticipated cash flow, interest or dividend coverage, asset coverage and earnings prospects.

 

Credit Suisse bases its investment decisions in high yield securities on the results of issuer and security-specific credit analysis. Credit Suisse evaluates each issuer’s rating, cash flow, financial structure and business risk. Credit Suisse takes into account, among other things, the issuer’s financial resources, its sensitivity to economic conditions and trends, its operating history, the quality of the issuer’s management and regulatory matters. Credit Suisse evaluates the covenants of each security and pursues a strategy of broad issuer and industry diversification.

 

The Fund may also invest in debt securities issued or guaranteed by the U.S. government, or by agencies or instrumentalities established or sponsored by the U.S. government, including mortgage-backed securities.  Depending on market conditions, the Fund may invest a substantial portion of its assets in mortgage-backed securities.  Mortgage-backed securities are collateralized by mortgages or interests in mortgages and may be issued by government or non-government entities.  Mortgage-backed securities issued by government entities typically provide a monthly payment consisting of interest and principal payments, and additional payments will be made out of unscheduled payments of principal.  Non-government issued mortgage-backed securities may offer higher yields than those issued by government entities, but may be subject to greater price fluctuations.  To the extent that the Fund invests in the mortgage market, Credit Suisse will evaluate relevant economic, environmental and security-specific variables such as housing starts, coupon and age trends.

 

The Fund may invest in loans and loan participations (collectively, “Loans”), including senior secured floating Loans (“Senior Loans”), “second lien” secured floating rate Loans (“Second Lien Loans”), and other types of secured Loans with fixed and variable interest rates.

 

Credit Suisse may take full advantage of the entire range of maturities of fixed income securities and may adjust the average maturity of the investments held in the Fund’s portfolio from time to time, depending on its assessment of relative yields of securities of different maturities and its expectations of future changes in interest rates.  It is expected that the average weighted maturity of the Fund’s investment portfolio will be 5 to 10 years.

 

The Fund invests in debt obligations and other fixed income securities denominated in U.S. dollars, non-U.S. currencies or composite currencies, including:

 

·                   debt obligations issued or guaranteed by foreign national, provincial, state, municipal or other governments with taxing authority or by their agencies or instrumentalities;

 

·                   debt obligations of supranational entities;

 

·                   debt obligations of the U.S. government issued in non-dollar denominated securities; and

 

·                   dollar and non-dollar denominated debt obligations and other fixed income securities of foreign and U.S. corporate issuers.

 

The Fund may invest a portion of its assets in the securities of issuers located in emerging markets.  The Fund has a fundamental policy not to invest more than 5% of the value of its total assets in securities denominated in a currency other than the U.S. dollar.

 

In making investments in foreign and emerging market securities, Credit Suisse considers the relative growth and inflation rates of different countries. Credit Suisse considers expected changes in foreign currency exchange rates, including the prospects for central bank intervention, in determining the anticipated returns of securities denominated in foreign currencies. Credit Suisse further evaluates, among other things, foreign yield curves and regulatory and political factors, including the fiscal and monetary policies of such countries.

 

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In the past, during periods of falling U.S. exchange rates, yields available from securities denominated in foreign currencies have often been higher, in U.S. dollar terms, than those of securities denominated in U.S. dollars. Credit Suisse considers expected changes in foreign currency exchange rates in determining the anticipated returns of securities denominated in foreign currencies. The obligations of foreign governmental entities, including supranational issuers, have various kinds of government support. Obligations of foreign governmental entities include obligations issued or guaranteed by national, provincial, state or other governments with taxing power or by their agencies. These obligations may or may not be supported by the full faith and credit of a foreign government.

 

The Fund may invest in credit default swap agreements. The Fund may enter into credit default swap agreements either as a buyer or a seller. The Fund may buy a credit default swap to attempt to mitigate the risk of default or credit quality deterioration in one or more individual holdings or in a segment of the fixed income securities market. The Fund may sell a credit default swap in an attempt to gain exposure to an underlying issuer’s credit quality characteristics without investing directly in that issuer.  There is no limit on the Fund’s ability to enter into credit default swap agreements.

 

Other Investment Techniques

 

To enhance return as market opportunities arise, the Fund may use the following investment techniques.

 

Repurchase Agreements.  The Fund may invest in repurchase agreements collateralized by U.S. government securities, certificates of deposit and certain bankers’ acceptances for the purpose of realizing additional income.  In a repurchase agreement, the Fund buys, and the seller agrees to repurchase, a security at a mutually agreed upon time and price (usually within seven days). The repurchase agreement thereby determines the yield during the purchaser’s holding period, while the seller’s obligation to repurchase is secured by the value of the underlying security. Repurchase agreements could involve risks in the event of a default or insolvency of the other party to the agreement, including possible delays or restrictions upon the Fund’s ability to dispose of the underlying securities. The Fund may enter into repurchase agreements with certain banks or non-bank dealers.

 

Securities Lending.   The Fund may lend its portfolio securities to banks, brokers, dealers and other financial institutions who need to borrow securities in order to complete certain transactions, such as covering short sales, avoiding failures to deliver securities or completing arbitrage operations. By lending its portfolio securities, the Fund attempts to increase its income through the receipt of interest on the loan. Any gain or loss in the market price of the securities lent that might occur during the term of the loan would be for the account of the Fund. The Fund may lend its portfolio securities so long as the terms and the structure of such loans are not inconsistent with the 1940 Act or the rules and regulations or interpretations of the Securities and Exchange Commission (the “Commission”) thereunder. The Fund will not lend portfolio securities if, as a result, the aggregate of such loans exceeds 33 1/3% of the value of the Fund’s total assets. Loan arrangements made by the Fund will comply with all other applicable regulatory requirements, including the rules of the NYSE MKT. All relevant facts and circumstances, including the creditworthiness of the borrower, will be considered by Credit Suisse in making decisions with respect to the lending of securities, subject to review by the Fund’s Board of Directors (the “Board”). The creditworthiness of such bank, broker, dealer or other financial institution will be monitored by Credit Suisse during the time any securities are loaned. In addition, voting rights may pass with the loaned securities but if a material event were to occur affecting an investment on a loan, the loan must be called and the securities voted by the Fund.

 

Short Sales .  The Fund may engage in short sales (the sale of securities that it does not own), but only when it owns an equal amount of such securities or securities convertible into or exchangeable, without payment of any further consideration, for securities of the same issue as, and equal in amount to, the securities sold short (“short sales against the box”), and only if not more than 5% of the Fund’s net assets (taken at current value) is held as collateral for such sales at any one time.

 

Options on U.S. Government Securities .  The Fund may write covered call options (rights to purchase a security from the Fund) and put options (rights to sell a security to the Fund) with respect to its U.S. government securities to hedge against price fluctuations and to increase current income.  The Fund may also purchase put options (rights to sell a security to a third party) or call options (rights to purchase a security from a third party) on U.S. government securities to protect its portfolio against price fluctuations.

 

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Interest Rate Futures and Related Options .  The Fund may purchase and sell interest rate futures contracts and options thereon that are traded on U.S. futures exchanges or other trading facilities.  When the Fund attempts to hedge its portfolio by selling an interest rate futures contract, purchasing a put option thereon, or writing a call option thereon, it will own an amount of U.S. Government securities corresponding to the open futures or option position.  These transactions may be entered into for “bona fide hedging” purposes as defined in the Commodity Futures Trading Commission “CFTC”) regulations and other permissible purposes, including hedging against changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions and increasing return.  The Fund reserves the right to engage in transactions involving futures contracts and options on futures contracts in accordance with the Fund’s policies.  The Fund is operated by a person who has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act with respect to the Fund, and therefore, who is not subject to registration or regulation as a pool operator under the Commodity Exchange Act with respect to the Fund.

 

In contrast to the purchase or sale of a security, the full purchase price of the futures contract is not paid or received by the Fund upon its purchase or sale. Instead, the Fund will deposit in a segregated custodial account as initial margin an amount of cash or U.S. Treasury bills equal to approximately 5% of the value of the contract. At any time prior to expiration of the futures contract, the Fund may elect to terminate the position by taking an opposite position. A final determination of variation margin is then made, additional cash is required to be paid by or released to the Fund, and the Fund realizes a loss or gain. No assurance can be given that the Fund will be able to take an opposite position.

 

The selection of futures and options strategies requires skills different from those needed to select portfolio securities; however, Credit Suisse does have experience in the use of futures and options.

 

Restricted and Illiquid Securities .  The Fund may invest up to 10% of its total assets in securities that are not readily marketable. These include securities which are not registered under the Securities Act of 1933, as amended, and not publicly traded.

 

Foreign Currency Exchange Transactions.   The Fund may (but is not required to) engage in foreign currency exchange transactions to hedge against fluctuations in future exchange rates.

 

Defensive Strategies.   There may be times when, in Credit Suisse’s judgment, conditions in the securities markets would make pursuing the Fund’s basic investment strategy inconsistent with the best interests of its shareholders. At such times, Credit Suisse may employ alternative strategies to reduce fluctuations in the value of the portfolio. In implementing these defensive strategies, the Fund may temporarily shift its portfolio emphasis to higher rated securities, hedge currency risks, reduce or suspend its option writing activities or generally reduce the average maturity of its holdings. Under unusual market conditions, the Fund could invest for temporary defensive purposes up to 100% of its total assets in cash or money market instruments. Such money market instruments include short-term obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities, domestic, foreign and non-U.S. dollar denominated commercial paper, domestic and foreign certificates of deposit, domestic and foreign bankers’ acceptances and other bank obligations. The Fund may also hold a portion of its assets in cash or money market instruments for liquidity purposes. It is impossible to predict when, or for how long, such alternative strategies will be utilized. To the extent that the Fund employs these temporary defensive strategies, it may not achieve its investment objective.

 

Portfolio Turnover and Short-Term Trading. Credit Suisse will buy and sell securities for the Fund to accomplish its investment objective. The investment policies of the Fund may lead to frequent changes in investments, particularly in periods of rapidly fluctuating interest or currency exchange rates. Investments may also be traded to take advantage of perceived short-term disparities in market values or yields among securities of comparable quality and maturity. From time to time, consistent with its investment objective, the Fund may also trade securities for the purpose of seeking short-term profits to take advantage of short-term opportunities during periods of fluctuating markets. Securities may be sold in anticipation of a market decline or bought in anticipation of a market rise.

 

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Portfolio Securities

 

Lower-Rated Securities .  Lower-rated securities are securities rated below investment grade quality (lower than Baa by Moody’s or lower than BBB by S&P or comparably rated by another rating agency).  Such securities are considered to have speculative elements, with higher vulnerability to default than corporate securities with higher ratings.  See “Appendix — Description of Ratings” in the SAI for additional information concerning rating categories of Moody’s and S&P.

 

Lower-rated securities, though high yielding, are characterized by high risk.  See “Risks and Special Considerations — Lower-Rated Securities Risk.”

 

Bond prices generally are inversely related to interest rate changes; however, bond price volatility also is inversely related to coupon.  Accordingly, lower-rated securities may be relatively less sensitive to interest rate changes than higher quality securities of comparable maturity, because of their higher coupon.  This higher coupon is what the investor receives in return for bearing greater credit risk.  The higher credit risk associated with lower-rated securities potentially will have a greater effect on the value of such securities than may be the case with higher quality issues of comparable maturity, and will be a substantial factor in the Fund’s relative Share price volatility.

 

The ratings of Moody’s, S&P and the other rating agencies represent their opinions as to the quality of the obligations which they undertake to rate.  Ratings are relative and subjective and, although ratings may be useful in evaluating the safety of interest and principal payments, they do not evaluate the market value risk of such obligations.  Although these ratings may be an initial criterion for selection of portfolio investments, Credit Suisse also will evaluate these securities and the ability of the issuers of such securities to pay interest and principal.  To the extent that the Fund invests in lower-rated securities that have not been rated by a rating agency, the Fund’s ability to achieve its investment objectives will be more dependent on Credit Suisse’s credit analysis than would be the case when the Fund invests in rated securities.

 

Convertible Securities .  Convertible securities may be converted at either a stated price or stated rate into underlying shares of common stock.  Convertible securities have characteristics similar to both fixed income and equity securities.  Convertible securities generally are subordinated to other similar but non-convertible securities of the same issuer, although convertible bonds, as corporate debt obligations, enjoy seniority in right of payment to all equity securities, and convertible preferred stock is senior to shares of common stock of the same issuer.  Because of the subordination feature, however, convertible securities typically have lower ratings than similar non-convertible securities.

 

Although to a lesser extent than with fixed income securities, the market value of convertible securities tends to decline as interest rates increase and, conversely, tends to increase as interest rates decline.  In addition, because of the conversion feature, the market value of convertible securities tends to vary with fluctuations in the market value of the underlying common stock.  As the market price of the underlying common stock declines, convertible securities tend to trade increasingly on a yield basis, and so may not experience market value declines to the same extent as the underlying common stock.  When the market price of the underlying common stock increases, the prices of the convertible securities tend to rise as a reflection of the value of the underlying common stock.  While no securities investments are without risk, investments in convertible securities generally entail less risk than investments in common stock of the same issuer.

 

Convertible securities provide for a stable stream of income with generally higher yields than common stock and offer the potential for capital appreciation through the conversion feature, which enables the holder to benefit from increases in the market price of the underlying common stock.  In return, however, convertible securities generally offer lower interest or dividend yields than non-convertible securities of similar quality.

 

Preferred Stock.  Preferred stock represents a share of ownership in a company.  Generally, preferred stock has a specified dividend and ranks after bonds but before common stock on its claim on a company’s income for dividend payments and on a company’s assets should the company’s assets be liquidated.  While most preferred stocks pay a dividend, the Fund may purchase preferred stock where the issuer has failed to pay, or is in danger of failing to pay, the dividends on such preferred stock, or may purchase preferred stock that pays a dividend in kind.

 

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Mortgage-Backed Securities .  Mortgage-backed securities are collateralized by mortgages or interests in mortgages and may be issued by government or non-government entities.  Mortgage-backed securities issued by government entities typically provide a monthly payment consisting of interest and principal payments, and additional payments will be made out of unscheduled prepayments of principal.  Non-government issued mortgage-backed securities may offer higher yields than those issued by government entities, but may be subject to greater price fluctuations.

 

Senior Loans.  “Senior Loans” are loans and loan participations (collectively, “Loans”) that are senior secured floating rate Loans. Senior Loans are made to corporations and other non-governmental entities and issuers. Senior Loans typically hold the most senior position in the capital structure of the issuing entity, are typically secured with specific collateral and typically have a claim on the assets and/or stock of the borrower that is senior to that held by subordinated debt holders and stockholders of the borrower. The proceeds of Senior Loans primarily are used to finance leveraged buyouts, recapitalizations, mergers, acquisitions, stock repurchases, dividends, and, to a lesser extent, to finance internal growth and for other corporate purposes. Senior Loans typically have rates of interest that are determined daily, monthly, quarterly or semi-annually by reference to a base lending rate, plus a premium or credit spread. Base lending rates in common usage today are primarily the London-Interbank Offered Rate (“LIBOR”), and secondarily the prime rate offered by one or more major U.S. banks (the “Prime Rate”) and the certificate of deposit (“CD”) rate or other base lending rates used by commercial lenders.

 

Second Lien and Other Secured Loans.   “Second Lien Loans” are “second lien” secured floating rate Loans made by public and private corporations and other non-governmental entities and issuers for a variety of purposes. Second Lien Loans are second in right of payment to one or more Senior Loans of the related borrower. Second Lien Loans typically are secured by a second priority security interest or lien to or on specified collateral securing the borrower’s obligation under the Loan and typically have similar protections and rights as Senior Loans. Second Lien Loans are not (and by their terms cannot become) subordinated in right of payment to any obligation of the related borrower other than Senior Loans of such borrower. Second Lien Loans, like Senior Loans, typically have adjustable floating rate interest payments. Because Second Lien Loans are second to Senior Loans, they present a greater degree of investment risk but often pay interest at higher rates reflecting this additional risk.

 

The Fund may also invest in secured Loans other than Senior Loans and Second Lien Loans. Such secured Loans are made by public and private corporations and other non-governmental entities and issuers for a variety of purposes, and may rank lower in right of payment to one or more Senior Loans and Second Lien Loans of the borrower. Such secured Loans typically are secured by a lower priority security interest or lien to or on specified collateral securing the borrower’s obligation under the Loan, and typically have more subordinated protections and rights than Senior Loans and Second Lien Loans. Secured Loans may become subordinated in right of payment to more senior obligations of the borrower issued in the future. Such secured Loans may have fixed or adjustable floating rate interest payments. Because other secured Loans rank in payment order behind Senior Loans and Second Lien Loans, they present a greater degree of investment risk but often pay interest at higher rates reflecting this additional risk.

 

Second Lien Loans and other secured Loans generally are of below investment grade quality. Other than their subordinated status, Second Lien Loans and other secured Loans have many characteristics similar to Senior Loans discussed above. As in the case of Senior Loans, the Fund may purchase interests in Second Lien Loans and other secured Loans through assignments or participations.

 

Credit Default Swap Agreements The “buyer” in a credit default swap is obligated to pay the “seller” an upfront payment or a periodic stream of payments over the term of the agreement, provided that no credit event on an underlying reference obligation has occurred. If a credit event occurs, the seller must pay the buyer the full notional value, or “par value,” of the reference obligation in exchange for the reference obligation. As a result of counterparty risk, certain credit default swap agreements may involve greater risks than if the Fund had invested in the reference obligation directly.

 

If the Fund is a buyer and no credit event occurs, the cost to the Fund is the premium paid with respect to the agreement. If a credit event occurs, however, the Fund may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. On the other hand, the value of any deliverable obligations paid by the Fund to the seller, coupled with the up front

 

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or periodic payments previously received by the seller, may be less than the full notional value the seller pays to the Fund, resulting in a loss of value to the Fund.

 

If the Fund is a seller and no credit event occurs, the Fund would generally receive an up front payment or a fixed rate of income throughout the term of the swap, which typically is between six months and three years. If a credit event occurs, however, generally the Fund would have to pay the buyer the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. When the Fund acts as a seller of a credit default swap agreement it is exposed to speculative exposure risk since, if a credit event occurs, the Fund may be required to pay the buyer the full notional value of the contract net of any amounts owed by the buyer related to its delivery of deliverable obligations of the reference entity. As a result, the Fund bears the entire risk of loss due to a decline in value of a referenced security on a credit default swap it has sold if there is a credit event with respect to the security. The Fund bears the same risk as a buyer of fixed income securities directly. The Fund will sell a credit derivative only with respect to securities in which it would be authorized to invest.

 

Certain credit default swap agreements may not have liquidity beyond the counterparty to the agreement and may be considered illiquid. Other credit default swap agreements, however, may be considered liquid. Moreover, the Fund bears the risk of loss of the amount expected to be received under a credit default swap agreement in the event of the default or bankruptcy of the counterparty. The Fund will enter into swap agreements as a buyer only with counterparties that are deemed creditworthy by the adviser. Credit default swap agreements are generally valued at a price at which the counterparty to such agreement would terminate the agreement. As the seller of a credit default swap, the Fund would be subject to investment exposure on the notional amount of the swap. Accordingly, the Fund will segregate liquid investments in an amount equal to the aggregate market value of the credit default swaps of which it is the seller, marked to market on a daily basis.

 

When the Fund buys or sells a credit derivative, the underlying issuer(s) or obligor(s) to the transaction will be treated as an issuer for purposes of complying with the Fund’s issuer diversification and industry concentration policies, absent regulatory guidance to the contrary. The Fund may, but is not required to, use credit swaps or any other credit derivative. There is no assurance that credit derivatives will be available at any time or, if used, that the derivatives will be used successfully.

 

Repurchase Agreements .  In a repurchase agreement, the Fund buys, and the seller agrees to repurchase, a security at a mutually agreed upon time and price (usually within seven days).  The repurchase agreement thereby determines the yield during the purchaser’s holding period, while the seller’s obligation to repurchase is secured by the value of the underlying security.  Repurchase agreements could involve risks in the event of a default or insolvency of the other party to the agreement, including possible delays or restrictions upon the Fund’s ability to dispose of the underlying securities.  The Fund may enter into repurchase agreements with certain banks or non-bank dealers.

 

Money Market Instruments .  The Fund may invest in the following types of money market instruments:

 

Bank Obligations .  The Fund may purchase certificates of deposit, time deposits, bankers’ acceptances and other short-term obligations issued by domestic banks, foreign subsidiaries or foreign branches of domestic banks, domestic and foreign branches of foreign banks, domestic savings and loan associations and other banking institutions.  With respect to such securities issued by foreign subsidiaries or foreign branches of domestic banks, and domestic and foreign branches of foreign banks, the Fund may be subject to additional investment risks.

 

Certificates of deposit are negotiable certificates evidencing the obligation of a bank to repay funds deposited with it for a specified period of time.

 

Time deposits are non-negotiable deposits maintained in a banking institution for a specified period of time (in no event longer than seven days) at a stated interest rate.

 

Bankers’ acceptances are credit instruments evidencing the obligation of a bank to pay a draft drawn on it by a customer.  These instruments reflect the obligation both of the bank and the drawer to pay the face

 

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amount of the instrument upon maturity.  The other short-term obligations may include uninsured, direct obligations bearing fixed, floating or variable interest rates.

 

Commercial Paper .  Commercial paper consists of short-term, unsecured promissory notes issued to finance short-term credit needs.  The commercial paper purchased by the Fund will consist only of direct obligations which, at the time of their purchase, are (a) rated not lower than Prime-1 by Moody’s or A-1 by S&P, (b) issued by companies having an outstanding unsecured debt issue currently rated at least A3 by Moody’s or A- by S&P, or (c) if unrated, determined by Credit Suisse to be of comparable quality to those rated obligations which may be purchased by the Fund.

 

Other Short-Term Corporate Obligations .  These instruments include variable amount master demand notes, which are obligations that permit the Fund to invest fluctuating amounts at varying rates of interest pursuant to direct arrangements between the Fund, as lender, and the borrower.  These notes permit daily changes in the amounts borrowed.  Because these obligations are direct lending arrangements between the lender and borrower, it is not contemplated that such instruments generally will be traded, and there generally is no established secondary market for these obligations, although they are redeemable at face value, plus accrued interest, at any time.  Accordingly, where these obligations are not secured by letters of credit or other credit support arrangements, the Fund’s right to redeem is dependent on the ability of the borrower to pay principal and interest on demand.  Such obligations frequently are not rated by credit rating agencies, and the Fund may invest in them only if at the time of an investment Credit Suisse determines that such investment is of comparable quality to those rated obligations which may be purchased by the Fund.

 

INVESTMENT RESTRICTIONS

 

In addition to its investment objective, the Fund has adopted investment restrictions numbered 1 through 15 as fundamental policies, which cannot be changed without approval by the holders of a majority (as defined in the 1940 Act) of the Fund’s outstanding voting shares.  Unless expressly designated as fundamental, all other policies of the Fund may be changed by the Board without shareholder approval.  The percentage restrictions set forth below, as well as those contained elsewhere in this prospectus, apply at the time a transaction is effected, and a subsequent change in a percentage resulting from market fluctuations or any other cause other than an action by the Fund will not require the Fund to dispose of portfolio securities or take other action to satisfy the percentage restriction.  The Fund may not:

 

1.      Invest more than 5% of the value of its assets in the securities of any one issuer, excluding obligations of the U.S. government or any agency or instrumentality thereof, except that up to 25% of the value of its total assets may be invested without regard to this limitation.

 

2.     Own more than 10% of the outstanding voting stock or other securities (other than securities of the U.S. government or any agency or instrumentality thereof), or both, of any one issuer.

 

3.      Purchase shares of other investment companies except as part of a plan of reorganization, merger, consolidation or an offer of exchange.

 

4.      Borrow money except as a temporary measure for extraordinary or emergency purposes, and in no event in excess of 15% of the value of its total assets, except that for the purpose of this restriction, short-term credits necessary for settlement of securities transactions are not considered borrowings (the Fund will not purchase any securities at any time while such borrowings exceed 5% of total assets).

 

5.      Purchase securities on margin, except that it may make margin payments in connection with transactions in future contracts and related options.

 

6.      Sell securities short unless at all times when a short position is open it owns an equal amount of such securities or securities convertible into or exchangeable, for, without payment of any further consideration, securities of the same issue as, and equal in amount to, the securities sold short, and unless not more than 5% of the value of the Fund’s net assets are held as collateral for such sales at any one time.

 

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7.      Purchase or sell commodities or commodity contracts, except that it may write, purchase or sell financial futures contracts and related options, and futures, forward contracts and options on foreign currencies.

 

8.      Invest for the purpose of exercising control over management of any company.

 

9.      Make loans, except (i) by purchasing bonds, debentures or similar obligations (including repurchase agreements, subject to the limitation described in 11 below), which are either publicly distributed or customarily purchased by institutional investors, and (ii) by lending its securities to banks, brokers, dealers and other financial institutions so long as such loans are not inconsistent with the 1940 Act or the rules and regulations or interpretations of the Securities and Exchange Commission thereunder.

 

10.    Underwrite the securities of other issuers, except to the extent that in connection with the disposition of portfolio securities the Fund may be deemed to be an underwriter.

 

11.    Invest more than 10% of the value of its total assets in securities subject to legal or contractual restrictions on resale or in securities which are not readily marketable, including repurchase agreements having maturities of more than 7 days and restricted and illiquid securities.

 

12.    Purchase real estate, although the Fund may purchase or sell securities of companies which deal in real estate or interests therein.

 

13.    Invest directly in interests in oil, gas or other mineral exploration development programs.

 

14.    Invest in the aggregate more than 5% of the value of its total assets in securities denominated in a currency other than the United States dollar.

 

15.    Invest in non-dividend paying equity securities if after such investment, total non-dividend paying equity securities would comprise more than 15% of the Fund’s total assets.

 

RISKS AND SPECIAL CONSIDERATIONS

 

An investment in the Shares of the Fund involves a high degree of risk.  You should carefully consider the following risk factors in addition to the other information set forth in this Prospectus.  For additional information about the risks that may be associated with an investment in the Fund, see “Other Investment Practices” in the SAI.

 

Investment and Market Risk

 

An investment in Shares is subject to investment risk, including the possible loss of the entire principal amount that you invest.  Your investment in Shares represents an indirect investment in the securities owned by the Fund.  The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably.  If the current global economic downturn continues into a prolonged recession or deteriorates further, the ability of issuers of the corporate fixed income securities and other securities in which the Fund invests to service their obligations could be materially and adversely affected.  The value of the securities in which the Fund invests will affect the value of the Shares.  Your Shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of Fund dividends and distributions.

 

Lower-Rated Securities Risk

 

Lower-rated securities are regarded as being predominantly speculative as to the issuer’s ability to make payments of principal and interest.  Investment in such securities involves substantial risk.  Lower-rated securities are commonly referred to as “junk bonds.”  Issuers of lower-rated securities 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 lower-rated securities 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’s ability to service its debt obligations also may be adversely affected by specific issuer developments, the issuer’s inability to

 

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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 default rate relative to the rates currently existing in the market for lower-rated securities.  The risk of loss due to default by the issuer is significantly greater for the holders of lower-rated securities because such securities may be unsecured and may be subordinate to other creditors of the issuer.  The lower-rated securities in which the Fund 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 Fund purchases a particular security, in which case the Fund may experience losses and incur costs.

 

Lower-rated securities frequently have call or redemption features that would permit an issuer to repurchase the security from the Fund.  If a call were exercised by the issuer during a period of declining interest rates, the Fund is likely to have to replace such called security with a lower yielding security, thus decreasing the net investment income to the Fund and dividends to shareholders.

 

Lower-rated securities have been in the past, and may again in the future be, more volatile than higher-rated fixed income securities, so that adverse economic events may have a greater impact on the prices of lower-rated securities than on higher-rated fixed income securities.  Factors adversely affecting the market value of such securities are likely to affect adversely the Fund’s net asset value.  Recently, demand for lower-rated securities has increased significantly and the difference between the yields paid by lower-rated securities and investment grade bonds (i.e., the “spread”) has narrowed.  To the extent this differential increases, the value of lower-rated securities in the Fund’s portfolio could be adversely affected.

 

Like higher-rated fixed income securities, lower-rated securities 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 lower-rated securities market, which market may be less liquid than the market for higher-rated fixed income securities, even under normal economic conditions.  Also, there may be significant disparities in the prices quoted for lower-rated securities by various dealers.  As a result, during periods of high demand in the lower-rated securities market, it may be difficult to acquire lower-rated securities appropriate for investment by the Fund.  Adverse economic conditions and investor perceptions thereof (whether or not based on economic reality) may impair liquidity in the lower-rated securities market and may cause the prices the Fund receives for its lower-rated securities to be reduced.  In addition, the Fund may experience difficulty in liquidating a portion of its portfolio when necessary to meet the Fund’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 the Fund’s portfolio instruments than in the case of instruments trading in a more liquid market.  In addition, the 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.

 

Credit Rating Agency Risk .  Credit ratings are determined by credit rating agencies such as S&P and Moody’s.  Any shortcomings or inefficiencies in credit rating agencies’ processes for determining credit ratings may adversely affect the credit ratings of securities held by the Fund and, as a result, may adversely affect those securities’ perceived or actual credit risk.

 

Credit Risk

 

Credit risk is the risk that one or more of the Fund’s investments in debt securities or other instruments will decline in price, or fail to pay interest, liquidation value or principal when due, because the issuer of the obligation or the issuer of a reference security experiences an actual or perceived decline in its financial status.  In addition to the credit risks associated with high yield securities, the Fund could also lose money if the issuer of other debt obligations, or the counterparty to a derivatives contract, repurchase agreement, loan of portfolio securities or other obligation, is, or is perceived to be, unable or unwilling to make timely principal and/or interest payments, or to otherwise honor its obligations.  The downgrade of a security may further decrease its value.

 

Interest Rate Risk

 

Generally, when market interest rates rise, the prices of debt obligations fall, and vice versa.  Interest rate risk is the risk that debt obligations and other instruments in the Fund’s portfolio will decline in value because of

 

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increases in market interest rates.  This risk may be particularly acute because market interest rates are currently at historically low levels.  The prices of long-term debt obligations generally fluctuate more than prices of short-term debt obligations as interest rates change.  During periods of rising interest rates, the average life of certain types of securities may be extended due to slower than expected payments.  This may lock in a below market yield, increase the security’s duration and reduce the security’s value.

 

Corporate Debt Risk

 

The Fund may invest in debt securities of non-governmental issuers. Like all debt securities, corporate debt securities generally represent an issuer’s obligation to repay to the investor (or lender) the amount borrowed plus interest over a specified time period. A typical corporate bond specifies a fixed date when the amount borrowed (principal) is due in full, known as the maturity date, and specifies dates when periodic interest (coupon) payments will be made over the life of the security.

 

Prices of corporate debt securities fluctuate and, in particular, are subject to several key risks including, but not limited to, interest rate risk, credit risk and prepayment risk. The market value of a corporate bond may be affected by the credit rating of the corporation, the corporation’s performance and perceptions of the corporation in the market place. There is a risk that the issuers of the corporate debt securities in which the Fund may invest may not be able to meet their obligations on interest or principal payments at the time called for by an instrument.

 

Foreign Securities Risk

 

Investing in securities of foreign entities and securities denominated in foreign currencies involves certain risks not involved in domestic investments, including, but not limited to, fluctuations in foreign exchange rates, future foreign political and economic developments, different legal and accounting systems and the possible imposition of exchange controls or other foreign governmental laws or restrictions.  Securities prices in different countries are subject to different economic, financial, political and social factors.

 

Foreign securities markets generally are not as developed or efficient as those in the United States.  Securities of some foreign issuers are less liquid and more volatile than securities of comparable U.S. issuers.  Similarly, volume and liquidity in most foreign securities markets are less than in the United States and, at times, volatility of price can be greater than in the United States.

 

Because evidences of ownership of such securities usually are held outside the United States, the Fund will be subject to additional risks which include possible adverse political and economic developments, seizure or nationalization of foreign deposits and adoption of governmental restrictions which might adversely affect or restrict the payment of principal and interest on the foreign securities to investors located outside the country of the issuer, whether from currency blockage or otherwise.

 

Since the Fund may invest in securities denominated or quoted in currencies other than the U.S. dollar, changes in foreign currency exchange rates may affect the value of securities in the Fund and the unrealized appreciation or depreciation of investments.  Currencies of certain countries may be volatile and therefore may affect the value of securities denominated in such currencies.  The Fund may, but is not obligated to, engage in certain transactions to hedge the currency-related risks of investing in non-U.S. dollar denominated securities.  In addition, with respect to certain foreign countries, there is the possibility of expropriation of assets, confiscatory taxation, difficulty in obtaining or enforcing a court judgment, economic, political or social instability or diplomatic developments that could affect investments in those countries.  Moreover, individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, capital reinvestment, resources, self-sufficiency and balance of payments position.  Certain foreign investments also may be subject to foreign withholding taxes.  These risks often are heightened for investments in smaller, emerging capital markets.

 

As a result of these potential risks, Credit Suisse may determine that, notwithstanding otherwise favorable investment criteria, it may not be practicable or appropriate to invest in a particular country.  The Fund may invest in countries in which foreign investors, including Credit Suisse, have had no or limited prior experience.

 

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Emerging Market Securities Risk

 

Investing in the securities of issuers located in emerging markets involves special considerations not typically associated with investing in the securities of U.S. issuers and other developed market issuers, including heightened risks of expropriation and/or nationalization, armed conflict, confiscatory taxation, restrictions on transfers of assets, lack of uniform accounting and auditing standards, difficulties in dividend withholding reclaims procedures, less publicly available financial and other information and potential difficulties in enforcing contractual obligations.

 

The economies of individual emerging market countries may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross domestic product, rate of inflation, currency depreciation, capital reinvestment, resource self-sufficiency and balance of payments position. Governments of many developing and emerging market countries have exercised and continue to exercise substantial influence over many aspects of the private sector. In some cases, the government owns or controls many companies, including some of the largest in the country.

 

Accordingly, government actions could have a significant effect on economic conditions in an emerging market country and on market conditions, prices and yields of securities in the Fund’s portfolio. Moreover, the economies of emerging market countries generally are heavily dependent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade.

 

Illiquid Securities Risk

 

The Fund may invest in securities for which no readily available market exists or are otherwise considered illiquid.  The Fund may not be able readily to dispose of such securities at prices that approximate those at which the Fund could sell such securities if they were more widely traded and, as a result of such illiquidity, the Fund may have to sell other investments or engage in borrowing transactions if necessary to raise cash to meet its obligations.

 

Prepayment Risk

 

If interest rates fall, the principal on bonds and loans held by the Fund may be paid earlier than expected.  If this happens, the proceeds from a prepaid security may be reinvested by the Fund in securities bearing lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders.

 

Preferred Stock Risk

 

Preferred stocks are unique securities that combine some of the characteristics of both common stocks and bonds.  Preferred stocks generally pay a fixed rate of return and are sold on the basis of current yield, like bonds.  However, because they are equity securities, preferred stocks provide equity ownership of a company, and the income is paid in the form of dividends.  Preferred stocks typically have a yield advantage over common stocks as well as comparably-rated fixed income investments.  Preferred stocks are typically subordinated to bonds and other debt instruments in a company’s capital structure, in terms of priority to corporate income, and therefore will be subject to greater credit risk than those debt instruments.  Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors.  Preferred stock also may be subject to optional or mandatory redemption provisions.

 

Mortgage-Backed Securities Risk

 

The Fund may invest a substantial portion of its total assets in mortgage-backed securities.  The value of mortgage-backed securities is subject to change due to shifts in the market’s perception of issuers, and regulatory or tax changes may adversely affect the mortgage securities market as a whole.  Foreclosures and prepayments, which occur when unscheduled or early payments are made on the underlying mortgages, may shorten the effective maturities on these securities.  Like other debt securities, the values of mortgage-backed securities will generally

 

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fluctuate in response to changes in interest rates.  No assurance can be given as to the liquidity of the market for mortgage-backed securities.

 

The yield characteristics of mortgage-backed securities differ from traditional debt securities.  Among the major differences are that interest and principal payments are made more frequently than that principal may be prepaid at any time because the underlying mortgage loans generally may be prepaid at any time.  As a result, if the Fund purchases a security at a premium, a prepayment rate that is faster than expected will reduce yield to maturity, while a prepayment rate that is slower than expected will have the opposite effect of increasing yield to maturity.  Conversely, if the Fund purchases the securities at a discount, faster than expected prepayments will increase, while slower than expected prepayments will reduce, yield to maturity.  Certain types of derivative mortgage-backed securities are designed to be highly sensitive to changes in prepayment and interest rates can subject the holders thereof to extreme reduction of yield and possibly loss of principal.  Prepayments on a pool of mortgage loans are influenced by a variety of economic, geographical, social and other factors.  Generally, however, prepayments on fixed mortgage loans will increase during a period of falling interest rates and decrease during a period of rising interest rates.  Accordingly, amounts available for reinvestment by the Fund are likely to be greater during periods of declining interest rates and, as a result, likely to be reinvested at lower interest rates.  Adjustable rate mortgages are subject to prepayment risk in a manner similar to fixed rate mortgages although to a lesser degree.

 

Senior Loans Risk

 

The risks associated with Senior Loans of below investment grade quality are similar to the risks of bonds rated below investment grade. Senior Loans, however, are typically senior and secured in contrast to bonds rated below investment grade, which are generally subordinated and unsecured. Senior Loans’ higher standing has historically resulted in generally higher recoveries in the event of a corporate reorganization. In addition, because their interest payments are adjusted for changes in short-term interest rates, investments in Senior Loans generally have less interest rate risk than below-investment-grade rated bonds. The Fund’s investments in Senior Loans are expected to typically be below investment grade. These investments are considered speculative because of the credit risk of their issuers. Such companies are more likely to default on their payments of interest and principal owed to the Fund, and such defaults could reduce the Fund’s net asset value and income distributions. An economic downturn generally leads to a higher non-payment rate, and a debt obligation may lose significant value before a default occurs. Moreover, any specific collateral used to secure a Loan may decline in value or become illiquid, which would adversely affect the Loan’s value.

 

Like other debt instruments, Senior Loans are subject to the risk of non-payment of scheduled interest or principal. Such non-payment would result in a reduction of income to the Fund, a reduction in the value of the investment and a potential decrease in the net asset value per share of the Fund. There can be no assurance that the liquidation of any collateral securing a Loan would satisfy the borrower’s obligation in the event of non-payment of scheduled interest or principal payments, or that such collateral could be readily liquidated. In the event of bankruptcy of a borrower, the Fund could experience delays or limitations with respect to its ability to realize the benefits of the collateral securing a Senior Loan. The collateral securing a Senior Loan may lose all or substantially all of its value in the event of bankruptcy of a borrower. Some Senior Loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate such Senior Loans to presently existing or future indebtedness of the borrower or take other action detrimental to the holders of Senior Loans including, in certain circumstances, invalidating such Senior Loans or causing interest previously paid to be refunded to the borrower. If interest were required to be refunded, it could negatively affect the Fund’s performance.

 

The Fund may purchase and retain in its portfolio Senior Loans where the borrowers have experienced, or may be perceived to be likely to experience, credit problems, including default, involvement in or recent emergence from bankruptcy reorganization proceedings or other forms of debt restructuring. At times, in connection with the restructuring of a Senior Loan either outside of bankruptcy court or in the context of bankruptcy court proceedings, the Fund may determine or be required to accept equity securities or junior debt securities in exchange for all or a portion of a Senior Loan.

 

Senior Loans in which the Fund will invest may not be rated by a nationally recognized statistical ratings organization (“NRSRO”), may not be registered with the SEC or any state securities commission, and may not be listed on any national securities exchange. The amount of public information available with respect to Senior Loans

 

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may be less extensive than that available for registered or exchange-listed securities. In evaluating the creditworthiness of borrowers, Credit Suisse will consider, and may rely in part, on analyses performed by others.

 

Borrowers may have outstanding debt obligations that are rated below investment grade by a NRSRO. Most of the Senior Loans held by the Fund will have been assigned ratings below investment grade by a NRSRO. In the event Senior Loans are not rated, they are likely to be the equivalent of below investment grade quality. The Fund will rely on the judgment, analysis and experience of Credit Suisse in evaluating the creditworthiness of a borrower. In this evaluation, Credit Suisse will take into consideration, among other things, the borrower’s financial resources, its sensitivity to economic conditions and trends, its operating history, the quality of the borrower’s management and regulatory matters.

 

No active trading market may exist for some Senior Loans and some Senior Loans may be subject to restrictions on resale. Secondary markets may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods, which may impair the ability to realize full value and thus cause a decline in the Fund’s net asset value. During periods of limited demand and liquidity for Senior Loans, the Fund’s net asset value may be adversely affected.

 

Although changes in prevailing interest rates can be expected to cause some fluctuations in the value of Senior Loans (due to the fact that floating rates on Senior Loans only reset periodically), the value of Senior Loans tends to be substantially less sensitive to changes in market interest rates than fixed-rate instruments. Nevertheless, a sudden and significant increase in market interest rates may cause a decline in the value of these investments and an associated decline in the Fund’s net asset value.

 

Other factors (including, but not limited to, rating downgrades, credit deterioration, a large downward movement in stock prices, a disparity in supply and demand of certain investments or market conditions that reduce liquidity) can reduce the value of Senior Loans and other debt obligations, impairing the Fund’s net asset value.

 

The Fund may purchase Senior Loans by assignment from a participant in the original syndicate of lenders or from subsequent assignees of such interests, or can buy a participation in a loan. The Fund may also purchase participations in the original syndicate making Senior Loans. Loan participations typically represent indirect participations in a loan to a corporate borrower, and generally are offered by banks or other financial institutions or lending syndicates. When purchasing loan participations, the Fund assumes the credit risk associated with the corporate borrower and may assume the credit risk associated with an interposed bank or other financial intermediary. The Fund will acquire participations only if the lender interpositioned between the Fund and the borrower is determined by Credit Suisse to be creditworthy.

 

Credit Suisse will seek to use an independent pricing service approved by the Board to value most Senior Loans held. Credit Suisse may use the fair value method to value Senior Loans if market quotations for them are not readily available or are deemed unreliable, or if events occurring after the close of a securities market and before the Fund values its assets would materially affect net asset value.

 

Economic and other events (whether real or perceived) can reduce the demand for certain Senior Loans or Senior Loans generally, which may reduce market prices and cause the Fund’s net asset value per share to fall. The frequency and magnitude of such changes cannot be predicted.

 

Loans and other debt instruments are also subject to the risk of price declines due to increases in prevailing interest rates, although floating-rate debt instruments are less exposed to this risk than fixed-rate debt instruments. Interest rate changes may also increase prepayments of debt obligations and require the Fund to invest assets at lower yields. No active trading market may exist for certain Loans, which may impair the ability of the Fund to realize full value in the event of the need to liquidate such assets.

 

Adverse market conditions may impair the liquidity of some actively traded Loans.

 

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Second Lien and Other Secured Loans Risk

 

Second Lien Loans and other secured Loans are subject to the same risks associated with investment in Senior Loans and bonds rated below investment grade. However, because Second Lien Loans are second in right of payment to one or more Senior Loans of the related borrower, and other secured Loans rank lower in right of payment to Second Lien Loans, they are subject to the additional risk that the cash flow of the borrower and any property securing the Loan may be insufficient to meet scheduled payments after giving effect to the more senior secured obligations of the borrower. This risk is generally higher for subordinated unsecured loans or debt, which are not backed by a security interest in any specific collateral. Second Lien Loans and other secured Loans are also expected to have greater price volatility than Senior Loans and may be less liquid. There is also a possibility that originators will not be able to sell participations in Second Lien Loans and other secured Loans, which would create greater credit risk exposure.

 

Conflict of Interest Risk

 

Affiliates of Credit Suisse may act as underwriter, lead agent or administrative agent for loans and participate in the secondary market for loans.  Because of limitations imposed by applicable law, the presence of Credit Suisse’s affiliates in the primary and secondary markets for loans may restrict the fund’s ability to acquire some loans or affect the timing or price of such acquisitions.

 

Derivatives Risk

 

The Fund may invest in derivatives, such as credit default swap agreements and interest rate futures and related options. The primary risk of derivatives is the same as the risk of the underlying asset, namely that the value of the underlying asset may increase or decrease. Adverse movements in the value of the underlying asset can expose the Fund to losses. In addition, risks in the use of derivatives include:

 

·                   an imperfect correlation between the price of derivatives and the movement of the securities prices, interest rates or currency exchange rates being hedged or replicated;

·                   the possible absence of a liquid secondary market for any particular derivative at any time;

·                   the potential loss if the counterparty to the transaction does not perform as promised;

·                   the possible need to defer closing out certain positions to avoid adverse tax consequences, as well as the possibility that derivative transactions may result in acceleration of gain, deferral of losses or a change in the character of gain realized;

·                   the risk that the financial intermediary “manufacturing” the over-the-counter derivative, being the most active market maker and offering the best price for repurchase, will not continue to create a credible market in the derivative;

·                   because certain derivatives are “manufactured” by financial institutions, the risk that the Fund may develop a substantial exposure to financial institution counterparties; and

·                   the risk that a full and complete appreciation of the complexity of derivatives and how future value is affected by various factors including changing interest rates, exchange rates and credit quality is not attained.

 

There is no guarantee that derivatives will provide successful results and any success in their use depends on a variety of factors including the ability of the Investment Adviser to predict correctly the direction of interest rates, securities prices, currency exchange rates and other factors.

 

Counterparty Risk

 

The Fund will be subject to credit risk with respect to the counterparties to the derivative contracts purchased or sold by the Fund.  Recently, several broker-dealers and other financial institutions have experienced extreme financial difficulty, sometimes resulting in bankruptcy of the institution.  Although the Investment Adviser monitors the creditworthiness of the Fund’s counterparties, there can be no assurance that the Fund’s counterparties will not experience similar difficulties, possibly resulting in losses to the Fund.  If a counterparty becomes bankrupt, or otherwise fails to perform its obligations under a derivative contract due to financial difficulties, the Fund may experience significant delays in obtaining any recovery under the derivative contract in a bankruptcy or other

 

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reorganization proceeding.  The Fund may obtain only a limited recovery or may obtain no recovery in such circumstances.

 

Repurchase Agreements Risk

 

Repurchase agreements could involve certain risks in the event of default or insolvency of the seller, including losses and possible delays or restrictions upon the fund’s ability to dispose of the underlying securities. To the extent that, in the meantime, the value of the securities that the fund has purchased has decreased, the fund could experience a loss. The fund will be exposed to the credit of the counterparties to repurchase agreements and their ability to satisfy the terms of the agreements, which exposes the fund to the risk that the counterparties may default on their obligations to perform under the agreements.  For more information, please see “Counterparty Risk” above and “U.S. Government Securities Risk” below.

 

Securities Lending Risk

 

In connection with its loans of portfolio securities, the Fund may be exposed to the risk of delay in recovery of the loaned securities or possible loss of rights in the collateral should the borrower become insolvent. The Fund also bears the risk of loss on the investment of cash collateral. There is also the risk that, in the event of default by the borrower, the collateral might not be sufficient to cover any losses incurred by the Fund. There can be no assurance that the return to the Fund from a particular loan, or from its loans overall, will exceed the related costs and any related losses.

 

Short Sale Risk

 

The Fund may sell securities short. Short sales involve the risk that the Fund will incur a loss by subsequently being required to buy a security at a higher price than the price at which the Fund previously sold the security short. Because the Fund’s loss on a short sale stems from increases in the value of the security sold short, the extent of such loss, like the price of the security sold short, is theoretically unlimited. The use of short sales is in effect a form of leveraging the Fund’s portfolio that could increase the Fund’s exposure to the market, magnify losses and increase the volatility of returns. The Fund may not always be able to close out a short position at a particular time or at a favorable price.

 

Interest Rate Futures and Related Options Risk

 

The Fund may purchase and sell interest rate futures contracts and options thereon that are traded on U.S. futures exchanges or other trading facilities.  These transactions may be entered into for “bona fide hedging” purposes as defined in CFTC regulations and other permissible purposes, including hedging against changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions and increasing return.  There are several risks in connection with the use of interest rate futures contracts as a hedge for transactions and anticipated transactions, including the risk of unlimited loss and significant distortions between the prices of futures contracts and those of the securities being hedged. Although the Fund intends to purchase or sell interest rate futures contracts only on exchanges or boards of trade where there appears to be an active market for such contracts, there is no assurance that a liquid market on an exchange or board of trade will exist for any particular contract or at any particular time. The Fund is not required to hedge interest rate risk. In addition, there are special risks relating to options on interest rate futures contracts. The ability to establish and close out positions on such options is subject to the maintenance of a liquid secondary market. The Fund will only purchase or write options on futures contracts which, in the opinion of Credit Suisse, are traded in sufficiently developed markets such that the risks of illiquidity in connection with such options are not greater than the risks of illiquidity in connection with transactions in the underlying interest rate futures contracts.

 

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Valuation Risk

 

Unlike publicly traded common stock which trades on national exchanges, there is no central place or exchange for bond trading.  Bonds generally trade on an “over-the-counter” market which may be anywhere in the world where buyer and seller can settle on a price.  Due to the lack of centralized information and trading, the valuation of bonds may carry more risk than that of common stock.  Uncertainties in the conditions of the financial market, unreliable reference data, lack of transparency and inconsistency of valuation models and processes may lead to inaccurate asset pricing.  As a result, the Fund may be subject to the risk that when a security is sold in the market, the amount received by the Fund is less than the value of such security carried on the Fund’s books.

 

Market Price, Discount and Net Asset Value of Shares

 

As with any stock, the price of the Fund’s Shares fluctuates with market conditions and other factors.  Shares of closed-end investment companies frequently trade at a discount from their net asset values.  This characteristic is a risk separate and distinct from the risk that the Fund’s net asset value could decrease as a result of its investment activities and may be greater for investors expecting to sell their Shares in a relatively short period of time following completion of an offering.  The net asset value of the Shares will be reduced immediately following an offering as a result of the payment of certain offering costs.  Although the value of the Fund’s net assets is generally considered by market participants in determining whether to purchase or sell Shares, whether investors will realize gains or losses upon the sale of the Shares will depend entirely upon whether the market price of the Shares at the time of sale is above or below the investor’s purchase price for the Shares.  Because the market price of the Shares will be determined by factors such as net asset value, dividend and distribution levels and their stability (which will in turn be affected by levels of dividend and interest payments by the Fund’s portfolio holdings, the timing and success of the Fund’s investment strategies, regulations affecting the timing and character of Fund distributions, Fund expenses and other factors), supply of and demand for the Shares, trading volume of the Shares, general market, interest rate and economic conditions and other factors beyond the control of the Fund, the Fund cannot predict whether the Shares will trade at, below or above net asset value.

 

Potential Yield Reduction

 

An offering of Shares is expected to present the opportunity to invest in high yielding securities. This expectation is based on the current market environment for high yield debt securities, which could change in response to interest rate levels, general economic conditions, specific industry conditions and other factors. If the market environment for high yield debt securities changes in a manner that adversely affects the yield of such securities, the offering of Shares could cause the Fund to invest in securities that are lower yielding than those in which it is currently invested. In addition, even if the market for high yield debt securities continues to present attractive investment opportunities, there is no assurance that the Fund will be able to invest the proceeds of an offering of Shares in high yielding securities or that other potential benefits of the offering will be realized. An offering of Shares could reduce the Fund’s current dividend yield if the Fund is unable to invest the proceeds of the offering in securities that provide a yield at least equal to the current dividend yield.

 

Anti-Takeover Provisions

 

Certain provisions of the Charter and By-laws of the Fund may have the effect of anti-takeover measures.  The By-laws provide that the Board of Directors shall be divided into three staggered classes, each having a three-year term, so that only one class of directors is elected each year.  Removal of any director may occur only by a two-thirds stockholder vote and only for cause.  The Charter gives the Board of Directors sole authority over By-law amendments.  Meetings of stockholders are called by the Board.  Stockholders wishing to call a special meeting may do so only upon the written request of holders of a majority of the outstanding shares.

 

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MANAGEMENT OF THE FUND

 

Board of Directors

 

The business and affairs of the Fund are managed by or under the direction of the Board of Directors of the Fund.  Background information regarding the Directors and officers of the Fund is contained in the SAI under “Directors and Officers.”

 

Investment Adviser

 

Credit Suisse serves as the Fund’s investment adviser with respect to all investments and makes all investment decisions for the Fund.  Credit Suisse is part of the asset management business of Credit Suisse Group AG, one of the world’s leading banks.  Credit Suisse Group AG provides its clients with investment banking, private banking and asset management services worldwide.  The asset management business of Credit Suisse Group AG is comprised of a number of legal entities around the world that are subject to distinct regulatory requirements.  Credit Suisse’s address is One Madison Avenue, New York, New York 10010.  As of June 30, 2012, Credit Suisse managed over $56.9 billion in the U.S. and, together with its global affiliates, managed assets of over $380.9 billion in 19 countries.

 

Advisory Agreement

 

Under the Fund’s Investment Advisory Agreement with Credit Suisse, Credit Suisse receives as compensation for its advisory services from the Fund an annual fee, computed weekly and payable quarterly as follows: 0.50% of the lower of the weekly stock price (market value) of the Fund’s outstanding shares or its average weekly net assets.

 

Potential Conflicts of Interest .  Because the Investment Adviser receives a fee based on assets, it will benefit from the increase in assets that will result from offerings of Shares.  It is not possible to state precisely the amount of additional compensation that the Investment Adviser might receive as a result of the offerings because it is not known how many Shares will be sold and because the proceeds of offerings will be invested in additional portfolio securities, which will fluctuate in value.

 

A discussion regarding the basis for the Board’s approval of the Investment Advisory Agreement is available in the Fund’s 2011 Annual Report to shareholders.

 

Administrator

 

State Street serves as the Fund’s administrator.  The Fund pays State Street, for administrative services, a fee, exclusive of out-of-pocket expenses, calculated in total for all the funds advised by Credit Suisse that are administered or co-administered by State Street and allocated based upon the relative average net assets of each fund, subject to an annual minimum fee.

 

Portfolio Management

 

The Credit Suisse US High Yield Management Team is responsible for the day-to-day portfolio management of the Fund.  The current team members are Thomas J. Flannery and Wing Chan.  Thomas J. Flannery and Wing Chan are the portfolio managers of the team sharing in the day-to-day responsibilities of portfolio management, including overall industry, credit, duration, yield curve positioning and security selection and industry and issuer allocations.

 

Thomas J. Flannery, a Managing Director of Credit Suisse, is the Head of the US High Yield Management Team.  Mr. Flannery joined Credit Suisse in June 2010.  He is a portfolio manager for the Performing Credit Strategies Group (“PCS”) within the Asset Management business of Credit Suisse Group AG with responsibility for originating and analyzing investment opportunities.  Mr. Flannery is also a member of the PCS Investment Committee and is currently a high yield bond portfolio manager and trader for PCS.  Mr. Flannery joined Credit Suisse Group AG in 2000 from First Dominion Capital, LLC where he was an Associate.  Mr. Flannery began his career with Houlihan Lokey Howard & Zukin, Inc.  Mr. Flannery holds a B.S. in Finance from Georgetown University.

 

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Wing Chan, a Director of Credit Suisse, has been a member of the US High Yield Management Team since 2005.  Ms. Chan joined Credit Suisse in 2005 from Invesco where she was an Associate Portfolio Manager in the High Yield group.  Prior to joining Invesco in 2002, Ms. Chan began her career in 1999 at JP Morgan Fleming Asset Management where she shared responsibility for the management of Structured and Long Duration products.  Ms. Chan earned a double B.S. in Economics and Finance from the Massachusetts Institute of Technology and is a CFA Charterholder.

 

The SAI provides additional information about the portfolio managers’ compensation, other accounts managed by the portfolio managers and the portfolio managers’ ownership of securities in the Fund.

 

EXPENSES

 

Credit Suisse and State Street are each obligated to pay expenses associated with providing the services contemplated by the agreements to which they are parties, including compensation of and office space for their respective officers and employees connected with investment and economic research, trading and investment management and administration of the Fund, as well as the fees of all Directors of the Fund who are affiliated with those companies or any of their affiliates, if any.  The Fund pays all other expenses incurred in the operation of the Fund including, among other things, expenses for legal and independent registered public accounting firms’ services, costs of printing proxies, stock certificates and shareholder reports, charges of the custodian, any sub-custodians and the transfer and dividend-paying agent, expenses in connection with the dividend reinvestment and cash purchase plan (see “Dividends and Distributions; Dividend Reinvestment and Cash Purchase Plan”), SEC fees, fees and expenses of Independent Directors, accounting and pricing costs, membership fees in trade associations, fidelity bond coverage for the Fund’s officers and employees, directors’ and officers’ errors and omissions insurance coverage, interest, brokerage costs and stock exchange fees, stock exchange listing fees and expenses, expenses of qualifying the Fund’s shares for sale in various states, litigation and other extraordinary or non-recurring expenses, and other expenses properly payable by the Fund.

 

NET ASSET VALUE

 

The net asset value of the Fund is determined daily as of the close of regular trading on the New York Stock Exchange, Inc. (the “Exchange”) on each day the Exchange is open for business.   For purposes of determining the net asset value, 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) is divided by the total number of Shares outstanding at such time.  The Fund determines and makes available for publication the net asset value of its Shares daily.

 

The following is a description of the procedures used by the Fund in valuing its assets.

 

Debt securities with a remaining maturity greater than 60 days are valued in accordance with the price supplied by a pricing service, which may use a matrix, formula or other objective method that takes into consideration market indices, yield curves and other specific adjustments. Debt obligations that will mature in 60 days or less are valued on the basis of amortized cost, which approximates market value, unless it is determined that using this method would not represent fair value.

 

Equity investments are valued at market value, which is generally determined using the closing price on the exchange or market on which the security is primarily traded at the time of valuation (the “Valuation Time”). If no sales are reported, equity investments are generally valued at the most recent bid quotation as of the Valuation Time or at the lowest asked quotation in the case of a short sale of securities.

 

Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies.

 

Investments in open-end investment companies are valued at their net asset value each business day.

 

Securities and other assets for which market quotations are not readily available, or whose values have been materially affected by events occurring before the Fund’s Valuation Time but after the close of the securities’

 

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primary markets, are valued at fair value as determined in good faith by, or under the direction of, the Board under procedures established by the Board. The Fund’s estimate of fair value assumes a willing buyer and a willing seller neither acting under the compulsion to buy or sell. Although these securities may be resold in privately negotiated transactions, the prices realized on such sales could differ from the prices originally paid by the Fund or the current carrying values, and the difference could be material.

 

DIVIDENDS AND DISTRIBUTIONS; DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN

 

The Fund declares and pays dividends on a monthly basis.  Distributions of net realized capital gains, if any, are declared and paid at least annually.  The Fund’s dividend policy is to distribute substantially all of its net investment income to its shareholders on a monthly basis.  However, in order to provide shareholders with a more consistent yield to the current trading price of shares of common stock of the Fund, the Fund may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any month pay out such accumulated but undistributed income in addition to net investment income earned in that month.  As a result, the dividends paid by the Fund for any particular month may be more or less than the amount of net investment income earned by the Fund during such month.

 

The Fund offers a Dividend Reinvestment and Cash Purchase Plan (the “Plan”) to its common stockholders.  Computershare acts as agent for stockholders in administering the Plan (the “Plan Agent”).  Participation in the Plan is voluntary.  For shareholders participating in the Plan, all dividend and capital gain distributions are reinvested in additional Shares of the Fund either purchased on the open market, or issued by the Fund if the Shares are trading at or above their net asset value.  A shareholder whose Shares are held through a bank, broker or nominee should contact such bank, broker or nominee to confirm that they are able to participate in the Plan.

 

Shareholders who do not elect to participate in the Plan will receive all dividends and other distributions in cash paid by check mailed directly to the shareholder of record (or, if the Shares are held in street or other nominee name, then to such nominee) by Computershare as the Dividend-Paying Agent. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by written notice if received by the Plan Agent not less than ten days prior to any dividend record date; otherwise such termination will be effective with respect to any subsequently declared dividend or other distribution.  In order to participate in the Plan, a shareholder must be a registered holder of at least one share of stock of the Fund. If a shareholder is a beneficial owner of the Fund having his or her shares registered in the name of a bank, broker or other nominee, the shareholder must first make arrangements with the organization in whose name the shares are registered to have the shares transferred into the shareholder’s own name. Registered shareholders can join the Plan via the Internet by going to www.computershare.com, authenticating the shareholder’s online account, agreeing to the Terms and Conditions of online “Account Access” and completing an online Plan Enrollment Form. Alternatively, the shareholder can complete the Plan Enrollment Form and return it to Computershare at the address below.

 

Whenever the Fund declares an income dividend or a capital gain distribution payable either in Shares or in cash, non-participants in the Plan will receive cash and participants in the Plan will receive the equivalent in Shares.  By participating in the Plan, your dividends and distributions will be promptly paid to you in additional shares of common stock of the Fund. The number of shares to be issued to the shareholder will be determined by dividing the total amount of the distribution payable to you by the greater of (i) the net asset value per share (“NAV”) of the Fund’s common stock on the payment date, or (ii) 95% of the market price per share of the Fund’s common stock on the payment date. If the NAV of the Fund’s common stock is greater than the market price (plus estimated brokerage commissions) on the payment date, then Computershare (or a broker-dealer selected by Computershare) shall endeavor to apply the amount of such distribution on the shareholder’s shares to purchase shares of Fund common stock in the open market.

 

All net investment income dividends and capital gain distributions are taxable to shareholders as ordinary income and capital gain, respectively, whether received in cash or reinvested in additional shares of the Fund’s common stock.

 

The Plan also permits participants to purchase shares of the Fund through Computershare. Shareholders may invest $100 or more monthly, with a maximum of $100,000 in any annual period. Computershare will purchase

 

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shares for shareholders on the open market on the 25th of each month or the next trading day if the 25th is not a trading day.

 

The reinvestment of dividends will not relieve participants of any Federal, state or local income tax that may be payable (or required to be withheld) on such dividends.  See “Federal Income Taxation.”  Shareholders participating in the Plan may receive benefits not available to Shareholders not participating in the Plan.  If the market price (plus commissions) of the Shares is above their net asset value, participants in the Plan will receive Shares of the Fund at less than they could otherwise purchase them and will 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 below the net asset value, participants will receive distributions in 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 in Shares at prices below the net asset value.  Also, since the Fund does not redeem Shares, the price on resale may be more or less than the net asset value.

 

There is no service fee payable by Plan participants for dividend reinvestment. For voluntary cash payments, Plan participants must pay a service fee of $5.00 per transaction. Plan participants will also be charged a pro rata share of the brokerage commissions for all open market purchases ($0.03 per share as of October 2006). Participants will also be charged a service fee of $5.00 for each sale and brokerage commissions of $0.03 per share (as of October 2006).

 

Shareholders may terminate their participation in the Plan at any time by notifying Computershare or requesting a sale of their shares held in the Plan. Withdrawal will be effective immediately if notice is received by Computershare prior to any dividend or distribution record date; otherwise, such termination will be effective only with respect to any subsequent dividend or distribution. A shareholder’s dividend participation option will remain the same unless the shareholder withdraws all of its whole and fractional Plan shares, in which case the shareholder’s participation in the Plan will be terminated and the shareholder will receive subsequent dividends and capital gains distributions in cash instead of shares.

 

For further information about the Plan, including a brochure describing the Plan in greater detail, shareholders should contact Computershare as follows:

 

By Internet:  www.computershare.com

By phone:  (800) 730-6001 (U.S. and Canada)

(781) 575-3100 (Outside U.S. and Canada)

 

Customer service associates are available from 9:00 a.m. to 5:00 p.m. Eastern time, Monday through Friday

 

By mail: Credit Suisse Asset Management Income Fund, Inc.

c/o Computershare

P.O. Box 43078

Providence, Rhode Island 02940-3078

 

All notices, correspondence, questions or other communications sent by mail should be sent by registered or certified mail, return receipt requested.

 

The Plan may be terminated by the Fund or Computershare upon notice in writing mailed to each participant at least 30 days prior to any record date for the payment of any dividend or distribution.

 

FEDERAL INCOME TAXATION

 

The Fund is treated as a separate entity for U.S. federal income tax purposes.  The Fund has elected to be treated, and has qualified and intends to continue to qualify each year, as a “regulated investment company” under Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”), so that it will not pay U.S. federal income tax on income and capital gains distributed to shareholders.  In order to qualify as a regulated investment company under Subchapter M of the Code, the Fund must, among other things, (i) derive at least 90% of its gross

 

35



 

income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including gains from options, futures, and forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and net income derived from an interest in a qualified publicly traded partnership (as defined in Section 851(h) of the Code) (the “90% income test”) and (ii) diversify its holdings so that, at the end of each quarter of each taxable year: (a) at least 50% of the value of the Fund’s total assets is represented by (1) cash and cash items, U.S. government securities, securities of other regulated investment companies, and (2) other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of the Fund’s total assets and to not more than 10% of the outstanding voting securities of such issuer and (b) not more than 25% of the value of the Fund’s total assets is invested in (1) the securities (other than U.S. government securities and securities of other regulated investment companies) of any one issuer, (2) the securities (other than securities of other regulated investment companies) of two or more issuers that the Fund controls and that are engaged in the same, similar, or related trades or businesses, or (3) the securities of one or more qualified publicly traded partnerships.

 

Although in general the passive loss rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.  Fund investments in partnerships, including in qualified publicly traded partnerships, may result in the fund’s being subject to state, local or foreign income, franchise or withholding tax liabilities.

 

If the Fund qualifies as a regulated investment company and properly distributes to its shareholders each taxable year an amount equal to or exceeding the sum of (i) 90% of its “investment company taxable income” as that term is defined in the Code (which includes, among other things, dividends, taxable interest, and the excess of any net short-term capital gains over net long-term capital losses, as reduced by certain deductible expenses) without regard to the deduction for dividends paid and (ii) 90% of the excess of its gross tax-exempt interest income, if any, over certain disallowed deductions, the Fund generally will not be subject to U.S. federal income tax on any income of the Fund, distributed to shareholders, including “net capital gain” (the excess of net long-term capital gain over net short-term capital loss).  However, if the Fund meets such distribution requirements, but chooses to retain some portion of its taxable income or gains, it generally will be subject to U.S. federal income tax at regular corporate rates on the amount retained.  The Fund may designate certain amounts retained as undistributed net capital gain in a notice to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their proportionate shares of the undistributed amount so designated, (ii) will be entitled to credit their proportionate shares of the income tax paid by the Fund on that undistributed amount against their federal income tax liabilities and to claim refunds to the extent such credits exceed their liabilities and (iii) will be entitled to increase their tax basis, for federal income tax purposes, in their shares by an amount equal to the excess of the amount of undistributed net capital gain included in their respective income over their respective income tax credits.  The Fund intends to distribute at least annually all or substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction), net tax-exempt interest income, and net capital gain.

 

If, for any taxable year, the Fund does not qualify as a regulated investment company or does not satisfy the 90% distribution requirement, it will be treated as a U.S. corporation subject to U.S. federal income tax, thereby subjecting any income earned by the Fund to tax at the corporate level and to a further tax at the shareholder level when such income is distributed.

 

The Code imposes a 4% nondeductible excise tax on the Fund to the extent it does not distribute by the end of any calendar year at least the sum of (i) 98% of its taxable ordinary income for that year and (ii) 98.2% of its capital gain net income (both long-term and short-term) for the one-year period ending, as a general rule, on October 31 of that year.  For this purpose, however, any ordinary income or capital gain net income retained by the Fund that is subject to corporate income tax will be considered to have been distributed by year-end.  In addition, the minimum amounts that must be distributed in any year to avoid the excise tax will be increased or decreased to reflect any underdistribution or overdistribution, as the case may be, from the previous year.  The Fund anticipates that it will pay such dividends and will make such distributions as are necessary in order to avoid the application of this excise tax.

 

The IRS has taken the position that if a regulated investment company has two or more classes of shares, it must report distributions made to each class in any year as consisting of no more than such class’s proportionate

 

36



 

share of particular types of income, including tax-exempt interest, net capital gains, and other income subject to federal income tax.  A class’s proportionate share of a particular type of income is determined according to the percentage of total dividends paid by the regulated investment company to such class.

 

Existing authorities do not specifically address whether dividends that are paid following the close of a taxable year, but that are treated for tax purposes as derived from the income of such prior taxable year, are treated as dividends paid during such prior taxable year for purposes of determining each class’s proportionate share of a particular type of income.  The Fund currently intends to treat such dividends as having been paid in the prior taxable year for purposes of determining each class’s proportionate share of a particular type of income with respect to such prior taxable year.  Existing authorities also do not specifically address the allocation of taxable income among the dividends paid to holders of a class of shares during or with respect to a taxable year.  It is possible that the IRS could disagree with the Fund’s position concerning the treatment of dividends paid after the close of a taxable year, in which case the IRS could attempt to recharacterize a portion of the dividends paid and designated by the Fund as exempt-interest dividends as consisting instead of capital gains or other taxable income.  If the IRS were to prevail with respect to any such attempted recharacterization, holders of that class of shares could be subject to tax on amounts so recharacterized and the Fund could be subject to federal income and excise tax.

 

The Fund declares a dividend from net investment income (excluding capital gains) each month.  Dividends are normally paid on the last business day of the month or shortly thereafter.  The Fund typically distributes any net short-term and long-term capital gains in December.  Dividends from income and/or capital gains may also be paid at such other times as may be necessary for the Fund to avoid U.S. federal income or excise tax.

 

For U.S. federal income tax purposes, all dividends from the Fund generally are taxable whether a shareholder takes them in cash or reinvests them in additional shares of the Fund.  In general, assuming that the Fund has sufficient earnings and profits, dividends from net investment income and from net short-term capital gains are taxable as ordinary income.

 

A 3.8% excise tax will be imposed on net investment income, including dividends, interest and net capital gains, of individuals with annual income of $200,000 or more ($250,000 if married, filing jointly) beginning in 2013.

 

Distributions in excess of the Fund’s minimum distribution requirements but not in excess of the Fund’s earnings and profits will be taxable to shareholders and will not constitute nontaxable returns of capital.  Distributions by the Fund in excess of the Fund’s current and accumulated earnings and profits will be treated as a return of capital to the extent of the shareholder’s tax basis in its shares and will reduce such basis.  Any such amount in excess of that basis will be treated as gain from the sale of shares, as discussed below.

 

Distributions from net capital gains, if any, that are reported as capital gain dividends by the Fund are taxable as long-term capital gains for U.S. federal income tax purposes without regard to the length of time the shareholder has held shares of the Fund.  Capital gain dividends distributed by the Fund to individual and certain other noncorporate shareholders generally will qualify for reduced U.S. federal income tax rates (currently, a maximum rate of 15%, with lower rates applying to taxpayers in the 10% and 15% rate brackets) on long-term capital gains, subject to certain limited exceptions.  A shareholder should also be aware that the benefits of the favorable tax rate applicable to long-term capital gains and qualified dividend income may be affected by the application of the alternative minimum tax to individual shareholders.  Under current law, the reduced maximum 15% U.S. federal income tax rate on qualified dividend income and long-term capital gains will not apply in taxable years beginning after December 31, 2012.

 

The U.S. federal income tax status of all distributions will be reported to shareholders annually.

 

Although dividends generally will be treated as distributed when paid, any dividend declared by the Fund in October, November or December and payable to shareholders of record in such a month that is paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it was declared.  In addition, certain other distributions made after the close of a taxable year of the Fund may be “spilled back” and treated for certain purposes as paid by the Fund during such taxable year.  In such case, shareholders generally will be treated as having received such dividends in the taxable

 

37



 

year in which the distributions were actually made.  For purposes of calculating the amount of a regulated investment company’s undistributed income and gain subject to the 4% excise tax described above, such “spilled back” dividends are treated as paid by the regulated investment company when they are actually paid.

 

For U.S. federal income tax purposes, the Fund is permitted to carry forward a net capital loss for any year to offset its capital gains, if any, for up to eight years following the year of the loss for taxable years beginning before 2011.  Capital loss carry forwards generated in taxable years beginning in 2011 or later will not be subject to expiration but will offset future gains before pre-2011 loss carry forwards.  To the extent subsequent capital gains are offset by such losses, they would not result in U.S. federal income tax liability to the Fund and may not be distributed as such to shareholders.  The Fund may not carry forward any losses other than net capital losses.

 

At the time of an investor’s purchase of fund shares, a portion of the purchase price may be attributable to realized or unrealized appreciation in the Fund’s portfolio or to undistributed capital gains of the Fund.  Consequently, subsequent distributions by the Fund with respect to these shares from such appreciation or gains may be taxable to such investor even if the net asset value of the investor’s shares is, as a result of the distributions, reduced below the investor’s cost for such shares and the distributions economically represent a return of a portion of the investment.

 

Sales and exchanges generally are taxable events for shareholders that are subject to tax.  Shareholders should consult their own tax advisers with reference to their individual circumstances to determine whether any particular transaction in fund shares is properly treated as a sale for tax purposes, as the following discussion assumes, and the tax treatment of any gains or losses recognized in such transactions.  In general, if fund shares are sold, the shareholder will recognize gain or loss equal to the difference between the amount realized on the sale and the shareholder’s adjusted basis in the shares.  Such gain or loss generally will be treated as long-term capital gain or loss if the shares were held for more than one year and otherwise generally will be treated as short-term capital gain or loss.

 

Losses on sales or other dispositions of shares may be disallowed under “wash sale” rules in the event of other investments in the Fund (including those made pursuant to reinvestment of dividends and/or capital gain distributions) within a period of 61 days beginning 30 days before and ending 30 days after a sale or other disposition of shares.  In such a case, the disallowed portion of any loss generally would be included in the U.S. federal tax basis of the shares acquired in the other investments.

 

Under Treasury regulations, if a shareholder recognizes a loss with respect to fund shares of $2 million or more for an individual shareholder, or $10 million or more for a corporate shareholder, in any single taxable year (or of certain greater amounts over a combination of years), the shareholder must file with the IRS a disclosure statement on Form 8886.  Shareholders who own portfolio securities directly are in many cases excepted from this reporting requirement but, under current guidance, shareholders of regulated investment companies are not excepted.  A shareholder who fails to make the required disclosure to the IRS may be subject to substantial penalties.  The fact that a loss is reportable under these regulations does not affect the legal determination of whether or not the taxpayer’s treatment of the loss is proper.  Shareholders should consult with their tax advisers to determine the applicability of these regulations in light of their individual circumstances.

 

Shareholders that are exempt from U.S. federal income tax, such as retirement plans that are qualified under Section 401 of the Code, generally are not subject to U.S. federal income tax on otherwise-taxable fund dividends or distributions, or on sales or exchanges of fund shares unless the Fund shares are “debt-financed property” within the meaning of the Code.  However, in the case of fund shares held through a non-qualified deferred compensation plan, fund dividends and distributions received by the plan and sales and exchanges of fund shares by the plan generally are taxable to the employer sponsoring such plan in accordance with the U.S. federal income tax laws that are generally applicable to shareholders receiving such dividends or distributions from regulated investment companies such as the Fund.

 

A plan participant whose retirement plan invests in the Fund, whether such plan is qualified or not, generally is not taxed on any fund dividends or distributions received by the plan or on sales or exchanges of fund shares by the plan for U.S. federal income tax purposes.  However, distributions to plan participants from a retirement plan account generally are taxable as ordinary income, and different tax treatment, including penalties on

 

38



 

certain excess contributions and deferrals, certain pre-retirement and post-retirement distributions and certain prohibited transactions, is accorded to accounts maintained as qualified retirement plans.  Shareholders should consult their tax advisers for more information.

 

The Fund may invest to a significant extent in debt obligations that are in the lowest rating categories or that are unrated, including debt obligations of issuers not currently paying interest or that are in default.  Investments in debt obligations that are at risk of or in default present special tax issues for the Fund.  Federal income tax rules are not entirely clear about issues such as when the Fund may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless securities, how payments received on obligations in default should be allocated between principal and interest and whether certain exchanges of debt obligations in a workout context are taxable.  These and other issues will be addressed by the Fund, in the event it invests in or holds such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.

 

If the Fund invests in certain pay-in-kind securities, zero coupon securities, deferred interest securities or, in general, any other securities with original issue discount (or with market discount if the Fund elects to include market discount in income currently), the Fund generally must accrue income on such investments for each taxable year, which generally will be prior to the receipt of the corresponding cash payments.  However, the Fund must distribute to its shareholders, at least annually, all or substantially all of its investment company taxable income (determined without regard to the deduction for dividends paid) and net tax-exempt income, including such accrued income, to qualify to be treated as a regulated investment company under the Code and avoid U.S. federal income and excise taxes.  Therefore, the Fund may have to dispose of its portfolio securities, potentially under disadvantageous circumstances, to generate cash, or may have to borrow the cash, to satisfy distribution requirements.  Such a disposition of securities may potentially result in additional taxable gain or loss to the Fund.

 

Options written or purchased and futures contracts entered into by the Fund on certain securities, indices and foreign currencies, as well as certain forward foreign currency contracts, may cause the Fund to recognize gains or losses from marking-to-market even though such options may not have lapsed or been closed out or exercised, or such futures or forward contracts may not have been performed or closed out.  The tax rules applicable to these contracts may affect the characterization of some capital gains and losses realized by the Fund as long-term or short-term.  Certain options, futures and forward contracts relating to foreign currency may be subject to Section 988 of the Code, and accordingly may produce ordinary income or loss.  Additionally, the Fund may be required to recognize gain if an option, futures contract, forward contract, short sale or other transaction that is not subject to the mark-to-market rules is treated as a “constructive sale” of an “appreciated financial position” held by the Fund under Section 1259 of the Code.  Any net mark-to-market gains and/or gains from constructive sales may also have to be distributed to satisfy the distribution requirements referred to above even though the Fund may receive no corresponding cash amounts, possibly requiring the disposition of portfolio securities or borrowing to obtain the necessary cash.  Such a disposition of securities may potentially result in additional taxable gain or loss to the Fund.  Losses on certain options, futures or forward contracts and/or offsetting positions (portfolio securities or other positions with respect to which the Fund’s risk of loss is substantially diminished by one or more options, futures or forward contracts) may also be deferred under the tax straddle rules of the Code, which may also affect the characterization of capital gains or losses from straddle positions and certain successor positions as long-term or short-term.  Certain tax elections may be available that would enable the Fund to ameliorate some adverse effects of the tax rules described in this paragraph.  The tax rules applicable to options, futures, forward contracts and straddles may affect the amount, timing and character of the Fund’s income and gains or losses and hence of its distributions to shareholders.

 

As a result of entering into swap contracts, the Fund may make or receive periodic net payments.  The Fund may also make or receive a payment when a swap is terminated prior to maturity through an assignment of the swap or other closing transaction.  Periodic net payments will generally constitute ordinary income or deductions, while termination of a swap will generally result in capital gain or loss (which will be a long-term capital gain or loss if the fund has been a party to the swap for more than one year).  With respect to certain types of swaps, the Fund may be required to currently recognize income or loss with respect to future payments on such swaps or may elect under certain circumstances to mark such swaps to market annually for tax purposes as ordinary income or loss.

 

39


 


 

The Fund may be subject to withholding and other taxes imposed by foreign countries, including taxes on interest, dividends and capital gains with respect to its investments in those countries.  Any such taxes would, if imposed, reduce the yield on or return from those investments.  Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes in some cases.  The Fund does not expect to satisfy the requirements for passing through to its shareholders any share of foreign taxes paid by the Fund, with the result that shareholders will not include such taxes in their gross incomes and will not be entitled to a tax deduction or credit for such taxes on their own tax returns.

 

The Fund is required to withhold (as “backup withholding”) a certain percentage of reportable payments, including dividends, capital gain distributions and the proceeds of redemptions or repurchases of fund shares paid to shareholders who have not complied with certain IRS regulations.  In order to avoid this withholding requirement, shareholders, other than certain exempt entities, must certify on their Account Applications, or on separate IRS Forms W-9, that the Social Security Number or other Taxpayer Identification Number they provide is their correct number and that they are not currently subject to backup withholding, or that they are exempt from backup withholding.  The Fund may nevertheless be required to backup withhold if it receives notice from the IRS or a broker that the number provided is incorrect or backup withholding is applicable as a result of previous underreporting of interest or dividend income.

 

If, as anticipated, the Fund qualifies as a regulated investment company under the Code, it will not be required to pay any Massachusetts income, corporate excise or franchise taxes or any Delaware corporation income tax.

 

A state income (and possibly local income and/or intangible property) tax exemption is generally available to shareholders to the extent the Fund’s distributions are derived from interest on (or, in the case of intangible property taxes, the value of its assets is attributable to) certain U.S. government obligations, provided in some states that certain thresholds for holdings of such obligations and/or reporting requirements are satisfied.  The Fund will not seek to satisfy any threshold or reporting requirements that may apply in particular taxing jurisdictions, although the Fund may in its sole discretion provide relevant information to shareholders.

 

A 30% withholding tax will be imposed on dividends after December 31, 2013, and redemption proceeds paid after December 31, 2014, to (i) foreign financial institutions including non-U.S. investment funds unless they agree to collect and disclose to the IRS (or to local revenue authorities, if an intergovernment agreement applies) information regarding their direct and indirect U.S. account holders and (ii) certain other foreign entities unless they certify certain information regarding their direct and indirect U.S. owners. To avoid withholding, foreign financial institutions will need to enter into agreements with the IRS that state that they will provide the IRS information including the name, address and taxpayer identification number of direct and indirect U.S. account holders, to comply with due diligence procedures with respect to the identification of U.S. accounts, to report to the IRS certain information with respect to U.S. accounts maintained, to agree to withhold tax on certain payments made to non-compliant foreign financial institutions or to account holders who fail to provide the required information, and to determine certain other information as to their account holders.  Other foreign entities will need to provide the name, address, and taxpayer identification number of each substantial U.S. owner or certifications of no substantial U.S. ownership unless certain exceptions apply.

 

REPURCHASE OF SHARES

 

Shares of closed-end management investment companies often trade at a discount to their net asset values, and the Shares may likewise trade at a discount to their net asset value, although it is possible that they may trade at a premium above net asset value. The market price of the Shares will be determined by such factors as relative demand for and supply of such Shares in the market, the Fund’s net asset value, general market and economic conditions and other factors beyond the control of the Fund. See “Net Asset Value.” Although the shareholders will not have the right to redeem their Shares, the Fund may take action to repurchase Shares in the open market or make tender offers for Shares at their net asset value. This may have the effect of reducing any market discount from net asset value.

 

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There is no assurance that if action is undertaken to repurchase or tender for Shares, such action will result in the Shares’ trading at a price which approximates their net asset value. Although Share repurchases and tenders could have a favorable effect on the market price of the Shares, it should be recognized that the acquisition of Shares by the Fund will decrease the total assets of the Fund and, therefore, have the effect of increasing the Fund’s expense ratio. Any Share repurchases or tender offers will be made in accordance with requirements of the Securities Exchange Act of 1934, as amended, and the 1940 Act.

 

DESCRIPTION OF SHARES

 

General

 

The Fund is authorized to issue 100,000,000 Shares.  Each Share has one vote and, when issued and paid for in accordance with the terms of the offer, will be fully paid and non-assessable.  Shares of one class have equal rights as to dividends and in liquidation.  Shares have no preemptive, subscription or conversion rights and are freely transferable.  The Fund will send annual and semi-annual financial statements to all its Shareholders.

 

Offerings of Shares, if made, will require approval of the Board.  The Board is authorized, however, to classify and reclassify any unissued shares into one or more additional or other classes or series as may be established from time to time by setting or changing in any one or more respects the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications or terms or conditions of redemption of such shares and pursuant to such classification or reclassification to increase or decrease the number of authorized shares of any existing class or series.  The Fund may reclassify and offer unissued shares as preferred stock subject to the limitations of the 1940 Act.  Any additional offering will not be made at a price per Share below the then current net asset value (exclusive of underwriting discounts and commissions) except in connection with an offering to existing shareholders or with the consent of a majority of the Fund’s outstanding Shares.

 

Common Stock

 

The Fund’s common stock is publicly held and are listed and traded on the NYSE MKT under the symbol “CIK.”

 

As of [               ], 2012, the net asset value per Share of the Fund was $[    ]and on that date the closing price per Share on the NYSE MKT was $[    ], meaning the Fund’s Shares were trading at a [    ]% premium to the Fund’s net asset value per Share.

 

Although the Fund’s Shares have recently traded at a premium to their net asset value, the Fund’s Shares have in the past traded at a discount to their net asset value.  The Fund cannot determine the reasons why the Fund’s Shares trade at a premium to or discount from net asset value, nor can the Fund predict whether its Shares will trade in the future at a premium to or discount from net asset value, or the level of any premium or discount.  Shares of closed-end investment companies frequently trade at a discount from net asset value.

 

Anti-Takeover Provisions in the Articles of Incorporation

 

Certain provisions of the Charter and By-laws of the Fund may have the effect of anti-takeover measures.  The By-laws provide that the Board of Directors shall be divided into three staggered classes, each having a three-year term, so that only one class of directors is elected each year.  Removal of any director may occur only by a two-thirds stockholder vote and only for cause.  The Charter gives the Board of Directors sole authority over By-law amendments.  Meetings of stockholders are called by the Board.  Stockholders wishing to call a special meeting may do so only upon the written request of holders of a majority of the outstanding shares.

 

PLAN OF DISTRIBUTION

 

We may sell Shares through underwriters or dealers, directly to one or more purchasers (including existing shareholders in a rights offering), through agents, to or through underwriters or dealers, or through a combination of any such methods of sale.  The applicable Prospectus Supplement will identify any underwriter or agent involved in the offer and sale of our Shares, any sales loads, discounts, commissions, fees or other compensation paid to any underwriter, dealer or agent, the offering price, net proceeds and use of proceeds and the terms of any sale.  In the case of a rights offering, the applicable Prospectus Supplement will set forth the number of our Shares issuable upon the exercise of each right and the other terms of such rights offering.

 

41



 

The distribution of our Shares may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at prevailing market prices at the time of sale, at prices related to such prevailing market prices, or at negotiated prices.

 

We may sell our Shares directly to, and solicit offers from, institutional investors or others who may be deemed to be underwriters as defined in the Securities Act of 1933 (the “Securities Act”) for any resales of the securities.  In this case, no underwriters or agents would be involved.  We may use electronic media, including the Internet, to sell offered securities directly.

 

In connection with the sale of our Shares, underwriters or agents may receive compensation from us in the form of discounts, concessions or commissions.  Underwriters may sell our Shares to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents.  Underwriters, dealers and agents that participate in the distribution of our Shares may be deemed to be underwriters under the Securities Act, and any discounts and commissions they receive from us and any profit realized by them on the resale of our Shares may be deemed to be underwriting discounts and commissions under the Securities Act.  Any such underwriter or agent will be identified and any such compensation received from us will be described in the applicable Prospectus Supplement.  The maximum amount of compensation to be received by any FINRA member or independent broker-dealer will not exceed eight percent for the sale of any securities being registered pursuant to SEC Rule 415.  We will not pay any compensation to any underwriter or agent in the form of warrants, options, consulting or structuring fees or similar arrangements.  In connection with any rights offering to existing shareholders, we may enter into a standby underwriting arrangement with one or more underwriters pursuant to which the underwriter(s) will purchase Shares remaining unsubscribed after the rights offering.

 

If a Prospectus Supplement so indicates, we may grant the underwriters an option to purchase additional Shares at the public offering price, less the underwriting discounts and commissions, within 45 days from the date of the Prospectus Supplement, to cover any over-allotments.

 

Under agreements into which we may enter, underwriters, dealers and agents who participate in the distribution of our Shares may be entitled to indemnification by us against certain liabilities, including liabilities under the Securities Act.  Underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business.

 

If so indicated in the applicable Prospectus Supplement, we will ourselves, or will authorize underwriters or other persons acting as our agents to solicit offers by certain institutions to purchase our Shares from us pursuant to contracts providing for payment and delivery on a future date.  Institutions with which such contracts may be made include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others, but in all cases such institutions must be approved by us.  The obligation of any purchaser under any such contract will be subject to the condition that the purchase of the Shares shall not at the time of delivery be prohibited under the laws of the jurisdiction to which such purchaser is subject.  The underwriters and such other agents will not have any responsibility in respect of the validity or performance of such contracts.  Such contracts will be subject only to those conditions set forth in the Prospectus Supplement, and the Prospectus Supplement will set forth the commission payable for solicitation of such contracts.

 

To the extent permitted under the 1940 Act and the rules and regulations promulgated thereunder, the underwriters may from time to time act as brokers or dealers and receive fees in connection with the execution of our portfolio transactions after the underwriters have ceased to be underwriters and, subject to certain restrictions, each may act as a broker while it is an underwriter.

 

A Prospectus and accompanying Prospectus Supplement in electronic form may be made available on the websites maintained by underwriters.  The underwriters may agree to allocate a number of securities for sale to their online brokerage account holders.  Such allocations of securities for Internet distributions will be made on the same basis as other allocations.  In addition, securities may be sold by the underwriters to securities dealers who resell securities to online brokerage account holders.

 

42



 

In order to comply with the securities laws of certain states, if applicable, our Shares offered hereby will be sold in such jurisdictions only through registered or licensed brokers or dealers.

 

CLOSED-END FUND STRUCTURE

 

Closed-end funds differ from open-end investment companies (commonly referred to as mutual funds) in that closed-end funds generally list their shares for trading on a securities exchange and do not redeem their shares at the option of the shareholder. By comparison, mutual funds issue securities redeemable at NAV at the option of the shareholder and typically engage in a continuous offering of their shares. Mutual funds are subject to continuous asset in-flows and out-flows that can complicate portfolio management, whereas closed-end funds generally can stay more fully invested in securities consistent with the closed-end fund’s investment objective and policies. In addition, in comparison to open-end funds, closed-end funds have greater flexibility in their ability to make certain types of investments, including investments in illiquid securities.

 

However, shares of closed-end investment companies listed for trading on a securities exchange frequently trade at a discount from NAV, although in some cases they may trade at a premium. The market price may be affected by trading volume of the shares, general market and economic conditions and other factors beyond the control of the closed-end fund. The foregoing factors may result in the market price of the shares being greater than, less than or equal to NAV. The Board has reviewed the structure of the Fund in light of its investment objective and policies and has determined that the closed-end structure is in the best interests of the shareholders. As described above, however, the Board will review periodically the trading range and activity of the Fund’s shares of common stock with respect to its NAV and the Board may take certain actions to seek to reduce or eliminate any such discount. Such actions may include open market repurchases or tender offers for the shares of common stock at net asset value or the possible conversion of the Fund to an open-end investment company. There can be no assurance that the Board will decide to undertake any of these actions or that, if undertaken, such actions would result in the shares of common stock trading at a price equal to or close to net asset value per share.

 

CUSTODIAN, TRANSFER AGENT AND DIVIDEND-PAYING AGENT

 

State Street serves as the Fund’s custodian pursuant to a custody agreement. Under the custody agreement, the Custodian holds the Fund’s assets in compliance with the 1940 Act. State Street is located at One Lincoln Street, Boston, Massachusetts 02111.

 

Computershare Trust Company, N.A. acts as the Fund’s transfer agent and dividend-paying agent under the Fund’s dividend reinvestment and cash purchase plan. Computershare Trust Company, N.A. is located at P.O. Box 43078, Providence, Rhode Island, 02940.

 

LEGAL PROCEEDINGS

 

There are no material pending legal proceedings to which the Fund or the Investment Adviser is a party.

 

REPORTS TO SHAREHOLDERS

 

The Fund will send unaudited semi-annual and audited annual reports to shareholders, including a list of the portfolio investments held by the Fund.

 

ADDITIONAL INFORMATION

 

We have filed with the SEC a registration statement on Form N-2 together with all amendments and related exhibits under the Securities Act. The registration statement contains additional information about us and the securities being offered by this prospectus.

 

We file annual and semi-annual reports, proxy statements and other information with the SEC. You can inspect any materials we file with the SEC, without charge, at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. The information we file with the SEC is available free of charge by contacting us at Credit Suisse,

 

43



 

One Madison Avenue, New York, New York 10010 or by telephone at 1-800-293-1232 or on our website at www.credit-suisse.com/us/funds. The SEC also maintains a website that contains reports, proxy statements and other information regarding registrants, including us, that file such information electronically with the SEC. The address of the SEC’s website is www.sec.gov. Unless specifically incorporated into this prospectus, documents contained on our website or on the SEC’s web site about us is not incorporated into this prospectus and should not be considered or on the SEC’s website to be part of this prospectus.

 

TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

 

 

Page

Fund History

3

Other Investment Practices

3

Management of the Fund

15

Principal Holders of Securities

24

Investment Adviser

24

Administrator

25

Custodian, Transfer Agent and Dividend-Paying Agent

25

Independent Registered Public Accounting Firm

26

Portfolio Management

26

Portfolio Transactions

27

Taxation

29

Legal Matters

34

Financial Statements

34

Appendix A: Description of Ratings

A-1

Appendix B: Proxy Voting Policies and Procedures

B-1

 

44


 


 

 

 

$40,000,000

 

Shares of Common Stock

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

PROSPECTUS

 

[                   ], 2012

 

 

 


 


 

PROSPECTUS SUPPLEMENT

 

(To Prospectus dated as of [               ,         ])

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

Up to [                            ]Shares of Common Stock

 

Credit Suisse Asset Management Income Fund, Inc. (the “Fund”) has entered into a sales agreement (the “sales agreement”) with [            ] (“[          ]”) relating to its shares of common stock (“Common Shares”) offered by this Prospectus Supplement and the accompanying Prospectus. In accordance with the terms of the sales agreement, the Fund may offer and sell up to [            ] of its Common Shares, par value $0.001 per share, from time to time through [          ] as its agent for the offer and sale of the Common Shares, subject to an aggregate cap of $[                      ]. Under the Investment Company Act of 1940, as amended (the “1940 Act”), the Fund may not sell any Common Shares at a price below the current net asset value of such Common Shares, exclusive of any distributing commission or discount. The Fund is a diversified, closed-end management investment company. The Fund’s investment objective is current income consistent with the preservation of capital. There can be no assurance that the Fund will achieve its investment objective.

 

The Fund’s currently outstanding Common Shares are, and the Common Shares offered by this Prospectus Supplement and the accompanying Prospectus will be, subject to notice of issuance, listed on the NYSE MKT under the symbol “CIK.” The last reported sale price for the Fund’s Common Shares on the NYSE MKT on [                ], 2012 was $[    ]per share. The net asset value of the Fund’s Common Shares at the close of business on [            ], 2012 was $[    ] per share.

 

Sales of the Common Shares, if any, under this Prospectus Supplement and the accompanying Prospectus may be made in negotiated transactions or transactions that are deemed to be “at the market” as defined in Rule 415 under the Securities Act of 1933, as amended (the “1933 Act”), including sales made directly on the NYSE MKT or sales made to or through a market maker other than on an exchange.

 

[          ] will be entitled to compensation of between [    ] and [    ] basis points of the gross sales price per share for any Common Shares sold under the sales agreement, with the exact amount of such compensation to be mutually agreed upon by the Fund and [          ] from time to time. In connection with the sale of the Common Shares on the Fund’s behalf, [          ] may be deemed to be an “underwriter” within the meaning of the 1933 Act and the compensation of [          ] may be deemed to be underwriting commissions or discounts.

 

You should review the information set forth under “Risks and Special Considerations” on page S-2 of the accompanying Prospectus before investing in the Fund’s Common Shares.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this Prospectus Supplement or the accompanying Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The date of this Prospectus Supplement is [                 ,       ].

 



 

You should rely only on the information contained in or incorporated by reference into this Prospectus Supplement and the accompanying Prospectus. This Prospectus Supplement and the accompanying Prospectus set forth certain information about the Fund that a prospective investor should carefully consider before deciding whether to invest in the Fund’s Common Shares. This Prospectus Supplement, which describes the specific terms of this offering including the method of distribution, also adds to and updates information contained in the accompanying Prospectus and the documents incorporated by reference into the accompanying Prospectus. The accompanying Prospectus gives more general information, some of which may not apply to this offering. If the description of this offering varies between this Prospectus Supplement and the accompanying Prospectus, you should rely on the information contained in this Prospectus Supplement; provided that if any statement in one of these documents is inconsistent with a statement in another document having a later date and incorporated by reference into the accompanying Prospectus or Prospectus Supplement, the statement in the incorporated document having a later date modifies or supersedes the earlier statement. Neither the Fund nor [          ] has authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The Fund is not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. The information contained in or incorporated by reference into this Prospectus Supplement and the accompanying Prospectus is accurate only as of the respective dates on their front covers, regardless of the time of delivery of this Prospectus Supplement, the accompanying Prospectus, or the sale of the Common Shares. The Fund’s business, financial condition, results of operations and prospects may have changed since those dates.

 

TABLE OF CONTENTS

 

Prospectus Supplement

 

 

Page

Prospectus Supplement Summary

S-1

Distributions

S-3

Summary of Fund Expenses

S-4

Use of Proceeds

S-6

Capitalization

S-7

Plan of Distribution

S-8

Legal Matters

S-9

Additional Information

S-9

 

Prospectus

 

Prospectus Summary

1

Summary of Fund Expenses

11

Financial Highlights

11

Use of Proceeds

15

The Fund

15

Investment Objective

15

Investment Policies

15

Investment Restrictions

22

Risks and Special Considerations

23

Management of the Fund

32

Expenses

33

Net Asset Value

33

Dividends and Distributions; Dividend Reinvestment and Cash Purchase Plan

34

Federal Income Taxation

35

Repurchase of Shares

40

Description of Shares

41

Plan of Distribution

41

 

ii



 

Closed-End Fund Structure

43

Custodian, Transfer Agent and Dividend-Paying Agent

43

Legal Proceedings

43

Reports to Shareholders

43

Additional Information

43

Table of Contents of Statement of Additional Information

44

 

iii



 

You should read this Prospectus Supplement and the accompanying Prospectus before deciding whether to invest and retain them for future reference. A Statement of Additional Information, dated [                 ,         ] (“SAI”), as supplemented from time to time, containing additional information about the Fund, has been filed with the Securities and Exchange Commission (“SEC”) and is incorporated by reference in its entirety into this Prospectus Supplement. You may request a free copy of the SAI or request other information about the Fund (including the Fund’s annual and semi-annual reports to shareholders) or make shareholder inquiries by calling 1-800-293-1232 or by writing to the Fund at c/o Credit Suisse Asset Management, LLC, One Madison Avenue, New York, New York 10010. The Fund’s SAI, as well as the annual and semi-annual reports to shareholders, are also available at the Fund’s website at www.credit-suisse.com/us. You may also obtain copies of these documents (and other information regarding the Fund) from the SEC’s website (http://www.sec.gov).

 

CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

 

This Prospectus Supplement, the accompanying Prospectus and the SAI contain “forward-looking statements.” Forward-looking statements can be identified by the words “may,” “will,” “intend,” “expect,” “estimate,” “continue,” “plan,” “anticipate,” and similar terms and the negative of such terms. By their nature, all forward-looking statements involve risks and uncertainties, and actual results could differ materially from those contemplated by the forward-looking statements. Several factors that could materially affect the Fund’s actual results are the performance of the portfolio of securities the Fund holds, the price at which the Fund’s shares will trade in the public markets and other factors discussed in the Fund’s periodic filings with the SEC.

 

Although the Fund believes that the expectations expressed in the forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in such forward-looking statements. The Fund’s future financial condition and results of operations, as well as any forward-looking statements, are subject to change and are subject to inherent risks and uncertainties, such as those disclosed in the “Risks and Special Considerations” section of the accompanying Prospectus. All forward-looking statements contained in or incorporated by reference into this Prospectus Supplement or the accompanying Prospectus are made as of the date of this Prospectus Supplement or the accompanying Prospectus, as the case may be. Except for the Fund’s ongoing obligations under the federal securities laws, it does not intend, and it undertakes no obligation, to update any forward-looking statements. The forward-looking statements contained in this Prospectus Supplement, the accompanying Prospectus and the SAI are excluded from the safe harbor protection provided by Section 27A of the 1933 Act.

 

iv



 

PROSPECTUS SUPPLEMENT SUMMARY

 

The following information is only a summary. You should consider the more detailed information contained in this Prospectus Supplement, the accompanying Prospectus, dated [               ,         ], and the SAI, dated [               ,         ], especially the information under “Risks and Special Considerations” on page [    ] of the accompanying Prospectus.

 

The Fund     The Fund is a diversified, closed-end management investment company organized as a trust under the laws of the State of Maryland.

 

The Fund’s Common Shares are listed for trading on the NYSE MKT under the symbol “CIK.” As of [                ], 2012, the net assets of the Fund were $[                ] and the Fund had outstanding [                    ] Common Shares. As of [                  ], 2012, the per share net asset value of the Fund’s Common Shares was $[    ] and the per share market price of the Fund’s Common Shares was $[      ], representing an [    ]% premium over such net asset value. See “Description of Shares” in the accompanying Prospectus.

 

The Fund’s investment objective is current income consistent with the preservation of capital.

 

Under normal circumstances, the Fund invests at least 75% of its total assets in fixed income securities, such as bonds, convertible securities and preferred stocks.  The Fund’s investments in fixed income securities are not subject to any rating quality limitation.  The Fund primarily invests in high yield U.S. corporate fixed income securities that are in the lower rating categories of Moody’s Investor Services, Inc. (“Moody’s”), Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. (“S&P”) or another nationally recognized ratings service.  Lower-rated securities generally provide yields superior to those of more highly-rated securities, but involve greater risks and are speculative in nature.  See “Risks and Special Considerations — Lower-Rated Securities” in the accompanying Prospectus.  The Fund may also invest in securities rated single A or higher by Moody’s or S&P and unrated corporate fixed income securities.  See “Investment Policies” in the accompanying Prospectus.

 

Information Regarding the Investment Adviser     Credit Suisse, the Fund’s investment adviser, is part of the asset management business of Credit Suisse Group AG, one of the world’s leading banks. Credit Suisse serves as the Fund’s investment adviser with respect to all investments and is responsible for making all investment decisions. Credit Suisse receives from the Fund, as compensation for its advisory services, an annual fee, computed weekly and payable quarterly as follows: 0.50% of the lower of the weekly stock price (market value) of the Fund’s outstanding shares or its average weekly net assets.  Credit Suisse may waive voluntarily a portion of its fees from time to time and temporarily limit the expenses to be borne by the Fund. The Investment Adviser is located at One Madison Avenue, New York, New York 10010. See “Management of the Fund—Investment Adviser.”

 

The Offering     The Fund and the Investment Adviser entered into a sales agreement with [          ] relating to the Common Shares offered by this Prospectus Supplement and the accompanying Prospectus. In accordance with the terms of the sales agreement, the Fund may offer and sell up to [                    ] of its Common Shares, par value $0.001 per share, from time to time through [          ] as its agent for the offer and sale of the Common Shares, subject to an aggregate cap of $[                    ].

 

The Fund’s Common Shares are listed for trading on the NYSE MKT under the symbol “CIK.” The last reported sale price of the Fund’s Common Shares, as reported on the NYSE MKT on [                  ], 2012, was $[      ] per share.

 

Sales of the Fund’s Common Shares, if any, under this Prospectus Supplement and the accompanying Prospectus may be made in negotiated transactions or transactions that are deemed to be “at the market” as defined in Rule 415 under the 1933 Act, including sales made directly on the NYSE MKT or sales made to or through a market maker other than on an exchange. See “Plan of Distribution” in this Prospectus Supplement. The Fund’s Common Shares may not be sold through agents, underwriters or dealers without delivery or deemed delivery of a prospectus and a prospectus supplement describing the method and terms of the offering of the Fund’s securities. Under the 1940 Act,

 

S-1



 

the Fund may not sell any Common Shares at a price below the current net asset value of such Common Shares, exclusive of any distributing commission or discount.

 

Use of Proceeds     The Fund intends to invest the net proceeds of this offering in accordance with its investment objectives and policies as stated in the accompanying Prospectus. Proceeds will be invested within approximately 30 days of receipt by the Fund. Pending such investment, the Fund anticipates investing the proceeds in short-term securities issued by the U.S. government or its agencies or instrumentalities or in high quality, short-term or long-term debt obligations or money market instruments.

 

Risks and Special Considerations     See “Risks and Special Considerations” beginning on page [    ] of the accompanying Prospectus for a discussion of factors you should consider carefully before deciding to invest in the Fund’s Common Shares.

 

S-2


 


 

DISTRIBUTIONS

 

The Fund declares and pays dividends on a monthly basis. Distributions of net realized capital gains, if any, are declared and paid at least annually. The Fund’s dividend policy is to distribute substantially all of its net investment income to its shareholders on a monthly basis. However, in order to provide shareholders with a more consistent yield to the current trading price of shares of beneficial interest of the Fund, the Fund may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Fund for any particular month may be more or less than the amount of net investment income earned by the Fund during such month.

 

The amounts of the last four monthly dividends paid by the Fund are as set out below:

 

Payment Date

 

Dividend per
Common Share

 

 

 

$

 

 

 

$

 

 

 

$

 

 

 

$

 

 

See “Dividends and Distributions; Dividend Reinvestment and Cash Purchase Plan” in the accompanying Prospectus.

 

S-3



 

SUMMARY OF FUND EXPENSES

 

The following table and example are intended to assist you in understanding the various costs and expenses directly or indirectly associated with investing in Common Shares of the Fund. Some of the percentages indicated in the table below are estimates and may vary.

 

Shareholder Transaction Expenses

 

 

 

Sales Load (as a percentage of offering price)

 

 

%(1)

Offering Expenses (as a percentage of offering price)

 

 

%(2)

Dividend Reinvestment Plan Fees

 

None

(3)

Annual Operating Expenses (as a percentage of average net assets attributable to the Fund’s Common Shares)

 

 

 

Management Fee(4)

 

 

%

Other Expenses(5)

 

 

%

Total Annual Operating Expenses

 

 

%

 


(1)  Represents the estimated commission with respect to the Fund’s Common Shares being sold in this offering, which the Fund will pay to [          ] in connection with the sales of Common Shares effected by [          ] in this offering. While [          ] is entitled to a commission of between [    ]%  and [    ]% of the gross sales price for Common Shares sold, with the exact amount to be agreed upon by the parties, the Fund has assumed, for purposes of this offering, that [          ] will receive a commission of [    ]% of such gross sales price. This is the only sales load to be paid in connection with this offering. There is no guarantee that there will be any sales of the Fund’s Common Shares pursuant to this Prospectus Supplement and the accompanying Prospectus. Actual sales of the Fund’s Common Shares under this Prospectus Supplement and the accompanying Prospectus, if any, may be less than as set forth under “Capitalization” below. In addition, the price per share of any such sale may be greater or less than the price set forth under “Capitalization” below, depending on market price of the Fund’s Common Shares at the time of any such sale.

 

(2)  Includes the Fund’s payment of the reasonable fees and expenses of counsel for [          ] in connection with the transactions contemplated by the sales agreement, as described under “Plan of Distribution” below.

 

(3)  Participants in the Fund’s dividend reinvestment plan pay only transaction-based charges. Actual costs will vary for each participant depending on the nature and number of transactions made. See “Dividends and Distributions; Dividend Reinvestment and Cash Purchase Plan” in the accompanying Prospectus.

 

(4)  See “Management of the Fund—Investment Adviser” in the accompanying Prospectus.

 

(5)  “Other Expenses” have been estimated for the current fiscal year. Includes the Fund’s estimated payment of the reasonable fees and expenses of counsel for [          ] in connection with the transactions contemplated by the sales agreement, as described under “Plan of Distribution” below.

 

Example

 

An investor would pay the following expenses on a $1,000 investment in the Fund, assuming (1) Total Annual Operating Expenses of [      ]%, (2) a Sales Load (commission) of $[    ]and estimated offering expenses of $[    ] and (3) a 5% annual return:

 

One Year

 

Three Years

 

Five Years

 

Ten Years

 

$

[      ]

 

$

[      ]

 

$

[      ]

 

$

[      ]

 

 

The “Example” assumes that all dividends and other distributions are reinvested at net asset value and that the percentage amounts listed in the table above under Total Annual Operating Expenses remain the same in the years shown. The above table and example and the assumption in the example of a 5% annual return are required by

 

S-4



 

regulations of the SEC that are applicable to all investment companies; the assumed 5% annual return is not a prediction of, and does not represent, the projected or actual performance of the Fund’s Common Shares.

 

The example should not be considered a representation of past or future expenses, and the Fund’s actual expenses may be greater than or less than those shown. Moreover, the Fund’s actual rate of return may be greater or less than the hypothetical 5% return shown in the example.

 

S-5



 

USE OF PROCEEDS

 

Sales of the Fund’s Common Shares, if any, under this Prospectus Supplement and the accompanying Prospectus may be made in negotiated transactions or transactions that are deemed to be “at the market” as defined in Rule 415 under the 1933 Act, including sales made directly on the NYSE MKT or sales made to or through a market maker other than on an exchange. There is no guarantee that there will be any sales of the Fund’s Common Shares pursuant to this Prospectus Supplement and the accompanying Prospectus. Actual sales, if any, of the Fund’s Common Shares under this Prospectus Supplement and the accompanying Prospectus may be less than as set forth in this paragraph. In addition, the price per share of any such sale may be greater or less than the price set forth in this paragraph, depending on the market price of the Fund’s Common Shares at the time of any such sale. As a result, the actual net proceeds the Fund receives may be more or less than the amount of net proceeds estimated in this Prospectus Supplement. Assuming the sale of all of the Fund’s Common Shares offered under this Prospectus Supplement and the accompanying Prospectus, at the last reported sale price of $[      ] per share for the Fund’s Common Shares on the NYSE MKT as of [            ], 2012, the Fund estimates that the net proceeds of this offering will be approximately $[                ] after deducting the estimated sales load and the estimated offering expenses payable by the Fund.

 

The Fund intends to invest the net proceeds of this offering in accordance with its investment objectives and policies as stated in the accompanying Prospectus within approximately 30 days of receipt of such proceeds. Pending such investment, the Fund anticipates investing the proceeds in short-term securities issued by the U.S. government or its agencies or instrumentalities or in high quality, short-term or long-term debt obligations or money market instruments.

 

S-6



 

CAPITALIZATION

 

Pursuant to the sales agreement with [          ] dated [                     ,           ], the Fund may offer and sell up to [              ] of its Common Shares, par value $0.001 per share, from time to time through [          ] as its agent for the offer and sale of the Common Shares under this Prospectus Supplement and the accompanying Prospectus. There is no guarantee that there will be any sales of the Fund’s Common Shares pursuant to this Prospectus Supplement and the accompanying Prospectus. The table below assumes that the Fund will sell [                        ] Common Shares, at a price of $[    ] per share (the last reported sale price per share of the Fund’s Common Shares on the NYSE MKT on [                ], 2012). Actual sales, if any, of the Fund’s Common Shares under this Prospectus Supplement and the accompanying Prospectus may be less than as set forth in the table below. In addition, the price per share of any such sale may be greater or less than $[      ], depending on the market price of the Fund’s Common Shares at the time of any such sale. To the extent that the market price per share of the Fund’s Common Shares on any given day is less than the net asset value per share on such day, the Fund will instruct [          ] not to make any sales on such day.

 

The following table sets forth the capitalization of the Fund (i) on an actual basis as of December 31, 2011 (audited) and (ii) on a pro forma basis as adjusted to reflect the assumed sale of [                    ] Common Shares at $[      ] per share (the last reported sale price per share of the Fund’s Common Shares on the NYSE MKT on [                ], 2012), in an offering under this Prospectus Supplement and the accompanying Prospectus.

 

 

 

As of
December 31,
2011
(audited)

 

Pro Forma
(unaudited)

 

 

 

Actual

 

As Adjusted

 

Composition of Net Assets:

 

 

 

 

 

Common stock, par value $0.001 per share, unlimited shares authorized ([              ] shares issued and outstanding as of December 31, 2011 and [              ] shares estimated issued and outstanding as adjusted(1)(2)

 

$

[      ]

 

$

[      ]

 

Paid-in capital in excess of par(2)

 

$

[      ]

 

$

[      ]

 

Accumulated net investment loss

 

$

[      ]

 

$

[      ]

 

Accumulated net realized loss on investments and foreign currency transactions

 

$

[      ]

 

$

[      ]

 

Net unrealized appreciation from investments and foreign currency translations

 

$

[      ]

 

$

[      ]

 

Net Assets

 

$

[      ]

 

$

[      ]

 

 


(1)  The Fund does not hold any of these outstanding shares for its account.

 

(2)  As adjusted, additional paid-in capital reflects the issuance of Common Shares offered hereby ($[                ]), less $0.001 par value per Common Share ($[              ]), less the estimated sales load ($[          ]) and the offering expenses ($[            ]) related to the issuance of shares.

 

S-7



 

PLAN OF DISTRIBUTION

 

Under the sales agreement among the Fund, the Investment Adviser and [          ], upon written instructions from the Fund, [          ] will use its commercially reasonable efforts consistent with its normal trading and sales practices to sell, as the Fund’s agent, the Common Shares under the terms and subject to the conditions set forth in the sales agreement. [          ]’s sales efforts will continue until the Fund instructs [          ] to suspend sales. The Fund will instruct [          ] as to the amount of Common Shares to be sold by [          ]. The Fund may instruct [          ] not to sell Common Shares if the sales cannot be effected at or above the price designated by the Fund in any instruction. The Fund or [          ] may suspend the offering of Common Shares upon proper notice and subject to other conditions.

 

[          ] will provide written confirmation to the Fund no later than the opening of the trading day on the NYSE MKT immediately following the trading day on which Common Shares are sold under the sales agreement.  Each confirmation will include the number of shares sold on the preceding day, the net proceeds to the Fund and the compensation payable by the Fund to [          ] in connection with the sales.

 

The Fund will pay [          ] commissions for its services in acting as agent in the sale of Common Shares. [          ] will be entitled to compensation of between [    ]  and [    ] basis points of the gross sales price per share of any Common Shares sold under the sales agreement, with the exact amount of such compensation to be mutually agreed upon by the Fund and [          ] from time to time. The Fund has also agreed to pay the reasonable fees and expenses of counsel for [          ] in connection with the transactions contemplated under the sales agreement (provided such fees and expenses (a) shall not exceed $50,000 in connection with (i) the preparation and execution of the sales agreement, (ii) the preparation and filing of this Prospectus Supplement, (iii) the preparation and printing of a “Blue Sky Survey” and (iv) the review by the Financial Industry Regulatory Authority (FINRA) of the terms of the sale of the Common Shares and (b) shall not exceed $25,000 on an annual basis in each annual period following the date of the sales agreement). There is no guarantee that there will be any sales of the Fund’s Common Shares pursuant to this Prospectus Supplement and the accompanying Prospectus. Actual sales, if any, of the Fund’s Common Shares under this Prospectus Supplement and the accompanying Prospectus may be less than as set forth in this paragraph. In addition, the price per share of any such sale may be greater or less than the price set forth in this paragraph, depending on the market price of the Fund’s Common Shares at the time of any such sale. Assuming [                  ]of the Fund’s Common Shares offered hereby are sold at a market price of $[      ] per share (the last reported sale price for the Fund’s Common Shares on the NYSE MKT on [                  ], 2012), the Fund estimates that the total expenses for the offering, including reimbursable expenses payable to [          ] as described above and excluding compensation payable to [          ] under the terms of the sales agreement, would be approximately $[              ].

 

Settlement for sales of Common Shares will occur on the third business day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made, or on some other date that is agreed upon by the Fund and [          ] in connection with a particular transaction, in return for payment of the net proceeds to the Fund. There is no arrangement for funds to be received in an escrow, trust or similar arrangement.

 

In connection with the sale of the Common Shares on the Fund’s behalf, [          ] may, and will with respect to sales effected in an “at the market offering,” be deemed to be an “underwriter” within the meaning of the 1933 Act, and the compensation of [          ] may be deemed to be underwriting commissions or discounts. The Fund has agreed to provide indemnification and contribution to [          ] against certain civil liabilities, including liabilities under the 1933 Act.

 

The offering of the Fund’s Common Shares pursuant to the sales agreement will terminate upon the earlier of (1) the sale of all Common Shares subject to the sales agreement or (2) termination of the sales agreement. The sales agreement may be terminated by the Fund in its sole discretion at any time by giving notice to [          ]. In addition, [          ] may terminate the sales agreement under the circumstances specified in the sales agreement and in its sole discretion at any time following a period of 12 months from the date of the sales agreement by giving notice to the Fund.

 

S-8



 

The principal business address of [          ] is [                      ].

 

LEGAL MATTERS

 

Certain legal matters will be passed on by Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019, counsel to the Fund, in connection with the offering of the Common Shares. Willkie Farr & Gallagher LLP will rely as to matters of Maryland law on the opinion of [                      ], [                      ].

 

ADDITIONAL INFORMATION

 

This Prospectus Supplement and the accompanying Prospectus constitute part of a Registration Statement filed by the Fund with the SEC under the 1933 Act and the 1940 Act. This Prospectus Supplement and the accompanying Prospectus omit certain of the information contained in the Registration Statement, and reference is hereby made to the Registration Statement and related exhibits for further information with respect to the Fund and the Common Shares offered hereby. Any statements contained herein concerning the provisions of any document are not necessarily complete, and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement or otherwise filed with the SEC. Each such statement is qualified in its entirety by such reference. The complete Registration Statement may be obtained from the SEC upon payment of the fee prescribed by its rules and regulations or free of charge through the SEC’s web site (http://www.sec.gov).

 

S-9



 

[                        ] Shares of Common Stock

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

PROSPECTUS SUPPLEMENT

 

[                 ,           ]

 

Until [                   ,             ] (25 days after the date of this Prospectus Supplement), all dealers that buy, sell or trade the Common Shares, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters.

 


 


 

The information in this Statement of Additional Information is not complete and may be changed. The Fund may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective.  This Statement of Additional Information is not an offer to sell these securities and is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

One Madison Avenue

New York, New York 10010

 

Statement of Additional Information

 

Subject to Completion, Dated October 25, 2012

 

Credit Suisse Asset Management Income Fund, Inc. (the “Fund”) is a diversified, closed-end management investment company, registered with the U.S. Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940, as amended (“1940 Act”).

 

This Statement of Additional Information (“SAI”) for the Fund is not a prospectus.  It should be read in conjunction with the Fund’s prospectus, dated [        ], 2012 (the “Prospectus”) and any related prospectus supplement.  Capitalized terms used but not defined in this SAI have the meanings ascribed to them in the Prospectus and any related prospectus supplement.

 

A copy of the Prospectus and any related prospectus supplement can be obtained free of charge by calling Credit Suisse Asset Management, LLC at 800-293-1232 or by written request to the Fund at One Madison Avenue, New York, New York 10010.  You can also obtain a copy of the Prospectus or any related prospectus supplement from our website at: www.credit-suisse.com/us.  The Fund’s financial statements for the fiscal year ended December 31, 2011, including the independent registered public accounting firm’s report thereon, and for the six months ended April 30, 2012, are incorporated into this SAI by reference.

 

No person has been authorized to give any information or to make any representations not contained in the Prospectus or any related prospectus supplement or in this SAI in connection with the offering made by the Prospectus and any related prospectus supplement, and, if given or made, such information or representations must not be relied upon as having been authorized by the Fund.  The Prospectus and any related prospectus supplement and the SAI do not constitute an offering by the Fund in any jurisdiction in which such offering may not lawfully be made.

 

1



 

TABLE OF CONTENTS

 

FUND HISTORY

3

 

 

OTHER INVESTMENT PRACTICES

3

 

 

MANAGEMENT OF THE FUND

15

 

 

PRINCIPAL HOLDERS OF SECURITIES

24

 

 

INVESTMENT ADVISER

24

 

 

ADMINISTRATOR

25

 

 

CUSTODIAN, TRANSFER AGENT AND DIVIDEND-PAYING AGENT

25

 

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

26

 

 

PORTFOLIO MANAGEMENT

26

 

 

PORTFOLIO TRANSACTIONS

27

 

 

TAXATION

29

 

 

LEGAL MATTERS

34

 

 

FINANCIAL STATEMENTS

34

 

 

APPENDIX A: Description of Ratings

A-1

 

 

APPENDIX B: Proxy Voting Policies and Procedures

B-1

 

2



 

FUND HISTORY

 

The Fund is a diversified, closed-end management investment company organized as a corporation under the laws of the State of Maryland on February 11, 1987.  Credit Suisse Asset Management, LLC (“Credit Suisse” or the “Adviser”) is the Fund’s investment adviser.

 

OTHER INVESTMENT PRACTICES

 

The Prospectus presents the investment objective and the principal investment policies and risks of the Fund.  This section supplements the disclosure in the Fund’s Prospectus and provides additional information on the Fund’s other investment practices.

 

The Fund may utilize certain investment practices and portfolio management techniques as set forth below.

 

Fixed Income Securities. The Fund may invest in debt securities, including corporate obligations issued by domestic and foreign corporations and governments and money market instruments, without regard to the maturities of such securities.

 

Fixed income securities are broadly characterized as those that provide for periodic payments to the holder of the security at a stated rate. Most fixed income securities, such as bonds, represent indebtedness of the issuer and provide for repayment of principal at a stated time in the future. Others do not provide for repayment of a principal amount, although they may represent a priority over common stockholders in the event of the issuer’s liquidation. Many fixed income securities are subject to scheduled retirement, or may be retired or “called” by the issuer prior to their maturity dates. The interest rate on certain fixed income securities, known as “variable rate obligations,” is determined by reference to or is a percentage of an objective standard, such as a bank’s prime rate, the 90-day Treasury bill rate, or the rate of return on commercial paper or bank certificates of deposit, and is periodically adjusted. Certain variable rate obligations may have a demand feature entitling the holder to resell the securities at a predetermined amount. The interest rate on certain fixed income securities, called “floating rate instruments,” changes whenever there is a change in a designated base rate.

 

The market values of fixed income securities tend to vary inversely with the level of interest rates. When interest rates rise, their values will tend to decline; when interest rates decline, their values generally will tend to rise. The potential for capital appreciation with respect to variable rate obligations or floating rate instruments will be less than with respect to fixed-rate obligations. Long-term instruments are generally more sensitive to these changes than short-term instruments. The market value of fixed income securities and therefore their yield are also affected by the perceived ability of the issuer to make timely payments of principal and interest.

 

The fixed income securities in which the Fund invests primarily will be below investment grade.

 

“Investment grade” is a designation applied to intermediate and long-term corporate debt securities rated within the highest four rating categories assigned by Standard & Poor’s, a subsidiary of The McGraw-Hill Companies, Inc. (“S&P”) (AAA, AA, A or BBB, including the + or — designations) or by Moody’s Investors Service, Inc. (“Moody’s”) (Aaa, Aa, A or Baa, including any numerical designations), or, if unrated, considered by Credit Suisse to be of comparable quality. The ability of the issuer of an investment grade debt security to pay interest and to repay principal is considered to vary from extremely strong (for the highest ratings) through adequate (for the lowest ratings given above), although the lower-rated investment grade securities may be viewed as having speculative elements as well.

 

Those debt securities rated “BBB” or “Baa,” while considered to be “investment grade,” may have speculative characteristics and changes in economic conditions or other circumstances are more likely to lead to a weakened capacity to make principal and interest payments than is the case with higher grade bonds. As a consequence of the foregoing, the opportunities for income and gain may be limited.

 

Below Investment Grade Securities. The Fund invests primarily in fixed income securities rated below investment grade and in comparable unrated securities. Investment in such securities involves substantial risk.

 

3



 

Below investment grade and comparable unrated securities (commonly referred to as “junk bonds” or “high yield securities”) (i) will likely have some quality and protective characteristics that, in the judgment of the rating organization, are outweighed by large uncertainties or major risk exposures to adverse conditions and (ii) are predominantly speculative with respect to the issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligation. The market values of certain of these securities also tend to be more sensitive to individual corporate developments and changes in economic conditions than higher-quality securities. Issuers of such securities are often highly leveraged and may not have more traditional methods of financing available to them so that their ability to service their debt obligations during an economic downturn or during sustained periods of rising interest rates may be impaired. Investors should be aware that ratings are relative and subjective and are not absolute standards of quality.

 

To the extent a secondary trading market for below investment grade securities does exist, it generally is not as liquid as the secondary market for investment grade securities. The lack of a liquid secondary market, as well as adverse publicity and investor perception with respect to these securities, may have an adverse impact on market price and the Fund’s ability to dispose of particular issues when necessary to meet the Fund’s liquidity needs or in response to a specific economic event such as a deterioration in the creditworthiness of the issuer. The lack of a liquid secondary market for certain securities also may make it more difficult for the Fund to obtain accurate market quotations for purposes of valuing the Fund and calculating its net asset value.

 

The market value of securities rated below investment grade is more volatile than that of investment grade securities. Factors adversely impacting the market value of these securities will adversely impact the Fund’s net asset value. The Fund will rely on the judgment, analysis and experience of the Adviser in evaluating the creditworthiness of an issuer. In this evaluation, the Adviser will take into consideration, among other things, the issuer’s financial resources, its sensitivity to economic conditions and trends, its operating history, the quality of the issuer’s management and regulatory matters. The Fund may incur additional expenses to the extent it is required to seek recovery upon a default in the payment of principal or interest on its portfolio holdings of such securities.

 

See Appendix A for a further description of securities ratings.

 

U.S. Government Securities.   The obligations issued or guaranteed by the U.S. government in which the Fund may invest include direct obligations of the U.S. Treasury and obligations issued by U.S. government agencies and instrumentalities.  Included among direct obligations of the United States are Treasury Bills, Treasury Notes and Treasury Bonds, which differ in terms of their interest rates, maturities and dates of issuance.  Treasury Bills have maturities of less than one year, Treasury Notes have maturities of one to 10 years and Treasury Bonds generally have maturities of greater than 10 years at the date of issuance.  Included among the obligations issued by agencies and instrumentalities and government-sponsored enterprises of the United States are: instruments that are supported by the full faith and credit of the United States (such as certificates issued by the Government National Mortgage Association (“GNMA”)); instruments that are supported by the right of the issuer to borrow from the U.S. Treasury (such as securities of Federal Home Loan Banks); and instruments that are supported by the credit of the instrumentality (such as Fannie Mae and Freddie Mac bonds).

 

Fannie Mae and Freddie Mac were previously government-sponsored corporations owned entirely by private stockholders.  Both issue mortgage-related securities that contain guarantees as to timely payment of interest and principal but that are not backed by the full faith and credit of the U.S. government.  In 2008, the U.S. Treasury announced that Fannie Mae and Freddie Mac had been placed in conservatorship by the Federal Housing Finance Agency (“FHFA”), an independent regulator.

 

Other U.S. government securities in which the Fund may invest include securities issued or guaranteed by the Federal Housing Administration, Farmers Home Loan Administration, Export-Import Bank of the United States, Small Business Administration, GNMA, General Services Administration, Central Bank for Cooperatives, Federal Farm Credit Banks, Federal Home Loan Banks, Freddie Mac, Federal Intermediate Credit Banks, Federal Land Banks, Fannie Mae, Maritime Administration, Tennessee Valley Authority, District of Columbia Armory Board and Student Loan Marketing Association.  The Fund may invest in instruments that are supported by the right of the issuer to borrow from the U.S. Treasury and instruments that are supported solely by the credit of the instrumentality or enterprise.  Because the U.S. government is not obligated by law to provide support to an instrumentality it

 

4



 

sponsors, the Fund will invest in obligations issued by such an instrumentality only if Credit Suisse determines that the credit risk with respect to the instrumentality does not make its securities unsuitable for investment by the Fund.

 

Mortgage-Backed Securities. Depending on market conditions, the Fund may invest a substantial portion of its assets in mortgage-backed securities, such as those issued by GNMA, Fannie Mae, Freddie Mac and certain foreign issuers, as well as non-governmental issuers. Non-government issued mortgage-backed securities may offer higher yields than those issued by government entities, but may be subject to greater price fluctuations. Mortgage-backed securities represent direct or indirect participations in, or are secured by and payable from, mortgage loans secured by real property. These securities generally are “pass-through” instruments, through which the holders receive a share of all interest and principal payments from the mortgages underlying the securities, net of certain fees. Some mortgage-backed securities, such as collateralized mortgage obligations (“CMOs”), make payouts of both principal and interest at a variety of intervals; others make semiannual interest payments at a predetermined rate and repay principal at maturity (like a typical bond). The mortgages backing these securities include, among other mortgage instruments, conventional 30-year fixed-rate mortgages, 15-year fixed-rate mortgages, graduated payment mortgages and adjustable rate mortgages. The government or the issuing agency typically guarantees the payment of interest and principal of these securities. However, the guarantees do not extend to the securities’ yield or value, which are likely to vary inversely with fluctuations in interest rates, nor do the guarantees extend to the yield or value of the Fund’s shares.

 

Yields on pass-through securities are typically quoted by investment dealers and vendors based on the maturity of the underlying instruments and the associated average life assumption. The average life of pass-through pools varies with the maturities of the underlying mortgage loans. A pool’s term may be shortened by unscheduled or early payments of principal on the underlying mortgages. The occurrence of mortgage prepayments is affected by various factors, including the level of interest rates, general economic conditions, the location, scheduled maturity and age of the mortgage and other social and demographic conditions. Because prepayment rates of individual pools vary widely, it is not possible to predict accurately the average life of a particular pool. For pools of fixed-rate 30-year mortgages in a stable fixed-rate environment, a common industry practice in the U.S. has been to assume that prepayments will result in a 12-year average life. At present, pools, particularly those with loans with other maturities or different characteristics, are priced on an assumption of average life determined for each pool. In periods of falling interest rates, the rate of prepayment tends to increase, thereby shortening the actual average life of a pool of mortgage-related securities. Conversely, in periods of rising rates the rate of prepayment tends to decrease, thereby lengthening the actual average life of the pool. However, these effects may not be present, or may differ in degree, if the mortgage loans in the pools have adjustable interest rates or other special payment terms, such as a prepayment charge. Actual prepayment experience may cause the yield of mortgage-backed securities to differ from the assumed average life yield. Reinvestment of prepayments may occur at higher or lower interest rates than the original investment, thus affecting the Fund’s yield.

 

The rate of interest on mortgage-backed securities is lower than the interest rates paid on the mortgages included in the underlying pool due to the annual fees paid to the servicer of the mortgage pool for passing through monthly payments to certificate holders and to any guarantor, such as GNMA, and due to any yield retained by the issuer. Actual yield to the holder may vary from the coupon rate, even if adjustable, if the mortgage-backed securities are purchased or traded in the secondary market at a premium or discount. In addition, there is normally some delay between the time the issuer receives mortgage payments from the servicer and the time the issuer makes the payments on the mortgage-backed securities, and this delay reduces the effective yield to the holder of such securities.

 

Foreign Investments .

 

Investors should recognize that investing in foreign companies involves certain risks, including those discussed below, which are in addition to those associated with investing in U.S. issuers. Individual foreign economies may differ favorably or unfavorably from the U.S. economy in such respects as growth of gross national product, rate of inflation, capital reinvestment, resource self-sufficiency, and balance of payments position. The Fund may invest in securities of foreign governments (or agencies or instrumentalities thereof), and many, if not all, of the foregoing considerations apply to such investments as well.

 

5



 

Foreign Currency Exchange. Since the Fund may invest up to 5% of the value of its total assets in securities denominated in currencies of non-U.S. countries, the Fund may be affected favorably or unfavorably by exchange control regulations or changes in the exchange rate between such currencies and the dollar. A change in the value of a foreign currency relative to the U.S. dollar will result in a corresponding change in the dollar value of the Fund assets denominated in that foreign currency. Changes in foreign currency exchange rates may also affect the value of dividends and interest earned, gains and losses realized on the sale of securities and net investment income and gains, if any, to be distributed to shareholders by the Fund. Unless otherwise contracted, the rate of exchange between the U.S. dollar and other currencies is determined by the forces of supply and demand in the foreign exchange markets. Changes in the exchange rate may result over time from the interaction of many factors directly or indirectly affecting economic and political conditions in the U.S. and a particular foreign country, including economic and political developments in other countries. Governmental intervention may also play a significant role. National governments rarely voluntarily allow their currencies to float freely in response to economic forces. Sovereign governments use a variety of techniques, such as intervention by a country’s central bank or imposition of regulatory controls or taxes, to affect the exchange rates of their currencies. The Fund may use hedging techniques with the objective of protecting against loss through the fluctuation of the value of a foreign currency against the U.S. dollar, particularly the forward market in foreign exchange, currency options and currency futures.

 

Information. The majority of the foreign securities held by the Fund will not be registered with, nor will the issuers thereof be subject to reporting requirements of, the SEC. Accordingly, there may be less publicly available information about these securities and about the foreign company or government issuing them than is available about a domestic company or government entity. Foreign companies are generally subject to financial reporting standards, practices and requirements that are either not uniform or less rigorous than those applicable to U.S. companies.

 

Political Instability. With respect to some foreign countries, there is the possibility of expropriation or confiscatory taxation, limitations on the removal of funds or other assets of the Fund, political or social instability, military action, war or domestic developments which could affect U.S. investments in those and neighboring countries. Any of these actions or events could have a severe effect on security prices and impair the Fund’s ability to bring its capital or income back to the United States.

 

Foreign Markets. Securities of some foreign companies are less liquid and their prices are more volatile than securities of comparable U.S. companies. Some countries have less developed securities markets (and related transaction, registration and custody practices). Certain foreign countries are known to experience long delays between the trade and settlement dates of securities purchased or sold which may result in increased exposure to market and foreign exchange fluctuations and increased illiquidity. In addition to losses from such delays, less-developed securities markets could subject the Fund to losses from fraud, negligence, or other actions.

 

Increased Expenses. The operating expenses of the Fund can be expected to be higher than those of an investment company investing exclusively in U.S. securities, since the expenses of the Fund, such as cost of converting foreign currency into U.S. dollars, the payment of fixed brokerage commissions on foreign exchanges, custodial costs, valuation costs and communication costs are higher than those costs incurred by other investment companies not investing in foreign securities. In addition, foreign securities may be subject to foreign government taxes that would reduce the net yield on such securities.

 

Foreign Debt Securities . The returns on foreign debt securities reflect interest rates and other market conditions prevailing in those countries. The relative performance of various countries’ fixed income markets historically has reflected wide variations relating to the unique characteristics of the country’s economy. Year-to-year fluctuations in certain markets have been significant, and negative returns have been experienced in various markets from time to time.

 

The foreign government securities in which the Fund may invest generally consist of obligations issued or backed by national, state or provincial governments or similar political subdivisions or central banks in foreign countries. Foreign government securities also include debt obligations of supranational entities, which include international organizations designated or backed by governmental entities to promote economic reconstruction or development, international banking institutions and related government agencies. Examples include the International

 

6



 

Bank for Reconstruction and Development (the “World Bank”), the Asian Development Bank and the Inter-American Development Bank.

 

Foreign government securities also include debt securities of “quasi-governmental agencies” and debt securities denominated in multinational currency units of an issuer (including supranational issuers). Debt securities of quasi-governmental agencies are issued by entities owned by either a national, state or equivalent government or are obligations of a political unit that is not backed by the national government’s full faith and credit and general taxing powers.

 

Investment in sovereign debt can involve a high degree of risk. The governmental entity that controls the repayment of sovereign debt may not be able or willing to repay the principal and/or interest when due in accordance with the terms of such debt. A governmental entity’s willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the governmental entity’s policy towards the International Monetary Fund and the political constraints to which a governmental entity may be subject. Governmental entities may also be dependent on expected disbursements from foreign governments, multilateral agencies and others abroad to reduce principal and interest arrearages on their debt. The commitment on the part of these governments, agencies and others to make such disbursements may be conditioned on the implementation of economic reforms and/or economic performance and the timely service of such debtor’s obligations. Failure to implement such reforms, achieve such levels of economic performance or repay principal or interest when due may result in the cancellation of such third parties’ commitments to lend funds to the governmental entity, which may further impair such debtor’s ability or willingness to timely service its debts. Consequently, governmental entities may default on their sovereign debt.

 

Holders of sovereign debt may be requested to participate in the rescheduling of such debt and to extend further loans to governmental entities. In the event of a default by a governmental entity, there may be few or no effective legal remedies for collecting on such debt.

 

Emerging Markets. The Fund may invest a portion of its assets in the securities of issuers located in emerging market countries (less developed countries located outside of the United States). Investing in emerging markets involves not only the risks described above with respect to investing in foreign securities, but also other risks, including exposure to economic structures that are generally less diverse and mature than, and to political systems that can be expected to have less stability than, those of developed countries. Other characteristics of emerging markets that may affect investment include certain national policies that may restrict investment by foreigners in issuers deemed sensitive to relevant national interests and the absence of developed structures governing private and foreign investments and private property. The typically small size of the markets of securities of issuers located in emerging markets and the possibility of a low or nonexistent volume of trading in those securities may also result in a lack of liquidity and in price volatility of those securities.

 

Europe — Recent Events . A number of countries in Europe have experienced severe economic and financial difficulties. Many non-governmental issuers, and even certain governments, have defaulted on, or been forced to restructure, their debts; many other issuers have faced difficulties obtaining credit or refinancing existing obligations; financial institutions have in many cases required government or central bank support, have needed to raise capital, and/or have been impaired in their ability to extend credit; and financial markets in Europe and elsewhere have experienced extreme volatility and declines in asset values and liquidity. These difficulties may continue, worsen or spread within and without Europe. Responses to the financial problems by European governments, central banks and others, including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences. Further defaults or restructurings by governments and others of their debt could have additional adverse effects on economies, financial markets and asset valuations around the world. In addition, one or more countries may abandon the euro, the common currency of the European Union, and/or withdraw from the European Union. The impact of these actions, especially if they occur in a disorderly fashion, is not clear but could be significant and far-reaching. These events could negatively affect the value and liquidity of the fund’s investments.

 

7



 

Repurchase Agreements . The Fund may invest in repurchase agreement transactions with member banks of the Federal Reserve System and certain non-bank dealers. Repurchase agreements are contracts under which the buyer of a security simultaneously commits to resell the security to the seller at an agreed-upon price and date. Under the terms of a typical repurchase agreement, the Fund would acquire any underlying security for a relatively short period (usually not more than one week) subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the Fund’s holding period. This arrangement results in a fixed rate of return that is not subject to market fluctuations during the Fund’s holding period. The value of the underlying securities will at all times be at least equal to the total amount of the purchase obligation, including interest. The Fund bears a risk of loss in the event that the other party to a repurchase agreement defaults on its obligations or becomes bankrupt and the Fund is delayed or prevented from exercising its right to dispose of the collateral securities, including the risk of a possible decline in the value of the underlying securities during the period in which the Fund seeks to assert this right. The Adviser monitors the creditworthiness of those bank and non-bank dealers with which the Fund enters into repurchase agreements to evaluate this risk. A repurchase agreement is considered to be a loan under the 1940 Act.

 

Short Sales “Against the Box.” The Fund may enter into short sales “against the box” only if not more than 5% of the Fund’s net assets (taken at current value) are held as collateral for such sales at any one time . A short sale is “against the box” to the extent that the Fund contemporaneously owns or has the right to obtain without additional cost an equal amount of the security being sold short. It may be entered into by the Fund to, for example, lock in a sale price for a security the Fund does not wish to sell immediately. If the Fund engages in a short sale, the collateral for the short position will be segregated in an account with the Fund’s custodian or qualified sub-custodian. While the short sale is open, the Fund will continue to segregate an amount of securities equal in kind and amount to the securities sold short or securities convertible into or exchangeable for such equivalent securities. These securities constitute the Fund’s long position.

 

The Fund may make a short sale as a hedge when it believes that the price of a security may decline and cause a decline in the value of a security owned by the Fund (or a security convertible or exchangeable for such security). In such case, any future losses in the Fund’s long position should be offset by a gain in the short position and, conversely, any gain in the long position should be reduced by a loss in the short position. The extent to which such gains or losses are reduced will depend upon the amount of the security sold short relative to the amount the Fund owns. There will be certain additional transaction costs associated with short sales against the box, but the Fund will endeavor to offset these costs with the income from the investment of the cash proceeds of short sales.

 

Lending of Portfolio Securities .   The Fund may lend securities from its portfolio to brokers, dealers and other financial institutions needing to borrow securities to complete certain transactions.  The Fund continues to be entitled to payments in amounts equal to the interest, dividends or other distributions payable on the loaned securities, which affords the Fund an opportunity to earn interest on the amount of the loan and on the loaned securities’ collateral.  Loans of portfolio securities may not exceed 33-1/3% of the value of the Fund’s total assets, and the SEC currently requires the Fund to receive collateral consisting of cash, U.S. Government securities or irrevocable letters of credit which will be maintained at all times in an amount equal to at least 100% of the current market value of the loaned securities.  According to the SEC, such loans currently must be terminable by the Fund at any time upon specified notice.  The Fund might experience risk of loss if the institution with which it has engaged in a portfolio loan transaction breaches its agreement with the Fund.  In connection with its securities lending transactions, the Fund may return to the borrower or a third party which is acting as a “placing broker,” a part of the interest earned from the investment of collateral received for securities loaned.

 

Generally, the SEC currently requires that the following conditions must be met whenever portfolio securities are loaned: (1) the Fund must receive at least 100% cash or equivalent collateral from the borrower; (2) the borrower must increase such collateral whenever the market value of the securities rises above the level of such collateral; (3) the Fund must be able to terminate the loan at any time; (4) the Fund must receive reasonable interest on the loan, as well as any dividends, interest or other distributions payable on the loaned securities, and any increase in market value; (5) the Fund may pay only reasonable custodian fees in connection with the loan; and (6) while voting rights on the loaned securities may pass to the borrower, the Board of Directors of the Fund (the “Board”) must terminate the loan and regain the right to vote the securities if a material event adversely affecting the investment occurs.  If the regulatory requirements pertaining to portfolio securities lending were to change, the Fund would comply with such changes as required.

 

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Illiquid Securities .   The Fund may invest up to 10% of its total assets in securities subject to legal or contractual restriction, or that are otherwise illiquid.  When purchasing securities that have not been registered under the Securities Act of 1933, as amended, and are not readily marketable, the Fund will endeavor, to the extent practicable, to obtain the right to registration at the expense of the issuer.  Generally, there will be a lapse of time between the Fund’s decision to sell any such security and the registration of the security permitting sale.  During any such period, the price of the securities will be subject to market fluctuations.  However, where a substantial market of qualified institutional buyers has developed for certain unregistered securities purchased by the Fund pursuant to Rule 144A under the Securities Act of 1933, as amended, the Fund intends to treat such securities as liquid securities in accordance with procedures approved by the Board.  Because it is not possible to predict with assurance how the market for specific restricted securities sold pursuant to Rule 144A will develop, the Board has directed Credit Suisse to monitor carefully the Fund’s investments in such securities with particular regard to trading activity, availability of reliable price information and other relevant information.  To the extent that, for a period of time, qualified institutional buyers cease purchasing restricted securities pursuant to Rule 144A, the Fund’s investing in such securities may have the effect of increasing the level of illiquidity in its investment portfolio during such period.  Substantial illiquid positions in the Fund could adversely impact its ability to convert to open-end status.

 

Options on U.S. Government Securities.   The Fund may seek to increase its current income by writing covered call or put options with respect to some or all of the U.S. government securities held in its portfolio. In addition, the Fund may at times, through the writing and purchase of options on U.S. government securities, seek to reduce fluctuations in net asset value by hedging against a decline in the value of its U.S. government securities or an increase in the price of securities which the Fund plans to purchase.

 

Significant option writing opportunities generally exist only with respect to longer term U.S. government securities. The Fund may only write covered options, which means that, so long as the Fund is obligated as the writer of a call option, it will own the underlying securities subject to the option (or comparable securities satisfying the cover requirements of securities exchanges). In the case of put options, the Fund will maintain short term U.S. government securities with a value equal to or greater than the exercise price of the underlying securities. The Fund may also write combinations of covered puts and calls on the same security.

 

The Fund receives a premium from writing a put or call option, which increases return on the underlying security in the event the option expires unexercised or is closed out at a profit. The amount of premium reflects, among other things, the relationship of the market price of the underlying security to the exercise price of the option and the remaining term of the option. The Fund may terminate an option that it has written prior to its expiration by entering into a closing purchase transaction in which it purchases an option having the same terms as the option written. The Fund realizes a profit or loss from a transaction if the cost of the transaction is less or more than the premium received from writing the option. Because increases in the market price of a call option generally reflect increases in the market price of the underlying security, any loss resulting from the repurchase of a call option may be offset in whole or in part by unrealized appreciation of the underlying security.

 

The Fund may purchase put options on U.S. government securities to protect its portfolio holdings in an underlying security against a substantial decline in market value. Such hedge protection is provided during the life of the put option since the Fund, as holder of the put option, is able to sell the underlying security at the put exercise price regardless of any decline in the underlying security’s market price. In order for a put option to be profitable, the market price of the underlying security must decline sufficiently below the exercise price to cover the premium and transaction costs.

 

The Fund may purchase call options on U.S. government securities to hedge against an increase in prices of securities that the Fund ultimately wants to buy. Such hedge protection is provided during the life of the call option since the Fund, as holder of the option, is able to buy the underlying security at the exercise price regardless of any increase in such security’s market price. In order for a call option to be profitable, the market price of the underlying security must rise sufficiently above the exercise price to cover the premium and transaction costs.

 

The Fund will not purchase put and call options if as a result more than 5% of the value of its total assets would at the time be invested in such options.

 

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Interest Rate Futures and Related Options.   The Fund may enter into interest rate futures contracts to purchase or sell U.S. government securities or other interest rate-sensitive instruments and options thereon that are traded on U.S. futures exchanges or other trading facilities. When the Fund attempts to hedge its portfolio by selling an interest rate futures contract, purchasing a put option thereon, or writing a call option thereon, it will own an amount of U.S. government securities corresponding to the open futures or option position thereby ensuring that the position is unleveraged.  These transactions may be entered into for “bona fide hedging” purposes as defined in Commodity Futures Trading Commission (“CFTC”) regulations and other permissible purposes, including hedging against changes in the value of portfolio securities due to anticipated changes in interest rates and/or market conditions and increasing return.  The Fund reserves the right to engage in transactions involving futures contracts and options on futures contracts in accordance with the Fund’s policies.  The Fund is operated by a person who has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act with respect to the Fund, and therefore, who is not subject to registration or regulation as a pool operator under the Commodity Exchange Act.

 

Interest rate futures contracts are contracts that obligate the buyer to take and the seller to make delivery at a future date of a specified quantity of the underlying financial instrument. However, some interest rate futures contracts provide for settlement in cash rather than by delivery of the securities underlying the contract. Interest rate futures contracts are currently available on several types of fixed income securities, including U.S. Treasury Bonds, U.S. Treasury Notes and GNMA securities on The Chicago Board of Trade, and on U.S. Treasury Bills on the International Monetary Market Division of The Chicago Mercantile Exchange.

 

A call option for a futures contract gives the purchaser, in return for a premium paid, the right to buy the futures contract underlying the option at a specified exercise price at any time during the term of the option. The writer of the call option, who receives the premium, has the obligation, upon exercise of the option, to deliver the underlying futures contract against payment of the exercise price. A put option for a futures contract gives the purchaser, in return for a premium, the right to sell the underlying futures contract at a specified price during the term of the option. The writer of the put, who receives the premium, has the obligation to buy the underlying futures contract upon demand at the exercise price.

 

In contrast to the purchase or sale of a security, the full purchase price of the futures contract is not paid or received by the Fund upon its purchase or sale. Instead, the Fund will deposit in a segregated custodial account as initial margin an amount of cash or U.S. Treasury bills equal to approximately 5% of the value of the contract. This amount is known as initial margin. The nature of initial margin in futures transactions is different from that of margin in security transactions in that futures contract margin does not involve the borrowing of funds by the customer to finance the transactions. Rather, the initial margin is in the nature of a performance bond or good faith deposit on the contract which is returned to the Fund upon termination of the futures contract assuming all contractual obligations have been satisfied. Subsequent payments to and from the broker, called variation margin, will be made on a daily basis as the price of the underlying security fluctuates, making the long and short positions in the futures contract more or less valuable, a process known as “mark to the market.” For example, when the Fund has purchased an interest rate futures contract and the price of the underlying security has risen, that position will have increased in value and the Fund will receive from the broker a variation margin payment equal to that increase in value. Conversely, where the Fund has purchased an interest rate futures contract and the price of the underlying security has declined, the position would be less valuable and the Fund would be required to make a variation margin payment to the broker. At any time prior to expiration of the futures contract, the Fund may elect to terminate the position by taking an opposite position. A final determination of variation margin is then made, additional cash is required to be paid by or released to the Fund, and the Fund realizes a loss or gain. No assurance can be given that the Fund will be able to take an opposite position.

 

The purpose of selling an interest rate futures contract is to protect a portfolio from fluctuations in asset value resulting from interest rate changes. Selling a futures contract has an effect similar to selling portfolio securities. If interest rates were to increase, the value of the securities in the portfolio would decline, but the value of the Fund’s futures contracts would increase, thereby keeping the net asset value of the Fund from declining as much as it otherwise might have. In this way, selling futures contracts acts as a hedge against the effects of rising interest rates. However, a decline in interest rates resulting in an increase in the value of portfolio securities tends to be offset by a decrease in the value of the corresponding futures contracts.

 

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Similarly, when interest rates are expected to decline, futures contracts may be purchased to hedge against anticipated subsequent purchases of portfolio securities at higher prices. By buying futures, the Fund could effectively hedge against an increase in the price of the securities it intends to purchase at a later date in order to permit the purchase to be effected in an orderly manner. At that time, the futures contracts could be liquidated at a profit if rates had in fact declined as expected, and the Fund’s cash position could be used to purchase securities.

 

Although most interest rate futures contracts call for making or taking delivery of the underlying securities, these obligations are typically canceled or closed out before the scheduled settlement date. The closing is accomplished by purchasing (or selling) an identical futures contract to offset a short (or long) position. Such an offsetting transaction cancels the contractual obligations established by the original futures transaction. If the price of an offsetting futures transaction varies from the price of the original futures transaction, the Fund will realize a gain or loss corresponding to the difference. That gain or loss will tend to offset the unrealized loss or gain on the hedged securities transaction, but may not always or completely do so.

 

The selection of futures and options strategies requires skills different from those needed to select portfolio securities; however, Credit Suisse does have experience in the use of futures and options.

 

Regulatory Aspects of Derivatives Instruments .   Pursuant to a notice of eligibility filed with the CFTC, the Fund is not deemed to be a “commodity pool operator” under the Commodity Exchange Act, and therefore is not subject to registration as such under the Commodity Exchange Act.  The Adviser is not required to be registered as a “commodity trading advisor” with respect to its service as the investment adviser to the Fund.

 

Transactions in options by the Fund are subject to limitations established by each of the exchanges governing the maximum number of options that may be written or held by a single investor or group of investors acting in concert, regardless of whether the options were written or purchased on the same or different exchanges or are held in one or more accounts or through one or more exchanges or brokers.  Thus, the number of options the Fund may write or hold may be affected by options written or held by other entities, including other investment companies having the same or an affiliated investment adviser.  Position limits also apply to futures.  An exchange may order the liquidation of positions found to be in violation of those limits and may impose certain other sanctions.  With respect to futures contracts that are not contractually required to “cash-settle” and which the Fund’s Board has not determined to treat as “cash-settled,” the Fund covers its open positions by setting aside liquid assets equal to the contracts’ full notional value.  With respect to futures contracts that are contractually required to “cash-settle” and those which the Board has determined to treat as “cash-settled” (including currency forwards that settle in currencies of G-10 countries), however, the Fund sets aside liquid assets in an amount equal to that Fund’s daily mark-to-market (net) obligation (i.e., the Fund’s daily net liability, if any), rather than the notional value.

 

Asset Coverage for Certain Derivative Transactions .   The Fund will comply with guidelines established by the SEC with respect to coverage of certain derivative transactions.  These guidelines may, in certain instances, require segregation by the Fund of cash or liquid securities with its custodian or a designated sub-custodian to the extent the Fund’s obligations with respect to these strategies are not otherwise “covered” through ownership of the underlying security, financial instrument or currency or by other portfolio positions or by other means consistent with applicable regulatory policies.  Segregated assets cannot be sold or transferred unless equivalent assets are substituted in their place or it is no longer necessary to segregate them.  As a result, there is a possibility that segregation of a large percentage of the Fund’s assets could impede portfolio management or the Fund’s ability to meet other current obligations.

 

For example, a call option written by the Fund on securities may require the Fund to hold the securities subject to the call (or securities convertible into the securities without additional consideration) or to segregate assets (as described above) sufficient to purchase and deliver the securities if the call is exercised.  A call option written by the Fund on an index may require the Fund to own portfolio securities that correlate with the index or to segregate assets (as described above) equal to the excess of the index value over the exercise price on a current basis. A put option written by the Fund may require the Fund to segregate assets (as described above) equal to the exercise price.  The Fund could purchase a put option if the strike price of that option is the same or higher than the strike price of a put option sold by the Fund.  If the Fund holds a futures or forward contract, the Fund could purchase a put option on the same futures or forward contract with a strike price as high or higher than the price of the contract held.  The Fund may enter into fully or partially offsetting transactions so that its net position, coupled with any segregated

 

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assets (equal to any remaining obligation), equals its net obligation.  Asset coverage may be achieved by other means when consistent with applicable regulatory policies.

 

Foreign Currency Exchange Transactions .   The Fund may engage in foreign currency exchange transactions to protect against changes in future exchange rates. The Fund will only engage in foreign  currency exchange transactions for transaction hedging (in connection with the purchase or sale of portfolio securities) or position hedging (to protect the value of a specific portfolio position). The Fund may engage in U.S. dollar-denominated or non-U.S. dollar denominated hedging. The Fund’s ability to engage in hedging and related option transactions may be limited by tax considerations. See “Taxation” below.

 

The Fund may engage in “transaction hedging” to protect against a change in the foreign currency exchange rate between the date on which it contracts to purchase or sell the security and the settlement date, or to “lock in” the U.S. dollar equivalent of a dividend or interest payment in a foreign currency. For that purpose, the Fund may purchase or sell a foreign currency on a spot (or cash) basis at the prevailing spot rate in connection with the settlement of transactions in portfolio securities denominated in that foreign currency. The Fund may also enter into forward currency exchange contracts and purchase exchange-listed and over-the-counter call and put options on foreign currency futures contracts and on foreign currencies. A foreign currency forward contract is a negotiated agreement to exchange currency at a future time at a rate or rates that may be higher or lower than the spot rate. Foreign currency futures contracts are standardized exchange-traded contracts and have margin requirements.

 

For transaction hedging purposes, the Fund may also purchase exchange-listed and over-the-counter call and put options on foreign currency futures contracts and on foreign currencies. A put option on a futures contract gives the Funds the right to assume a short position in the futures contract until expiration of the option. A put option on currency gives the Funds the right to sell a currency at an exercise price until the expiration of the option. A call option on a futures contract gives the Fund the right to assume a long position in the futures contract until the expiration of the option. A call option on currency gives the Fund the right to purchase a currency at the exercise price until the expiration of the option.

 

The Fund may engage in “position hedging” to protect against the decline in the value relative the U.S. dollar of the currencies in which its portfolio securities are denominated or quoted (or an increase in the value of currency for securities which the portfolio intends to buy, when it holds cash reserves and short term investments). For position hedging purposes the Fund may purchase or sell foreign currency futures contracts and foreign currency forward contracts, and may purchase put or call options on foreign currency futures contracts and on foreign currencies on exchanges or over-the-counter markets. In connection with position hedging, the Fund may also purchase or sell foreign currency on a spot basis.

 

Hedging transactions involves costs and may result in losses. The Fund may write covered call options on foreign currencies to offset some of the costs of hedging those currencies. The Fund engages in over-the-counter transactions only when appropriate exchange-traded transactions are unavailable and when, in the opinion of Credit Suisse, the pricing mechanism and liquidity are satisfactory and the participants are responsible parties likely to meet their contractual obligations.

 

Positions in foreign currency futures contracts may be closed out only on an exchange or board of trade that provides a secondary market in such contracts. The Fund intends to purchase or sell foreign currency futures contracts only on exchanges or boards of trade where there appears to be an active secondary market.

 

The Fund may enter into forward foreign currency exchange contracts (an obligation to purchase or sell a specific currency at a future date) solely for hedging or other appropriate risk management purposes as defined in regulations of the Commodities Futures Trading Commission.

 

The Fund may also write or purchase options on foreign currencies. Such options are purchased or written only when Credit Suisse believes that a liquid secondary market exists for such options. There can be no assurance that a liquid secondary market will exist for a particular option at any specific time. If the Fund sells call options on foreign currencies, it may cover by holding that currency or by holding a separate call option on the currency with a strike price no higher than that of the call option sold.

 

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Senior Loans. Senior secured floating rate loans (“Senior Loans”) are loans and loan participations (collectively, “Loans”) that are senior secured floating rate Loans. Senior Loans are made to corporations and other non-governmental entities and issuers. Senior Loans typically hold the most senior position in the capital structure of the issuing entity, are typically secured with specific collateral and typically have a claim on the assets and/or stock of the borrower that is senior to that held by subordinated debt holders and stockholders of the borrower. The proceeds of Senior Loans primarily are used to finance leveraged buyouts, recapitalizations, mergers, acquisitions, stock repurchases, dividends, and, to a lesser extent, to finance internal growth and for other corporate purposes. Senior Loans typically have rates of interest that are determined daily, monthly, quarterly or semi-annually by reference to a base lending rate, plus a premium or credit spread. Base lending rates in common usage today are primarily the London Interbank Offered Rate (“LIBOR”), and secondarily the prime rate offered by one or more major U.S. banks (the “Prime Rate”) and the certificate of deposit (“CD”) rate or other base lending rates used by commercial lenders.

 

The risks associated with Senior Loans of below investment grade quality are similar to the risks of bonds rated below investment grade, although Senior Loans are typically senior and secured in contrast to bonds rated below investment grade, which are generally subordinated and unsecured. Senior Loans’ higher standing has historically resulted in generally higher recoveries in the event of a corporate reorganization. In addition, because their interest payments are adjusted for changes in short-term interest rates, investments in Senior Loans generally have less interest rate risk than below-investment-grade rated bonds. The Fund’s investments in Senior Loans are expected to typically be below investment grade, which are considered speculative because of the credit risk of their issuers. Such companies are more likely to default on their payments of interest and principal owed to the Fund, and such defaults could reduce the Fund’s net asset value and income distributions. An economic downturn generally leads to a higher non-payment rate, and a debt obligation may lose significant value before a default occurs. Moreover, any specific collateral used to secure a Loan may decline in value or become illiquid, which would adversely affect the Loan’s value.

 

Like other debt instruments, Senior Loans are subject to the risk of non-payment of scheduled interest or principal. Such non-payment would result in a reduction of income to the Fund, a reduction in the value of the investment and a potential decrease in the net asset value per share of the Fund. There can be no assurance that the liquidation of any collateral securing a Loan would satisfy the borrower’s obligation in the event of non-payment of scheduled interest or principal payments, or that such collateral could be readily liquidated. Senior Loans are also subject to heightened prepayment risk, as they usually have mandatory and optional prepayment provisions. In the event of bankruptcy of a borrower, the Fund could experience delays or limitations with respect to its ability to realize the benefits of the collateral securing a Senior Loan. The collateral securing a Senior Loan may lose all or substantially all of its value in the event of bankruptcy of a borrower. In the event of default, the Fund may have difficulty collecting on any collateral. Some Senior Loans are subject to the risk that a court, pursuant to fraudulent conveyance or other similar laws, could subordinate such Senior Loans to presently existing or future indebtedness of the borrower or take other action detrimental to the holders of Senior Loans including, in certain circumstances, invalidating such Senior Loans or causing interest previously paid to be refunded to the borrower. Due to the above factors, a collateralized Senior Loan may not be fully collateralized and may decline significantly in value. If interest were required to be refunded, it could negatively affect the Fund’s performance.

 

The Fund may purchase and retain in its portfolio Senior Loans where the borrowers have experienced, or may be perceived to be likely to experience, credit problems, including default, involvement in or recent emergence from bankruptcy reorganization proceedings or other forms of debt restructuring. At times, in connection with the restructuring of a Senior Loan either outside of bankruptcy court or in the context of bankruptcy court proceedings, the Fund may determine or be required to accept equity securities or junior debt securities in exchange for all or a portion of a Senior Loan. Senior Loans in which the Fund will invest may not be rated by a nationally recognized statistical ratings organization (“NRSRO”), may not be registered with the SEC or any state securities commission, and may not be listed on any national securities exchange. The amount of public information available with respect to Senior Loans may be less extensive than available for registered or exchange-listed securities. In evaluating the creditworthiness of borrowers, the Adviser will consider, and may rely in part, on analyses performed by others.

 

Borrowers may have outstanding debt obligations that are rated below investment grade by a NRSRO. Most of the Senior Loans held by the Fund will have been assigned ratings below investment grade by a NRSRO. In the event Senior Loans are not rated, they are likely to be the equivalent of below investment grade quality. The

 

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Fund will rely on the judgment, analysis and experience of the Adviser in evaluating the creditworthiness of a borrower. In this evaluation, the Adviser will take into consideration, among other things, the borrower’s financial resources, its sensitivity to economic conditions and trends, its operating history, the quality of the borrower’s management and regulatory matters.

 

No active trading market may exist for some Senior Loans and some Senior Loans may be subject to restrictions on resale. Secondary markets may be subject to irregular trading activity, wide bid/ask spreads and extended trade settlement periods, which may impair the ability to realize full value and thus cause a decline in the Fund’s net asset value. During periods of limited demand and liquidity for Senior Loans, the Fund’s net asset value may be adversely affected.

 

Although changes in prevailing interest rates can be expected to cause some fluctuations in the value of Senior Loans (due to the fact that floating rates on Senior Loans only reset periodically), the value of Senior Loans tends to be substantially less sensitive to changes in market interest rates than fixed-rate instruments. Nevertheless, a sudden and significant increase in market interest rates may cause a decline in the value of these investments and an associated decline in the Fund’s net asset value.

 

Other factors (including, but not limited to, rating downgrades, credit deterioration, a large downward movement in stock prices, a disparity in supply and demand of certain investments or market conditions that reduce liquidity) can reduce the value of Senior Loans and other debt obligations, impairing the Fund’s net asset value.

 

The Fund may purchase Senior Loans by assignment from a participant in the original syndicate of lenders or from subsequent assignees of such interests, or can buy a participation in a loan. The Fund may also purchase participations in the original syndicate making Senior Loans. Loan participations typically represent indirect participations in a loan to a corporate borrower, and generally are offered by banks or other financial institutions or lending syndicates. When purchasing loan participations, the Fund assumes the credit risk associated with the corporate borrower and may assume the credit risk associated with an interposed bank or other financial intermediary. The Fund will acquire participations only if the lender interpositioned between the Fund and the borrower is determined by the Adviser to be creditworthy. In circumstances where the Fund is a participant in a loan, it does not have any direct claim on the loan or any rights of set-off against the borrower and may not benefit directly from any collateral supporting the loan. In these situations, the Fund is subject to the credit risk of both the borrower and the lender that is selling the participation. In the event of the insolvency of the lender selling a participation, the Fund may be treated as a general creditor of the lender and may not benefit from any set-off between the lender and the borrower.

 

Economic and other events (whether real or perceived) can reduce the demand for certain Senior Loans or Senior Loans generally, which may reduce market prices and cause the Fund’s net asset value per share to fall. The frequency and magnitude of such changes cannot be predicted.

 

Loans and other debt instruments are also subject to the risk of price declines due to increases in prevailing interest rates, although floating-rate debt instruments are less exposed to this risk than fixed-rate debt instruments. Interest rate changes may also increase prepayments of debt obligations and require the Fund to invest assets at lower yields. No active trading market may exist for certain Loans, which may impair the ability of the Fund to realize full value in the event of the need to liquidate such assets.

 

Adverse market conditions may impair the liquidity of some actively traded Loans.

 

Second Lien and Other Secured Loans. “Second Lien Loans” are “second lien” secured floating rate Loans made by public and private corporations and other non-governmental entities and issuers for a variety of purposes. Second Lien Loans are second in right of payment to one or more Senior Loans of the related borrower. Second Lien Loans typically are secured by a second priority security interest or lien to or on specified collateral securing the borrower’s obligation under the Loan and typically have similar protections and rights as Senior Loans. Second Lien Loans are not (and by their terms cannot) become subordinated in right of payment to any obligation of the related borrower other than Senior Loans of such borrower. Second Lien Loans, like Senior Loans, typically have adjustable floating rate interest payments. Because Second Lien Loans are second to Senior Loans, they present a greater degree of investment risk but often pay interest at higher rates reflecting this additional risk.

 

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The Fund may also invest in secured Loans other than Senior Loans and Second Lien Loans. Such secured Loans are made by public and private corporations and other non-governmental entities and issuers for a variety of purposes, and may rank lower in right of payment to one or more Senior Loans and Second Lien Loans of the borrower. Such secured Loans typically are secured by a lower priority security interest or lien to or on specified collateral securing the borrower’s obligation under the Loan, and typically have more subordinated protections and rights than Senior Loans and Second Lien Loans. Secured Loans may become subordinated in right of payment to more senior obligations of the borrower issued in the future. Such secured Loans may have fixed or adjustable floating rate interest payments. Because other secured Loans rank in payment order behind Senior Loans and Second Lien Loans, they present a greater degree of investment risk but often pay interest at higher rates reflecting this additional risk.

 

Second Lien Loans and other secured Loans generally are of below investment grade quality. Other than their subordinated status, Second Lien Loans and other secured Loans have many characteristics similar to Senior Loans discussed above. As in the case of Senior Loans, the Fund may purchase interests in Second Lien Loans and other secured Loans through assignments or participations.

 

Second Lien Loans and other secured Loans are subject to the same risks associated with investment in Senior Loans and bonds rated below investment grade. However, because Second Lien Loans are second in right of payment to one or more Senior Loans of the related borrower, and other secured Loans rank lower in right of payment to Second Lien Loans, they are subject to the additional risk that the cash flow of the borrower and any property securing the Loan may be insufficient to meet scheduled payments after giving effect to the more senior secured obligations of the borrower. Second Lien Loans and other secured Loans also are expected to have greater price volatility than Senior Loans and may be less liquid. There also is a possibility that originators will not be able to sell participations in Second Lien Loans and other secured Loans, which would create greater credit risk exposure.

 

MANAGEMENT OF THE FUND

 

The Fund’s business and affairs are managed under the direction of the Fund’s Board of Directors, including the supervision of duties performed for the Fund under the investment advisory agreement with Credit Suisse (the “Investment Advisory Agreement”).  The Directors set broad policies for the Fund and choose its officers, who serve at the Board’s discretion.  The Board currently consists of five Directors, all of which are not “interested persons” as defined in Section 2(a)(19) of the 1940 Act (“Independent Directors”).  The Board of Directors is divided into three classes, each having a term of three years.  Each year the term of office of one class expires and the successor or successors elected to such class will serve for a three-year term.  Shareholders who wish to send communications to the Board should send them to the address of the Fund (One Madison Avenue, New York, New York 10010) and to the attention of the Board c/o the Secretary of the Fund.  All such communications will be directed to the Director’s attention.

 

Directors

 

The following table includes information regarding the Fund’s Directors, their principal occupations and other affiliations during the past five years, the number of portfolios in the Fund Complex that they oversee, and other information about them.  The Fund Complex includes those registered investment companies that share Credit Suisse as investment adviser and that hold themselves out to the public as related companies for purposes of investment and investor services.

 

15



 

Name, Address
(Year of Birth)

 

Position(s)
Held with
Fund

 

Term of
Office and
Length of
Time
Served

 

Principal
Occupation(s)
During Past
Five Years

 

Number
of Funds
in Fund
Complex
Overseen
By
Director

 

Other Directorships Held
by Director During Past
Five Years

 

 

 

 

 

 

 

 

 

 

 

Independent Directors

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enrique Arzac

c/o Credit Suisse Asset Management, LLC

Attn: General Counsel

One Madison Avenue

New York, New York 10010

(1941)

 

Director, Audit Committee Chairman and Nominating Committee Member

 

Since 1990; current term ends at the 2013 annual meeting

 

Professor of Finance and Economics, Graduate School of Business, Columbia University since 1971.

 

9

 

Director of Epoch Holding Corporation (an investment management and investment advisory services company); Director of The Adams Express Company, Director of Petroleum and Resources Corporation, Aberdeen Chile Fund, Inc., Aberdeen Indonesia Fund, Inc., Aberdeen Israel Fund, Inc., Aberdeen Latin America Equity Fund, Inc. and Aberdeen Emerging Markets Telecommunications and Infrastructure Fund, Inc. (each a closed-end investment company); Director of Aberdeen Asia-Pacific Income Investment Company Limited (a Canadian closed-end fund); Director of Starcomms PLC (telecommunications company) from 2008 to 2011; Director of Mirae Asset Discovery Funds (open-end investment companies).

 

 

 

 

 

 

 

 

 

 

 

Terry F. Bovarnick

c/o Credit Suisse Asset Management, LLC

Attn: General Counsel

One Madison Avenue

New York, New York 10010

(1958)

 

Director, Audit Committee and Nominating Committee Member

 

Since 2006; current term ends at the 2013 annual meeting

 

Currently retired.

 

2

 

None

 

 

 

 

 

 

 

 

 

 

 

James J. Cattano

c/o Coastal Trade Corp.

999 Vanderbilt Beach Road

Suite 200

Naples, Florida 34108

(1943)

 

Director; Audit Committee and Nominating Committee

 

Since 2006; current term ends at the 2014 annual

 

President of Coastal Trade Corp. since October 2011; President, Primary

 

2

 

Director of Aberdeen Chile Fund, Inc., Aberdeen Indonesia Fund, Inc., Aberdeen Israel Fund, Inc., Aberdeen Latin America Equity Fund, Inc. and

 

16



 

Name, Address
(Year of Birth)

 

Position(s)
Held with
Fund

 

Term of
Office and
Length of
Time
Served

 

Principal
Occupation(s)
During Past
Five Years

 

Number
of Funds
in Fund
Complex
Overseen
By
Director

 

Other Directorships Held
by Director During Past
Five Years

 

 

Member

 

meeting

 

Resources, Inc. (an international trading and manufacturing company specializing in the sale of agricultural commodities throughout Latin American markets) from October 1996 to October 2011.

 

 

 

Aberdeen Emerging Markets Telecommunications and Infrastructure Fund, Inc. (each a closed-end investment company)/

 

 

 

 

 

 

 

 

 

 

 

Lawrence J. Fox

c/o Credit Suisse Asset Management, LLC

Attn: General Counsel

One Madison Avenue

New York, New York 10010

 (1943)

 

Director and Nominating Committee Member

 

Since 1990; current term ends at the 2015 annual meeting

 

Partner of Drinker Biddle & Reath (law firm) since 1972; Lecturer at Yale Law School since 2008.

 

2

 

Director of Aberdeen Chile Fund, Inc., Aberdeen Indonesia Fund, Inc., Aberdeen Israel Fund, Inc. and Aberdeen Latin America Equity Fund, Inc. (each a closed-end investment company); Director of Dynasil Corporation (a manufacturing company)

 

17



 

Name, Address
(Year of Birth)

 

Position(s)
Held with
Fund

 

Term of
Office and
Length of
Time
Served

 

Principal
Occupation(s)
During Past
Five Years

 

Number
of Funds
in Fund
Complex
Overseen
By
Director

 

Other Directorships Held
by Director During Past
Five Years

Steven N. Rappaport

Lehigh Court, LLC

555 Madison Avenue

29th Floor

New York, New York 10022

(1948)

 

Chairman of the Board of Directors; Nominating Committee Chairman and Audit Committee Member

 

Since 2005; Chairman since 2012; current term ends at the 2014 annual meeting

 

Partner of Lehigh Court, LLC and RZ Capital (private investment firms) from July 2002 to present.

 

9

 

Director of iCAD, Inc. (surgical and medical instruments and apparatus company); Director of Presstek, Inc. (digital imaging technologies company); Director of Wood Resources, LLC. (plywood manufacturing company); Director of Aberdeen Chile Fund, Inc., Aberdeen Indonesia Fund, Inc., Aberdeen Israel Fund, Inc., Aberdeen Latin America Equity Fund, Inc. and Aberdeen Emerging Markets Telecommunications and Infrastructure Fund, Inc. (each a closed-end investment company).

 

As of [              ], none of the Directors or their immediate family members owned beneficially or of record any class of securities in Credit Suisse or in a person (other than a registered investment company) directly or indirectly controlling, controlled by or under common control with Credit Suisse.

 

Officers

 

The following tables set forth certain information regarding the officers of the Fund.  The current terms of office of the Fund’s officers will end at the Board’s meeting following the Fund’s next annual meeting of shareholders.

 

Name, Address
(Year of Birth)

 

Position(s) Held
with Fund

 

Term of Office and
Length of Time Served

 

Principal Occupation During
Past 5 Years

 

 

 

 

 

 

 

John G. Popp

Credit Suisse Asset

Management, LLC

One Madison Avenue

New York, New York 10010

(1956)

 

Chief Executive Officer and President

 

Since 2010

 

Managing Director of Credit Suisse; Group Manager and Senior Portfolio Manager for Performing Credit Strategies; Associated with Credit Suisse since 1997; Officer of other Credit Suisse Funds.

 

 

 

 

 

 

 

Thomas J. Flannery

Credit Suisse Asset

Management, LLC

One Madison Avenue

New York, New York 10010

(1974)

 

Chief Investment Officer

 

Since 2010

 

Managing Director of Credit Suisse; Associated with Credit Suisse Group AG since 2000; Officer of other Credit Suisse Funds.

 

18



 

Name, Address
(Year of Birth)

 

Position(s) Held
with Fund

 

Term of Office and
Length of Time Served

 

Principal Occupation During
Past 5 Years

 

 

 

 

 

 

 

Emidio Morizio

Credit Suisse Asset

Management, LLC

One Madison Avenue

New York, New York 10010

(1966)

 

Chief Compliance Officer

 

Since 2004

 

Managing Director and Global Head of Compliance of Credit Suisse since 2012; Director and Global Head of Compliance of Credit Suisse from January 2005 to December 2009; Associated with Credit Suisse since July 2000; Officer of other Credit Suisse Funds.

 

 

 

 

 

 

 

Thomas M. Sipp

Credit Suisse Asset

Management, LLC

One Madison Avenue New York, New York 10010 (1970)

 

Chief Financial Officer

 

Since 2012

 

Managing Director of Credit Suisse; Chief Operating Officer and Head of Finance for Asset Management; Associated with Credit Suisse since 2009; Associated with Pyramis Global Advisors from 2006 to 2009; Officer of other Credit Suisse Funds.

 

 

 

 

 

 

 

Roger Machlis

Credit Suisse Asset

Management, LLC

One Madison Avenue

New York, New York 10010

(1961)

 

Chief Legal Officer

 

Since 2010

 

Managing Director and General Counsel for Asset Management; Associated with Credit Suisse since 1997; Officer of other Credit Suisse Funds.

 

 

 

 

 

 

 

Cecilia Chau

Credit Suisse Asset

Management, LLC

One Madison Avenue

New York, New York 10010

(1973)

 

Treasurer

 

Since 2008

 

Vice President of Credit Suisse since 2009; Assistant Vice President of Credit Suisse from June 2007 to December 2008; Associated with Alliance Bernstein L.P. from January 2007 to May 2007; Associated with Credit Suisse from August 2000 to December 2006; Officer of other Credit Suisse Funds.

 

 

 

 

 

 

 

Karen Regan

Credit Suisse Asset Management, LLC

One Madison Avenue

New York, New York 10010

(1963)

 

Senior Vice President and Secretary

 

Since 2010

 

Vice President of Credit Suisse; Associated with Credit Suisse since December 2004; Officer of other Credit Suisse Funds.

 

Board Meetings

 

During the fiscal year ended December 31, 2011, the Board convened five times.  Each Director attended at least seventy-five percent of the aggregate number of meetings of the Board and any committees on which he or she served during the period for which he or she was a Director.

 

19



 

Audit Committee

 

All of the Directors, except for Lawrence Fox, constitute the Fund’s Audit Committee, which is composed of Directors who are not interested persons of the Fund and who are independent (as such term is defined by the listing standards of the NYSE MKT).  The Audit Committee convened three times during the fiscal year ended December 31, 2011.  The Audit Committee advises the full Board with respect to accounting, auditing and financial matters affecting the Fund.  Pursuant to the Audit Committee Charter adopted by the Fund’s Board (a copy of which was included as Appendix B to the Fund’s proxy statement dated March 15, 2010), the Audit Committee is responsible for conferring with the Fund’s independent registered public accounting firm, reviewing annual financial statements, approving the selection of the Fund’s independent registered public accounting firm and overseeing the Fund’s internal controls.  The Fund’s Audit Committee Charter also contains provisions relating to the pre-approval by the Audit Committee of certain non-audit services to be provided by the Fund’s independent registered public accounting firm to the Fund and to Credit Suisse and certain of its affiliates.

 

Nominating Committee

 

All of the Directors constitute the Fund’s Nominating Committee, which is composed of Directors who are not interested persons of the Fund and who are independent (as such term is defined by the listing standards of NYSE MKT).  The Nominating Committee met three times during the fiscal year ended December 31, 2011.  The Nominating Committee selects and nominates new Directors.  The Board has adopted a Nominating Committee Charter (a copy of which was included as Appendix A to the Fund’s proxy statement dated March 15, 2010).  In nominating candidates, the Nominating Committee will take into consideration such factors as it deems appropriate.  These factors may include judgment, skill, diversity, experience with investment companies and other organizations of comparable purpose, complexity, size and subject to similar legal restrictions and oversight, the interplay of the candidate’s experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any committees thereof.  With respect to diversity, the Nominating Committee considers whether a candidate’s background, experience and skills will contribute to the diversity of the Board.

 

The Nominating Committee will consider candidates submitted by shareholders or from other sources it deems appropriate.  Any recommendation should be submitted to the Secretary of the Fund, c/o Credit Suisse Asset Management, LLC, One Madison Avenue, New York, New York 10010.  Any submission should include at a minimum the following information: As to each individual proposed for election or re-election as Director, the name, age, business address, residence address and principal occupation or employment of such individual, the class, series and number of Shares of the Fund that are beneficially owned by such individual, the date such shares were acquired and the investment intent of such acquisition, whether such shareholder believes such individual is, or is not, an “interested person” of the Fund (as defined in the 1940 Act), and information regarding such individual that is sufficient, in the discretion of the Nominating Committee, to make such determination, and all other information relating to such individual that is required to be disclosed in solicitation of proxies for election of Directors in an election contest (even if an election contest is not involved) or is otherwise required, in each case pursuant to Regulation 14A (or any successor provision) under the Securities Exchange Act of 1934 (“1934 Act”), and the rules thereunder (including such individual’s written consent to being named in the proxy statement as a nominee and to serving as a Director (if elected)).  In the case of the Fund holding a meeting of shareholders, any such submission, in order to be considered for inclusion in the Fund’s proxy statement, should be submitted by a date not later than the 120th calendar day before the date the Fund’s proxy statement was released to security holders in connection with the Fund’s previous year’s annual meeting or, if the Fund has changed the meeting date by more than 30 days or if no meeting was held the previous year, within a reasonable time before the Fund begins to print and mail its proxy statement.  Any such submission must also be submitted by such date and contain such information as may be specified in the Fund’s By-laws, or as required by any relevant stock exchange listing standards.

 

The Fund does not have a Compensation Committee.

 

Qualification of Board of Directors

 

The Board believes that each Director’s experience, qualifications, attributes or skills on an individual basis and in combination with those of the other Directors lead to the conclusion that each Director should serve in such

 

20



 

capacity.  Among the attributes common to all Directors are their ability to review critically, evaluate, question and discuss information provided to them, to interact effectively with the other Directors, Credit Suisse, other service providers, counsel and the independent registered public accounting firm, and to exercise effective business judgment in the performance of their duties as Directors.  A Director’s ability to perform his or her duties effectively may have been attained through the Director’s business, consulting, public service and/or academic positions; experience from service as a board member of the Fund and the other funds in the Fund Complex, other investment funds, public companies, or non-profit entities or other organizations; educational background or professional training; and/or other life experiences.  In addition to these shared characteristics, set forth below is a brief discussion of the specific experience, qualifications, attributes or skills of each Director that support the conclusion that each person should serve as a Director.

 

Enrique R. Arzac .  Mr. Arzac has been a Director since 1990 and Chairman of the Audit Committee since 2012.  In addition, he has over 40 years of business and consulting experience in the areas of finance, trade and economics and academic experience as a professor of finance and economics.  Mr. Arzac also currently serves on the boards of directors of other funds, including funds in the Fund Complex, and on the board of directors of an investment management and investment advisory services company.

 

Terry F. Bovarnick .  Ms. Bovarnick has been a Director since 2006.  In addition, she has over 30 years of executive and business experience in the investment industry.  Ms. Bovarnick also serves on the board of trustees of another closed-end fund in the Fund Complex.

 

James J. Cattano .  Mr. Cattano has been a Director since 2006.  In addition, he has 40 years of executive and business and academic experience in the international trading and manufacturing industry.  Mr. Cattano also currently serves on the boards of directors of other closed-end funds, including a closed-end fund in the Fund Complex.

 

Lawrence J. Fox .  Mr. Fox has been a Director since 1990.  In addition, he has close to 40 years of experience as an attorney.  Mr. Fox also currently serves on the boards of directors of other closed-end funds, including a closed-end fund in the Fund Complex.

 

Steven N. Rappaport .  Mr. Rappaport has been a Director since 2005 and Chairman of the Board and Chairman of the Nominating Committee since 2012.  In addition, he has 40 years of business experience in the financial services industry.  Mr. Rappaport also serves on the boards of directors of other funds, including funds in the Fund Complex.

 

Specific details regarding each Director’s principal occupations during the past five years are included in the table above.

 

Leadership Structure and Oversight Responsibilities

 

Overall responsibility for oversight of the Fund rests with the Board.  The Fund has engaged Credit Suisse to manage the Fund on a day-to-day basis.  The Board is responsible for overseeing Credit Suisse and other service providers in the operations of the Fund in accordance with the provisions of the 1940 Act, applicable provisions of state and other laws and the Fund’s charter.  The Board is currently composed of five members, each of whom is an Independent Director.  The Board meets in-person at regularly scheduled quarterly meetings each year.  In addition, the Board may hold special in-person or telephonic meetings or informal conference calls to discuss specific matters that may arise or require action between regular meetings.  As described below, the Board has established a Nominating Committee and an Audit Committee, and may establish ad hoc committees or working groups from time to time, to assist the Board in fulfilling its oversight responsibilities.  The Independent Directors have also engaged independent legal counsel to assist them in performing their oversight responsibilities.

 

The Board has appointed Steven Rappaport, an Independent Director, to serve in the role of Chairman.  The Chairman’s role is to preside at all meetings of the Board and to act as a liaison with Credit Suisse, other service providers, counsel and other Directors generally between meetings.  The Chairman serves as a key point person for dealings between management and the Directors.  The Chairman may also perform such other functions as may be

 

21



 

delegated by the Board from time to time.  The Board reviews matters related to its leadership structure annually.  The Board has determined that the Board’s leadership structure is appropriate because it allows the Board to exercise informed and independent judgment over the matters under its purview and it allocates areas of responsibility among committees of Directors and the full Board in a manner that enhances effective oversight.

 

The Fund is subject to a number of risks, including investment, compliance, operational and valuation risks, among others.  Risk oversight forms part of the Board’s general oversight of the Fund and is addressed as part of various Board and committee activities.  Day-to-day risk management functions are subsumed within the responsibilities of Credit Suisse and other service providers (depending on the nature of the risk), which carry out the Fund’s investment management and business affairs.  Credit Suisse and other service providers employ a variety of processes, procedures and controls to identify various events or circumstances that give rise to risks, to lessen the probability of their occurrence and/or to mitigate the effects of such events or circumstances if they do occur.  Each of Credit Suisse and other service providers have their own independent interest in risk management, and their policies and methods of risk management will depend on their functions and business models.  The Board recognizes that it is not possible to identify all of the risks that may affect the Fund or to develop processes and controls to eliminate or mitigate their occurrence or effects.  As part of its regular oversight of the Fund, the Board interacts with and reviews reports from, among others, Credit Suisse, the Fund’s Chief Compliance Officer, the Fund’s independent registered public accounting firm and counsel, as appropriate, regarding risks faced by the Fund and applicable risk controls.  The Board may, at any time and in its discretion, change the manner in which it conducts risk oversight.

 

Ownership of the Fund by Directors

 

The following table provides information concerning the number and dollar range of equity securities owned beneficially by each Director as of December 31, 2011:

 

Name of Director

 

Dollar Range of Equity Securities
in the Fund*(1)

 

Aggregate Dollar Range of Equity
Securities in All Funds Overseen
by Directors in Credit Suisse
Family of Investment
Companies*(1)(2)

Enrique Arzac

 

D

 

E

Terry F. Bovarnick

 

C

 

C

James J. Cattano

 

D

 

E

Lawrence J. Fox

 

D

 

E

Steven N. Rappaport

 

E

 

E

 


* Key to Dollar Ranges:

A.            None

B.              $1 - $10,000

C.              $10,001 - $50,000

D.             $50,001 - $100,000

E.               over $100,000

(1)           “Beneficial Ownership” is determined in accordance with Rule 16a-1(a)(2) promulgated under the 1934 Act.

(2)          “Credit Suisse Family of Investment Companies” means those registered investment companies that share Credit Suisse as their investment adviser and that hold themselves out to investors as related companies for purposes of investment and investor services.

 

As of [ ], 2011, the Fund’s Directors and officers, in the aggregate, own less than 1% of the Fund’s outstanding equity securities.

 

Director Compensation

 

During the fiscal year ended December 31, 2011, each Director who was not a director, officer, partner, co-partner or employee of Credit Suisse, State Street or any affiliate thereof, received an annual fee as set out below

 

22



 

and $1,000 for each meeting of the Board attended by him or her and was reimbursed for expenses incurred in connection with his or her attendance at the Fund’s Board meetings.  The annual fee rate was $14,300.  The total remuneration paid or accrued by the Fund during the fiscal year ended December 31, 2011 to all Directors was $104,474.  The Independent Chairman receives an additional annual fee of $5,000 and the Audit Committee Chairman receives an additional annual fee of $2,000.  Effective January 1, 2012, the meeting fee for each Director is $1,500 per meeting attended in person and $1,000 per meeting attended telephonically, and the annual fee is $15,300.  The Directors have approved a compensation plan that permits each Director entitled to receive a fee from the Fund to elect to receive up to one hundred percent of his or her annual fee in the form of Fund shares issued by the Fund.

 

The following table shows certain compensation information for the current Directors of the Fund for the fiscal year ended December 31, 2011.  All officers of the Fund are employees of and are compensated by Credit Suisse.  None of the Fund’s executive officers received any compensation from the Fund for such period.  The Fund does not have any bonus, profit sharing, pension or retirement plans.

 

Director

 

Aggregate Compensation
from the Fund

 

Total Compensation from the
Fund and the Fund Complex

 

Enrique R. Arzac

 

$

23,300

 

$

115,100

 

Terry F. Bovarnick

 

$

18,300

 

$

37,600

 

James J. Cattano

 

$

20,300

 

$

41,600

 

Lawrence J. Fox

 

$

18,296

 

$

36,594

 

Steven N. Rappaport

 

$

18,296

 

$

122,594

 

 

Code of Ethics

 

The Fund and Credit Suisse have each adopted a code of ethics, as required by federal securities laws.  Under these codes of ethics, employees who are designated as access persons may engage in personal securities transactions, including transactions involving securities that are being considered for the Fund’s portfolio or that are currently held by the Fund, subject to certain general restrictions and procedures.  The personal securities transactions of the Fund’s access persons and those of Credit Suisse will be governed by the applicable code of ethics.

 

Credit Suisse and its affiliates manage other investment companies and accounts.  Credit Suisse may give advice and take action with respect to any of the other funds it manages, or for its own account, that may differ from action taken by Credit Suisse on behalf of the Fund.  Similarly, with respect to the Fund’s portfolio, Credit Suisse is not obligated to recommend, buy or sell, or to refrain from recommending, buying or selling any security that Credit Suisse and its access persons, as defined by applicable federal securities laws, may buy or sell for its or their own account or for the accounts of any other fund.  Credit Suisse is not obligated to refrain from investing in securities held by the Fund or for any other funds it manages.

 

These codes of ethics can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.  Information on the operation of the Public Reference Room may be obtained by calling the SEC at (202) 551-8090.  Copies of these codes of ethics are also available on the EDGAR Database on the SEC’s Internet site at http://www.sec.gov, and copies of these codes of ethics may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov, or by writing the SEC’s Public Reference Section, Washington, D.C. 20549-1520.

 

Proxy Voting Policies and Procedures

 

The Fund has adopted Credit Suisse’s policies and procedures with respect to the voting of proxies related to portfolio securities.  A copy of the Fund’s proxy voting policies and procedures is attached as Appendix B.

 

Information regarding how the Fund voted proxies related to its portfolio securities during the most recent 12-month period ended June 30 is available without charge:

 

23



 

·                   by calling 1-800-293-1232

 

·                   on the Fund’s website, www.credit-suisse.com/us

 

·                   on the SEC’s website, www.sec.gov.

 

PRINCIPAL HOLDERS OF SECURITIES

 

The following table sets forth the beneficial ownership of shares of the Fund, as of October 10, 2012, by each person (including any group) known to the Fund to be deemed to be the beneficial owner of more than 5% of the outstanding shares of the Fund:

 

Name of Beneficial Owner

 

Number of Shares Beneficially
Owned

 

Percent Ownership*

 

 

 

 

 

 

 

First Trust Portfolios L.P.

 

5,097,729

 

10.2

%

 


*                  Stated in Schedule 13G/A filed with the SEC on October 10, 2012, First Trust Portfolios L.P., First Trust Advisors, L.P., and the Charger Corporation share beneficial ownership of 5,097,729 shares, or 10.2% of the common stock.

 

INVESTMENT ADVISER

 

Credit Suisse serves as the Fund’s investment adviser with respect to all investments and makes all investment decisions for the Fund.  Under the Investment Advisory Agreement, Credit Suisse receives as compensation for its advisory services from the Fund an annual fee, computed weekly and payable quarterly as follows: 0.50% of the lower of the weekly stock price (market value) of the Fund’s outstanding shares or its average weekly net assets.  Credit Suisse may voluntarily waive a portion of its fee from time to time and temporarily limit the expenses borne by the Fund.

 

For the fiscal years ended December 31, 2009, 2010 and 2011, the Fund paid Credit Suisse advisory fees under the Investment Advisory Agreement as follows:

 

December 31, 2011

 

Fees Paid

 

 

 

$

908,058

 

 

December 31, 2010

 

Fees Paid

 

 

 

$

881,703

 

 

December 31, 2009

 

Fees Paid

 

 

 

$

705,302

 

 

Credit Suisse is part of the asset management business of Credit Suisse Group AG, one of the world’s leading banks.  Credit Suisse Group AG provides its clients with investment banking, private banking and asset

 

24



 

management services worldwide.  The asset management business of Credit Suisse Group AG is comprised of a number of legal entities around the world that are subject to distinct regulatory requirements.  Credit Suisse is an indirect, wholly owned subsidiary of Credit Suisse Group AG, a leading global financial services organization headquartered in Zurich.  No one person or any entity possesses a controlling interest in Credit Suisse Group AG. Credit Suisse is registered as an investment adviser under the Investment Advisers Act of 1940, as amended.  Credit Suisse’s address is One Madison Avenue, New York, New York 10010.  As of June 30, 2012, Credit Suisse managed over $56.9 billion in the U.S. and, together with its global affiliates, managed assets of over $380.9 billion in 19 countries.

 

The Investment Advisory Agreement provides that Credit Suisse will not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with matters to which the Investment Advisory Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services or a loss resulting from willful misfeasance, bad faith or gross negligence on Credit Suisse’s part in the performance of its duties or from reckless disregard of its obligations and duties under the Investment Advisory Agreement.

 

The Investment Advisory Agreement will remain in effect from year to year if approved annually (1) by the Board of Directors of the Fund or by the holders of a majority (as defined in the 1940 Act) of the Fund’s outstanding voting securities and (2) by a majority of the Directors who are not parties to the Investment Advisory Agreement, or “interested persons” (as defined in the 1940 Act) of the Fund or the Adviser.  The Board of Directors last approved the Investment Advisory Agreement at meetings held on November 15-16, 2011.

 

The Investment Advisory Agreement terminates on its assignment by any party.  The Investment Advisory Agreement is terminable, without penalty, on 60 days’ written notice by the Board of Directors or by the vote of holders of a majority (as defined in the 1940 Act) of the Fund’s outstanding voting securities or upon 90 days’ written notice by Credit Suisse.

 

The services of Credit Suisse are not deemed to be exclusive, and nothing in the Investment Advisory Agreement will present it or its affiliates from providing similar services to other investment companies and other clients (whether or not their investment objectives and policies are similar to those of the Fund) or from engaging in other activities.

 

ADMINISTRATOR

 

State Street serves as the Fund’s administrator.  As administrator, State Street provides certain administrative services to the Fund, including but not limited to preparing and maintaining books, records, and tax and financial reports, and monitoring compliance with regulatory requirements.  State Street is located at One Lincoln Street, Boston, Massachusetts 02111.  The Fund pays State Street, for administrative services, a fee, exclusive of out-of-pocket expenses, calculated in total for all the funds advised by Credit Suisse that are administered or co-administered by State Street and allocated based upon the relative average net assets of each fund, subject to an annual minimum fee.  The services of State Street are not deemed to be exclusive, and nothing in the agreement between the Fund and State Street (the “Administration Agreement”) will prevent State Street or its affiliates from providing similar services to other investment companies and other clients (whether or not their investment objectives and policies are similar to those of the Fund) or from engaging in other activities.  The Administration Agreement is terminable upon 60 days’ notice by either party.

 

For the fiscal years ended December 31, 2009, 2010 and 2011, the Fund paid State Street $132,819, $136,524 and $108,550, respectively, in administrative fees.

 

CUSTODIAN, TRANSFER AGENT AND DIVIDEND-PAYING AGENT

 

State Street serves as the Fund’s custodian and may employ sub-custodians outside the U.S. in accordance with regulations of the SEC.  State Street is located at One Lincoln Street, Boston, Massachusetts 02111.  The custodian’s responsibilities include safekeeping and controlling the Fund’s cash and securities, handling the receipt and delivery of securities, and collecting interest and dividends on the Fund’s investments.

 

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Computershare Trust Company, N.A. acts as the Fund’s transfer agent and dividend-paying agent under the Fund’s automatic dividend reinvestment plan.  Computershare Trust Company, N.A. is located at P.O. Box 43078, Providence, Rhode Island, 02940.

 

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

[                  ], acts as the Fund’s independent registered public accounting firm and provides audit and tax services to the Fund.  [                    ]’s address is [                            ].

 

PORTFOLIO MANAGEMENT

 

Additional information regarding the Fund’s portfolio managers is provided below.

 

Registered Investment Companies, Pooled Investment Vehicles and Other Accounts Managed

 

As reported to the Fund, the information in the following table reflects the number of registered investment companies, pooled investment vehicles and other accounts managed by each portfolio manager of the Fund and the total assets managed within each category as of July 31, 2012.

 

 

 

Registered Investment
Companies

 

Other Pooled Investment 
Vehicles

 

Other Accounts

 

Name

 

Number of
Accounts

 

Total Assets

 

Number of
Accounts

 

Total Assets

 

Number of
Accounts

 

Total Assets

 

Thomas J. Flannery*

 

3

 

$

910

 

28

 

$

11,241

 

11

 

$

3,024

 

Wing Chan

 

3

 

$

910

 

2

 

$

449

 

5

 

$

1,418

 

 


*  As of July 31, 2012, Mr. Flannery manages 23 accounts which have total assets under management of $8,724 million, and which have additional fees based on the performance of the accounts.

 

Potential Conflicts of Interest

 

It is possible that conflicts of interest may arise in connection with the portfolio managers’ management of the Fund’s investments on the one hand and the investments of other accounts on the other.  For example, the portfolio managers may have conflicts of interest in allocating management time, resources and investment opportunities among the Fund and other accounts they advise.  In addition due to differences in the investment strategies or restrictions between the Fund and the other accounts, the portfolio managers may take action with respect to another account that differs from the action taken with respect to the Fund.  Credit Suisse has adopted policies and procedures that are designed to minimize the effects of these conflicts.

 

If Credit Suisse believes that the purchase or sale of a security is in the best interest of more than one client, it may (but is not obligated to) aggregate the orders to be sold or purchased to seek favorable execution or lower brokerage commissions, to the extent permitted by applicable laws and regulations.  Credit Suisse may aggregate orders if all participating client accounts benefit equally (i.e., all receive an average price of the aggregated orders).  In the event Credit Suisse aggregates an order for participating accounts, the method of allocation will generally be determined prior to the trade execution.  Although no specific method of allocation of transactions (as well as expenses incurred in the transactions) is expected to be used, allocations will be designed to ensure that over time all clients receive fair treatment consistent with Credit Suisse’s fiduciary duty to its clients (including its duty to seek to obtain best execution of client trades).  The accounts aggregated may include registered and unregistered investment companies managed by Credit Suisse’s affiliates and accounts in which Credit Suisse’s officers, directors, agents, employees or affiliates own interests.  Applicant may not be able to aggregate securities transactions for clients who direct the use of a particular broker-dealer, and the client also may not benefit from any improved execution or lower commissions that may be available for such transactions.

 

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Portfolio Manager Compensation

 

Thomas J. Flannery and Wing Chan are compensated for their services by Credit Suisse.  Their compensation consists of a fixed base salary and a discretionary bonus that is not tied by formula to the performance of any fund or account.  The factors taken into account in determining each of their bonuses includes the Fund’s performance, assets held in the Fund and other accounts managed by each of them, business growth, team work, management, corporate citizenship, etc.

 

A portion of the bonus may be paid in phantom shares of Credit Suisse Group AG stock as deferred compensation.  Phantom shares are shares representing an unsecured right to receive on a particular date a specified number of registered shares subject to certain terms and conditions.  A portion of the bonus will receive the notional return of the fund(s) the portfolio manager manages and a portion of the bonus will receive the notional return of a basket of other Credit Suisse funds along the product line of the portfolio manager.

 

Like all employees of Credit Suisse, portfolio managers participate in Credit Suisse Group AG’s profit sharing and 401 (k) plans.

 

Portfolio Manager Ownership of Shares

 

As reported to the Fund, the information in the following table reflects beneficial ownership by the portfolio managers of Shares as of [ ], 2012:

 

Name of Portfolio Manager

 

Dollar Range of Equity Securities in the Fund*(1)

Thomas J. Flannery

 

A

Wing Chan

 

A

 


*                  Key to Dollar Ranges:

A.            None

B.              $1 - $10,000

C.              $10,001 - $50,000

D.             $50,001 - $100,000

E.               over $100,000

(1)           “Beneficial Ownership” is determined in accordance with Rule 16a-1(a)(2) promulgated under the 1934 Act.

 

PORTFOLIO TRANSACTIONS

 

Credit Suisse is responsible for establishing, reviewing and, where necessary, modifying the Fund’s investment program to achieve its investment objectives.  Purchases and sales of newly issued portfolio securities are usually principal transactions without brokerage commissions effected directly with the issuer or with an underwriter acting as principal.  Other purchases and sales may be effected on a securities exchange or over-the-counter, depending on where it appears that the best price or execution will be obtained.  The purchase price paid by the Fund to underwriters of newly issued securities usually includes a concession paid by the issuer to the underwriter, and purchases of securities from dealers, acting as either principals or agents in the after market, are normally executed at a price between the bid and asked price, which includes a dealer’s mark-up or mark-down.  Transactions on U.S. stock exchanges and some foreign stock exchanges involve the payment of negotiated brokerage commissions.  On exchanges on which commissions are negotiated, the cost of transactions may vary among different brokers.  On most foreign exchanges, commissions are generally fixed.  There is generally no stated commission in the case of securities traded in domestic or foreign over-the-counter markets, but the price of securities traded in over-the-counter markets includes an undisclosed commission or mark-up.  U.S. government securities are generally purchased from underwriters or dealers, although certain newly issued U.S. government securities may be purchased directly from the U.S. Treasury or from the issuing agency or instrumentality.  No brokerage commissions are typically paid on purchases and sales of U.S. government securities.  For the 2011, 2010 and 2009 fiscal years, the Fund paid $[ ], $[ ] and $[ ], respectively, in brokerage commissions.

 

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Credit Suisse will select portfolio investments and effect transactions for the Fund.  In selecting broker-dealers, Credit Suisse does business exclusively with those broker-dealers that, in Credit Suisse’s judgment, can be expected to provide the best service.  The service has two main aspects: the execution of buy and sell orders and the provision of research.  In negotiating commissions with broker-dealers, Credit Suisse will pay no more for execution and research services than it considers either, or both together, to be worth.  The worth of execution service depends on the ability of the broker-dealer to minimize costs of securities purchased and to maximize prices obtained for securities sold.  The worth of research depends on its usefulness in optimizing portfolio composition and its changes over time.  Commissions for the combination of execution and research services that meet Credit Suisse’s standards may be higher than for execution services alone or for services that fall below Credit Suisse’s standards.  Credit Suisse believes that these arrangements may benefit all clients and not necessarily only the accounts in which the particular investment transactions occur that are so executed.  Further, Credit Suisse will receive only brokerage or research services in connection with securities transactions that are consistent with the “safe harbor” provisions of Section 28(e) of the 1934 Act when paying such higher commissions.  Research services may include research on specific industries or companies, macroeconomic analyses, analyses of national and international events and trends, evaluations of thinly traded securities, computerized trading screening techniques and securities ranking services, and general research services.  Research received from brokers or dealers is supplemental to Credit Suisse’s own research program.  For the fiscal year ended December 31, 2011, the Fund paid no brokerage commissions to brokers and dealers who provided such research services.

 

All orders for transactions in securities or options on behalf of the Fund are placed by the Adviser with broker-dealers that it selects, including Credit Suisse Securities (USA) LLC (“CSSU”) and other affiliates of Credit Suisse Group AG.  The Fund may utilize CSSU or other affiliates of Credit Suisse Group AG in connection with a purchase or sale of securities when the Adviser believes that the charge for the transaction does not exceed usual and customary levels and when doing so is consistent with guidelines adopted by the Board.  The Fund did not pay any commissions to affiliated broker-dealers during the fiscal years ended December 31, 2009, 2010 and 2011,  respectively.

 

Investment decisions for the Fund concerning specific portfolio securities are made independently from those for other clients advised by Credit Suisse.  Such other investment clients may invest in the same securities as the Fund.  When purchases or sales of the same security are made at substantially the same time on behalf of such other clients, transactions are averaged as to price and available investments allocated as to amount, in a manner which Credit Suisse believes to be equitable to each client, including the Fund.  In some instances, this investment procedure may adversely affect the price paid or received by the Fund or the size of the position obtained or sold for the Fund.  To the extent permitted by law, Credit Suisse may aggregate the securities to be sold or purchased for the Fund with those to be sold or purchased for such other investment clients in order to obtain best execution.

 

Transactions for the Fund may be effected on foreign securities exchanges.  In transactions for securities not actively traded on a foreign securities exchange, the Fund will deal directly with the dealers who make a market in the securities involved, except in those circumstances where better prices and execution are available elsewhere.  Such dealers usually are acting as principal for their own account.  On occasion, securities may be purchased directly from the issuer.  Such portfolio securities are generally traded on a net basis and do not normally involve brokerage commissions.  Securities firms may receive brokerage commissions on certain portfolio transactions, including options, futures and options on futures transactions and the purchase and sale of underlying securities upon exercise of options.

 

The Fund may participate, if and when practicable, in bidding for the purchase of securities for the Fund’s portfolio directly from an issuer in order to take advantage of the lower purchase price available to members of such a group.  The Fund will engage in this practice, however, only when Credit Suisse, in its sole discretion, believes such practice to be otherwise in the Fund’s interest.

 

In no instance will portfolio securities be purchased from or sold to Credit Suisse or CSSU or any affiliated person of such companies except as permitted by SEC exemptive order or by applicable law.  In addition, the Fund will not give preference to any institutions with whom the Fund enters into distribution or shareholder servicing agreements concerning the provision of distribution services or support services.

 

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TAXATION

 

The Fund is treated as a separate entity for U.S. federal income tax purposes.  The Fund has elected to be treated, and has qualified and intends to continue to qualify each year, as a “regulated investment company” under Subchapter M of the Code, so that it will not pay U.S. federal income tax on income and capital gains distributed to shareholders.  In order to qualify as a regulated investment company under Subchapter M of the Code, the Fund must, among other things, (i) derive at least 90% of its gross income for each taxable year from dividends, interest, payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including gains from options, futures, and forward contracts) derived with respect to its business of investing in such stock, securities or currencies, and net income derived from an interest in a qualified publicly traded partnership (as defined in Section 851(h) of the Code) (the “90% income test”) and (ii) diversify its holdings so that, at the end of each quarter of each taxable year: (a) at least 50% of the value of the Fund’s total assets is represented by (1) cash and cash items, U.S. government securities, securities of other regulated investment companies, and (2) other securities, with such other securities limited, in respect of any one issuer, to an amount not greater than 5% of the value of the Fund’s total assets and to not more than 10% of the outstanding voting securities of such issuer and (b) not more than 25% of the value of the Fund’s total assets is invested in (1) the securities (other than U.S. government securities and securities of other regulated investment companies) of any one issuer, (2) the securities (other than securities of other regulated investment companies) of two or more issuers that the Fund controls and that are engaged in the same, similar, or related trades or businesses, or (3) the securities of one or more qualified publicly traded partnerships.

 

Although in general the passive loss rules of the Code do not apply to regulated investment companies, such rules do apply to a regulated investment company with respect to items attributable to an interest in a qualified publicly traded partnership.  Fund investments in partnerships, including in qualified publicly traded partnerships, may result in the fund’s being subject to state, local or foreign income, franchise or withholding tax liabilities.

 

If the Fund qualifies as a regulated investment company and properly distributes to its shareholders each taxable year an amount equal to or exceeding the sum of (i) 90% of its “investment company taxable income” as that term is defined in the Code (which includes, among other things, dividends, taxable interest, and the excess of any net short-term capital gains over net long-term capital losses, as reduced by certain deductible expenses) without regard to the deduction for dividends paid and (ii) 90% of the excess of its gross tax-exempt interest income, if any, over certain disallowed deductions, the Fund generally will not be subject to U.S. federal income tax on any income of the Fund, including “net capital gain” (the excess of net long-term capital gain over net short-term capital loss), distributed to shareholders.  However, if the Fund meets such distribution requirements, but chooses to retain some portion of its taxable income or gains, it generally will be subject to U.S. federal income tax at regular corporate rates on the amount retained.  The Fund may designate certain amounts retained as undistributed net capital gain in a notice to its shareholders, who (i) will be required to include in income for U.S. federal income tax purposes, as long-term capital gain, their proportionate shares of the undistributed amount so designated, (ii) will be entitled to credit their proportionate shares of the income tax paid by the Fund on that undistributed amount against their federal income tax liabilities and to claim refunds to the extent such credits exceed their liabilities and (iii) will be entitled to increase their tax basis, for federal income tax purposes, in their shares by an amount equal to the excess of the amount of undistributed net capital gain included in their respective income over their respective income tax credits.  The Fund intends to distribute at least annually all or substantially all of its investment company taxable income (computed without regard to the dividends-paid deduction), net tax-exempt interest income, and net capital gain.

 

If, for any taxable year, the Fund does not qualify as a regulated investment company or does not satisfy the 90% distribution requirement, it will be treated as a U.S. corporation subject to U.S. federal income tax, thereby subjecting any income earned by the Fund to tax at the corporate level and to a further tax at the shareholder level when such income is distributed.

 

The Code imposes a 4% nondeductible excise tax on the Fund to the extent it does not distribute by the end of any calendar year at least the sum of (i) 98% of its taxable ordinary income for that year and (ii) 98.2% of its capital gain net income (both long-term and short-term) for the one-year period ending, as a general rule, on October 31 of that year.  For this purpose, however, any ordinary income or capital gain net income retained by the Fund that is subject to corporate income tax will be considered to have been distributed by year-end.  In addition, the

 

29



 

minimum amounts that must be distributed in any year to avoid the excise tax will be increased or decreased to reflect any underdistribution or overdistribution, as the case may be, from the previous year.  The Fund anticipates that it will pay such dividends and will make such distributions as are necessary in order to avoid the application of this excise tax.

 

The IRS has taken the position that if a regulated investment company has two or more classes of shares, it must report distributions made to each class in any year as consisting of no more than such class’s proportionate share of particular types of income, including tax-exempt interest, net capital gains, and other income subject to federal income tax.  A class’s proportionate share of a particular type of income is determined according to the percentage of total dividends paid by the regulated investment company to such class.

 

Existing authorities do not specifically address whether dividends that are paid following the close of a taxable year, but that are treated for tax purposes as derived from the income of such prior taxable year, are treated as dividends paid during such prior taxable year for purposes of determining each class’s proportionate share of a particular type of income.  The Fund currently intends to treat such dividends as having been paid in the prior taxable year for purposes of determining each class’s proportionate share of a particular type of income with respect to such prior taxable year.  Existing authorities also do not specifically address the allocation of taxable income among the dividends paid to holders of a class of shares during or with respect to a taxable year.  It is possible that the IRS could disagree with the Fund’s position concerning the treatment of dividends paid after the close of a taxable year, in which case the IRS could attempt to recharacterize a portion of the dividends paid and designated by the Fund as exempt-interest dividends as consisting instead of capital gains or other taxable income.  If the IRS were to prevail with respect to any such attempted recharacterization, holders of that class of shares could be subject to tax on amounts so recharacterized and the Fund could be subject to federal income and excise tax.

 

The Fund declares and pays a dividend from net investment income (excluding capital gains) each month.  The Fund typically distributes any net short-term and long-term capital gains in December.  Dividends from income and/or capital gains may also be paid at such other times as may be necessary for the Fund to avoid U.S. federal income or excise tax.

 

Unless a shareholder specifies otherwise, all distributions from the Fund to that shareholder will be automatically reinvested in additional full and fractional shares of the Fund.  For U.S. federal income tax purposes, all dividends from the Fund generally are taxable whether a shareholder takes them in cash or reinvests them in additional shares of the Fund.  In general, assuming that the Fund has sufficient earnings and profits, dividends from net investment income that is not tax exempt and from net short-term capital gains are taxable as ordinary income.

 

A 3.8% excise tax will be imposed on net investment income, including dividends, interest and net capital gains, of individuals with annual income of $200,000 or more ($250,000 if married, filing jointly) beginning in 2013.

 

Distributions in excess of the Fund’s minimum distribution requirements but not in excess of the Fund’s earnings and profits will be taxable to shareholders and will not constitute nontaxable returns of capital.  Distributions by the Fund in excess of the Fund’s current and accumulated earnings and profits will be treated as a return of capital to the extent of the shareholder’s tax basis in its shares and will reduce such basis.  Any such amount in excess of that basis will be treated as gain from the sale of shares, as discussed below.

 

Distributions from net capital gains, if any, that are reported as capital gain dividends by the Fund are taxable as long-term capital gains for U.S. federal income tax purposes without regard to the length of time the shareholder has held shares of the Fund.  Capital gain dividends distributed by the Fund to individual and certain other noncorporate shareholders generally will qualify for reduced U.S. federal income tax rates (currently, a maximum rate of 15%, with lower rates applying to taxpayers in the 10% and 15% rate brackets) on long-term capital gains, subject to certain limited exceptions.  A shareholder should also be aware that the benefits of the favorable tax rate applicable to long-term capital gains and qualified dividend income may be affected by the application of the alternative minimum tax to individual shareholders.  Under current law, the reduced maximum 15% U.S. federal income tax rate on qualified dividend income and long-term capital gains will not apply in taxable years beginning after December 31, 2012.

 

30



 

The U.S. federal income tax status of all distributions will be reported to shareholders annually.

 

Although dividends generally will be treated as distributed when paid, any dividend declared by the Fund in October, November or December and payable to shareholders of record in such a month that is paid during the following January will be treated for U.S. federal income tax purposes as received by shareholders on December 31 of the calendar year in which it was declared.  In addition, certain other distributions made after the close of a taxable year of the Fund may be “spilled back” and treated for certain purposes as paid by the Fund during such taxable year.  In such case, shareholders generally will be treated as having received such dividends in the taxable year in which the distributions were actually made.  For purposes of calculating the amount of a regulated investment company’s undistributed income and gain subject to the 4% excise tax described above, such “spilled back” dividends are treated as paid by the regulated investment company when they are actually paid.

 

For U.S. federal income tax purposes, the Fund is permitted to carry forward a net capital loss for any year to offset its capital gains, if any, for up to eight years following the year of the loss for taxable years beginning before 2011. Capital loss carry forwards generated in taxable years beginning in 2011 and later will not be subject to expiration, but will offset future gains before pre-2011 loss carry forwards.  To the extent subsequent capital gains are offset by such losses, they would not result in U.S. federal income tax liability to the Fund and may not be distributed as such to shareholders.  The Fund may not carry forward any losses other than net capital losses.

 

At the time of an investor’s purchase of fund shares, a portion of the purchase price may be attributable to realized or unrealized appreciation in the Fund’s portfolio or to undistributed capital gains of the Fund.  Consequently, subsequent distributions by the Fund with respect to these shares from such appreciation or gains may be taxable to such investor even if the net asset value of the investor’s shares is, as a result of the distributions, reduced below the investor’s cost for such shares and the distributions economically represent a return of a portion of the investment.

 

Sales and exchanges generally are taxable events for shareholders that are subject to tax.  Shareholders should consult their own tax advisers with reference to their individual circumstances to determine whether any particular transaction in fund shares is properly treated as a sale for tax purposes, as the following discussion assumes, and the tax treatment of any gains or losses recognized in such transactions.  In general, if fund shares are sold, the shareholder will recognize gain or loss equal to the difference between the amount realized on the sale and the shareholder’s adjusted basis in the shares.  Such gain or loss generally will be treated as long-term capital gain or loss if the shares were held for more than one year and otherwise generally will be treated as short-term capital gain or loss.

 

Losses on sales or other dispositions of shares may be disallowed under “wash sale” rules in the event of other investments in the Fund (including those made pursuant to reinvestment of dividends and/or capital gain distributions) within a period of 61 days beginning 30 days before and ending 30 days after a sale or other disposition of shares.  In such a case, the disallowed portion of any loss generally would be included in the U.S. federal tax basis of the shares acquired in the other investments.

 

Under Treasury regulations, if a shareholder recognizes a loss with respect to fund shares of $2 million or more for an individual shareholder, or $10 million or more for a corporate shareholder, in any single taxable year (or of certain greater amounts over a combination of years), the shareholder must file with the IRS a disclosure statement on Form 8886.  Shareholders who own portfolio securities directly are in many cases excepted from this reporting requirement but, under current guidance, shareholders of regulated investment companies are not excepted.  A shareholder who fails to make the required disclosure to the IRS may be subject to substantial penalties.  The fact that a loss is reportable under these regulations does not affect the legal determination of whether or not the taxpayer’s treatment of the loss is proper.  Shareholders should consult with their tax advisers to determine the applicability of these regulations in light of their individual circumstances.

 

Shareholders that are exempt from U.S. federal income tax, such as retirement plans that are qualified under Section 401 of the Code, generally are not subject to U.S. federal income tax on otherwise-taxable fund dividends or distributions, or on sales or exchanges of fund shares unless the Fund shares are “debt-financed property” within the meaning of the Code.  However, in the case of fund shares held through a non-qualified deferred compensation plan, fund dividends and distributions other than exempt-interest dividends received by the

 

31



 

plan and sales and exchanges of fund shares by the plan generally are taxable to the employer sponsoring such plan in accordance with the U.S. federal income tax laws that are generally applicable to shareholders receiving such dividends or distributions from regulated investment companies such as the Fund.

 

A plan participant whose retirement plan invests in the Fund, whether such plan is qualified or not, generally is not taxed on any fund dividends or distributions received by the plan or on sales or exchanges of fund shares by the plan for U.S. federal income tax purposes.  However, distributions to plan participants from a retirement plan account generally are taxable as ordinary income, and different tax treatment, including penalties on certain excess contributions and deferrals, certain pre-retirement and post-retirement distributions and certain prohibited transactions, is accorded to accounts maintained as qualified retirement plans.  Shareholders should consult their tax advisers for more information.

 

The Fund may invest to a significant extent in debt obligations that are in the lowest rating categories or that are unrated, including debt obligations of issuers not currently paying interest or that are in default.  Investments in debt obligations that are at risk of or in default present special tax issues for the Fund.  Federal income tax rules are not entirely clear about issues such as when the Fund may cease to accrue interest, original issue discount or market discount, when and to what extent deductions may be taken for bad debts or worthless securities, how payments received on obligations in default should be allocated between principal and interest and whether certain exchanges of debt obligations in a workout context are taxable.  These and other issues will be addressed by the Fund, in the event it invests in or holds such securities, in order to seek to ensure that it distributes sufficient income to preserve its status as a regulated investment company and does not become subject to U.S. federal income or excise tax.

 

If the Fund invests in certain pay-in-kind securities, zero coupon securities, deferred interest securities or, in general, any other securities with original issue discount (or with market discount if the Fund elects to include market discount in income currently), the Fund generally must accrue income on such investments for each taxable year, which generally will be prior to the receipt of the corresponding cash payments.  However, the Fund must distribute to its shareholders, at least annually, all or substantially all of its investment company taxable income (determined without regard to the deduction for dividends paid) and net tax-exempt income, including such accrued income, to qualify to be treated as a regulated investment company under the Code and avoid U.S. federal income and excise taxes.  Therefore, the Fund may have to dispose of its portfolio securities, potentially under disadvantageous circumstances, to generate cash, or may have to borrow the cash, to satisfy distribution requirements.  Such a disposition of securities may potentially result in additional taxable gain or loss to the Fund.

 

Options written or purchased and futures contracts entered into by the Fund on certain securities, indices and foreign currencies, as well as certain forward foreign currency contracts, may cause the Fund to recognize gains or losses from marking-to-market even though such options may not have lapsed or been closed out or exercised, or such futures or forward contracts may not have been performed or closed out.  The tax rules applicable to these contracts may affect the characterization of some capital gains and losses realized by the Fund as long-term or short-term.  Certain options, futures and forward contracts relating to foreign currency may be subject to Section 988 of the Code, and accordingly may produce ordinary income or loss.  Additionally, the Fund may be required to recognize gain if an option, futures contract, forward contract, short sale or other transaction that is not subject to the mark-to-market rules is treated as a “constructive sale” of an “appreciated financial position” held by the Fund under Section 1259 of the Code.  Any net mark-to-market gains and/or gains from constructive sales may also have to be distributed to satisfy the distribution requirements referred to above even though the Fund may receive no corresponding cash amounts, possibly requiring the disposition of portfolio securities or borrowing to obtain the necessary cash.  Such a disposition of securities may potentially result in additional taxable gain or loss to the Fund.  Losses on certain options, futures or forward contracts and/or offsetting positions (portfolio securities or other positions with respect to which the Fund’s risk of loss is substantially diminished by one or more options, futures or forward contracts) may also be deferred under the tax straddle rules of the Code, which may also affect the characterization of capital gains or losses from straddle positions and certain successor positions as long-term or short-term.  Certain tax elections may be available that would enable the Fund to ameliorate some adverse effects of the tax rules described in this paragraph.  The tax rules applicable to options, futures, forward contracts and straddles may affect the amount, timing and character of the Fund’s income and gains or losses and hence of its distributions to shareholders.

 

32



 

As a result of entering into swap contracts, the Fund may make or receive periodic net payments.  The Fund may also make or receive a payment when a swap is terminated prior to maturity through an assignment of the swap or other closing transaction.  Periodic net payments will generally constitute ordinary income or deductions, while termination of a swap will generally result in capital gain or loss (which will be a long-term capital gain or loss if the fund has been a party to the swap for more than one year).  With respect to certain types of swaps, the Fund may be required to currently recognize income or loss with respect to future payments on such swaps or may elect under certain circumstances to mark such swaps to market annually for tax purposes as ordinary income or loss.

 

The Fund may be subject to withholding and other taxes imposed by foreign countries, including taxes on interest, dividends and capital gains with respect to its investments in those countries.  Any such taxes would, if imposed, reduce the yield on or return from those investments.  Tax conventions between certain countries and the U.S. may reduce or eliminate such taxes in some cases.  The Fund does not expect to satisfy the requirements for passing through to its shareholders any share of foreign taxes paid by the Fund, with the result that shareholders will not include such taxes in their gross incomes and will not be entitled to a tax deduction or credit for such taxes on their own tax returns.

 

The Fund is required to withhold (as “backup withholding”) a certain percentage of reportable payments, including dividends, capital gain distributions and the proceeds of redemptions or repurchases of fund shares paid to shareholders who have not complied with certain IRS regulations.  In order to avoid this withholding requirement, shareholders, other than certain exempt entities, must certify on their Account Applications, or on separate IRS Forms W-9, that the Social Security Number or other Taxpayer Identification Number they provide is their correct number and that they are not currently subject to backup withholding, or that they are exempt from backup withholding.  The Fund may nevertheless be required to backup withhold if it receives notice from the IRS or a broker that the number provided is incorrect or backup withholding is applicable as a result of previous underreporting of interest or dividend income.

 

If, as anticipated, the Fund qualifies as a regulated investment company under the Code, it will not be required to pay any Massachusetts income, corporate excise or franchise taxes or any Delaware corporation income tax.

 

The exemption of exempt-interest dividends for U.S. federal income tax purposes does not necessarily result in exemption under the tax laws of any state or local taxing authority, since those laws vary with respect to the taxation of such income.  Many states exempt from tax that portion of an exempt-interest dividend which represents interest received by the Fund on that state’s securities, subject in some cases to compliance with concentration and/or reporting requirements, which the Fund makes no commitment to seek to satisfy.  However, the Fund will report annually to its shareholders the percentage of interest income received by the Fund during the preceding year on federally tax-exempt obligations indicating, on a state-by-state basis only, the source of such income.  Each shareholder is advised to consult his own tax adviser regarding the exemption, if any, of exempt-interest dividends under the state and local tax laws applicable to the shareholder.

 

A state income (and possibly local income and/or intangible property) tax exemption is generally available to shareholders to the extent the Fund’s distributions are derived from interest on (or, in the case of intangible property taxes, the value of its assets is attributable to) certain U.S. government obligations, provided in some states that certain thresholds for holdings of such obligations and/or reporting requirements are satisfied.  The Fund will not seek to satisfy any threshold or reporting requirements that may apply in particular taxing jurisdictions, although the Fund may in its sole discretion provide relevant information to shareholders.

 

A 30% withholding tax will be imposed on dividends paid after December 31, 2013 and redemption proceeds paid after December 31, 2014, to (i) foreign financial institutions including non-U.S. investment funds unless they agree to collect and disclose to the IRS (or to local revenue authorities, if an intergovernment agreement applies) information regarding their direct and indirect U.S. account holders and (ii) certain other foreign entities unless they certify certain information regarding their direct and indirect U.S. owners. To avoid withholding, foreign financial institutions will need to enter into agreements with the IRS that state that they will provide the IRS information including the name, address and taxpayer identification number of direct and indirect U.S. account holders, comply with due diligence procedures with respect to the identification of U.S. accounts, report to the IRS certain information with respect to U.S. accounts maintained, agree to withhold tax on certain payments made to

 

33



 

non-compliant foreign financial institutions or to account holders who fail to provide the required information, and determine certain other information as to their account holders.  Other foreign entities will need to provide the name, address, and taxpayer identification number of each substantial U.S. owner or certifications of no substantial U.S. ownership unless certain exceptions apply.

 

LEGAL MATTERS

 

The validity of the Shares offered hereby will be passed on for the Fund by Venable LLP, 750 E. Pratt Street, Suite 900, Baltimore, Maryland 21202.

 

Willkie Farr & Gallagher LLP, 787 Seventh Avenue, New York, New York 10019, is counsel to the Fund and has represented the Fund in connection with this registration statement.

 

FINANCIAL STATEMENTS

 

The audited financial statements for the year ended December 31, 2011 and the report of the independent registered public accounting firm are included in the Fund’s 2011 Annual Report and are incorporated by reference into this prospectus.  The unaudited financial statements for the six months ended June 30, 2012 are included in the Fund’s 2012 Semi-Annual Report and are incorporated by reference into this prospectus.  The Fund’s 2011 Annual Report was filed on Form N-CSR with the SEC on March 2, 2012 and the Fund’s 2012 Semi-Annual Report was filed on Form N-CSR with the SEC on September 4, 2012 and each is available on the SEC’s website at http://www.sec.gov.  Copies of the Fund’s 2011 Annual Report and 2012 Semi-Annual Report may also be obtained without charge upon written or oral request from the Fund at (800) 293-1232, or by visiting the Fund’s website at www.credit-suisse.com/us.

 

The financial statements of the Fund that are incorporated herein by reference (except for the financial statements for the six months ended June 30, 2012) and certain of the information appearing under the caption “Financial Highlights” included in the prospectus and appearing elsewhere herein and in the prospectus (except for the information relating to the Fund’s six months ended June 30, 2012) have been audited by [          ], independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.

 

34



 

APPENDIX A

 

DESCRIPTION OF RATINGS

 

Commercial Paper Ratings

 

Commercial paper rated A-1 by Standard & Poor’s, a subsidiary of The McGraw-Hill Companies, Inc. (“S&P”) indicates that the degree of safety regarding timely payment is strong.  Those issues determined to possess extremely strong safety characteristics are denoted with a plus sign designation.  Capacity for timely payment on commercial paper rated A-2 is satisfactory, but the relative degree of safety is not as high as for issues designated A-1.

 

The rating Prime-1 is the highest commercial paper rating assigned by Moody’s Investors Service, Inc. (“Moody’s”).  Issuers rated Prime-1 (or related supporting institutions) are considered to have a superior capacity for repayment of short-term promissory obligations.  Issuers rated Prime-2 (or related supporting institutions) are considered to have a strong capacity for repayment of short-term promissory obligations.  This will normally be evidenced by many of the characteristics of issuers rated Prime-1 but to a lesser degree.  Earnings trends and coverage ratios, while sound, will be more subject to variation.  Capitalization characteristics, while still appropriate, may be more affected by external conditions.  Ample alternative liquidity is maintained.

 

Corporate Bond Ratings

 

The following summarizes the ratings used by S&P for corporate bonds:

 

AAA - This is the highest rating assigned by S&P to a debt obligation and indicates an extremely strong capacity to pay interest and repay principal.

 

AA - Debt rated AA has a very strong capacity to pay interest and repay principal and differs from AAA issues only in small degree.

 

A - Debt rated A has a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher-rated categories.

 

BBB - This is the lowest investment grade.  Debt rated BBB has an adequate capacity to pay interest and repay principal.  Although it normally exhibits adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than for bonds in higher rated categories.

 

BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC and C is regarded, on balance, as predominately speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation.  BB represents a lower degree of speculation than B and C the highest degree of speculation.  While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.

 

BB - Debt rated BB has less near-term vulnerability to default than other speculative issues.  However, they face major ongoing uncertainties or exposure to adverse business, financial, or economic conditions, which could lead to inadequate capacity to meet timely interest and principal payments.  The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB rating.

 

B - Debt rated B has a greater vulnerability to default but currently has the capacity to meet interest payments and principal repayments.  Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal.  The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB or BB- rating.

 

A-1



 

CCC - Debt rated CCC has a currently identifiable vulnerability to default and is dependent upon favorable business, financial and economic conditions to meet timely payment of interest and repayment of principal.  In the event of adverse business, financial or economic conditions, it is not likely to have the capacity to pay interest and repay principal.  The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B- rating.

 

CC - This rating is typically applied to debt subordinated to senior debt that is assigned an actual or implied CCC rating.

 

C - This rating is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC- debt rating.  The C rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued.

 

Additionally, the rating CI is reserved for income bonds on which no interest is being paid.  Such debt is rated between debt rated C and debt rated D.

 

To provide more detailed indications of credit quality, the ratings from “AA” to “CCC” may be modified by the addition of a plus or minus sign to show relative standing within this major rating category.

 

D - Debt rated D is in payment default.  The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period.  The D rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized.

 

The following summarizes the ratings used by Moody’s for corporate bonds:

 

Aaa - Bonds that 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 “gilt edged.”  Interest payments are protected by a large or 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.

 

Aa - Bonds that 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 risks appear somewhat larger than in Aaa securities.

 

A - 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 sometime in the future.

 

Baa - 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.

 

Ba - 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.

 

B - Bonds which are rated B generally lack characteristics of desirable investments.  Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.

 

A-2



 

Moody’s applies numerical modifiers (1, 2 and 3) with respect to the bonds rated “Aa” through “B”.  The modifier 1 indicates that the bond being rated 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 bond ranks in the lower end of its generic rating category.

 

Caa - Bonds that are rated Caa are of poor standing.  These issues may be in default or present elements of danger may exist with respect to principal or interest.

 

Ca - 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.

 

C - 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.

 

Short-Term Note Ratings

 

The following summarizes the two highest ratings used by S&P for short-term notes:

 

SP-1 - Loans bearing this designation evidence a very strong or strong capacity to pay principal and interest.  Those issues determined to possess overwhelming safety characteristics will be given a plus sign designation.

 

SP-2 - Loans bearing this designation evidence a satisfactory capacity to pay principal and interest.

 

The following summarizes the two highest ratings used by Moody’s for short-term notes and variable rate demand obligations:

 

MIG-1/VMIG-1 - Obligations bearing these designations are of the best quality, enjoying strong protection from established cash flows of funds for their servicing or from established and broad-based access to the market for refinancing, or both.

 

MIG-2/VMIG-2 - Obligations bearing these designations are of high quality with margins of protection ample although not so large as in the preceding group.

 

Municipal Obligations Ratings

 

The following summarizes the ratings used by S&P for Municipal Obligations:

 

AAA - This is the highest rating assigned by S&P to a debt obligation and indicates an extremely strong capacity to pay interest and repay principal.

 

AA - Debt rated AA has a very strong capacity to pay interest and repay principal and differs from AAA issues only in small degree.

 

A - Debt rated A has a strong capacity to pay interest and repay principal although they are somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than debt in higher-rated categories.

 

BBB - This is the lowest investment grade.  Debt rated BBB has an adequate capacity to pay interest and repay principal.  Although adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for debt in this category than in higher rated categories.

 

BB, B, CCC, CC, C - Debt rated BB, B, CCC, CC and C is regarded, on balance, as predominately speculative with respect to capacity to pay interest and repay principal in accordance with the terms of the

 

A-3



 

obligation.  BB represents a lower degree of speculation than B and C the highest degree of speculation.  While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.

 

BB - Bonds rated BB have less near-term vulnerability to default than other speculative issues.  However, they face major ongoing uncertainties or exposure to adverse business, financial, or economic conditions, which could lead to inadequate capacity to meet timely interest and principal payments.  The BB rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BBB rating.

 

B - Bonds rated B have a greater vulnerability to default but currently have the capacity to meet interest payments and principal repayments.  Adverse business, financial, or economic conditions will likely impair capacity or willingness to pay interest and repay principal.  The B rating category is also used for debt subordinated to senior debt that is assigned an actual or implied BB or BB- rating.

 

CCC - Debt rated CCC has a currently identifiable vulnerability to default and is dependent upon favorable business, financial and economic conditions to meet timely payment of interest and repayment of principal.  In the event of adverse business, financial or economic conditions, it is not likely to have the capacity to pay interest and repay principal.  The CCC rating category is also used for debt subordinated to senior debt that is assigned an actual or implied B or B- rating.

 

CC - This rating is typically applied to debt subordinated to senior debt that is assigned an actual or implied CCC rating.

 

C - This rating is typically applied to debt subordinated to senior debt which is assigned an actual or implied CCC- debt rating.  The C rating may be used to cover a situation where a bankruptcy petition has been filed, but debt service payments are continued.

 

Additionally, the rating CI is reserved for income bonds on which no interest is being paid.  Such debt is rated between debt rated C and debt rated D.

 

To provide more detailed indications of credit quality, the ratings from “AA” to “CCC” may be modified by the addition of a plus or minus sign to show relative standing within this major rating category.

 

D - Debt rated D is in payment default.  The D rating category is used when interest payments or principal payments are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period.  The D rating also will be used upon the filing of a bankruptcy petition if debt service payments are jeopardized.

 

The following summarizes the highest four municipal ratings used by Moody’s:

 

Aaa - 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 “gilt edge.”  Interest payments are protected by a large or 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.

 

Aa - Bonds which are rated as 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 risks appear somewhat larger than in Aaa securities.

 

A - 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 sometime in the future.

 

A-4



 

Baa - 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.

 

Ba - 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.

 

B - Bonds which are rated B generally lack characteristics of desirable investments.  Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.

 

Note:  Those bonds in the Aa, A, Baa, Ba and B groups which Moody’s believes possess the strongest investment attributes are designated by the symbols Aa1, A1, Baa1, Ba1, and B1.

 

Caa - Bonds that are rated Caa are of poor standing.  These issues may be in default or present elements of danger may exist with respect to principal or interest.

 

Ca - 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.

 

C - 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

 

A-5



 

APPENDIX B

 

CREDIT SUISSE ASSET MANAGEMENT, LLC

 

CREDIT SUISSE FUNDS

 

CREDIT SUISSE CLOSED-END FUNDS

 

PROXY VOTING POLICIES AND PROCEDURES

 

Introduction

 

Credit Suisse Asset Management, LLC (“Credit Suisse”) is a fiduciary that owes each of its clients duties of care and loyalty with respect to proxy voting.  The duty of care requires Credit Suisse to monitor corporate events and to vote proxies.  To satisfy its duty of loyalty, Credit Suisse must cast proxy votes in the best interests of each of its clients.

 

The Credit Suisse Funds, and Credit Suisse Closed-End Funds (the “Funds”), which have engaged Credit Suisse Asset Management, LLC as their investment adviser, are of the belief that the proxy voting process is a means of addressing corporate governance issues and encouraging corporate actions both of which can enhance shareholder value.

 

Policy

 

The Proxy Voting Policy (the “Policy”) set forth below is designed to ensure that proxies are voted in the best interests of Credit Suisse’s clients.  The Policy addresses particular issues and gives a general indication of how Credit Suisse will vote proxies.  The Policy is not exhaustive and does not include all potential issues.

 

Proxy Voting Committee

 

The Proxy Voting Committee will consist of a member of the Portfolio Management Department, a member of the Legal and Compliance Department, and a member of the Operations Department (or their designees).  The purpose of the Proxy Voting Committee is to administer the voting of all clients’ proxies in accordance with the Policy.  The Proxy Voting Committee will review the Policy annually to ensure that it is designed to promote the best interests of Credit Suisse’s clients.

 

For the reasons disclosed below under “Conflicts,” the Proxy Voting Committee has engaged the services of an independent third party (initially, Risk Metrics Group’s ISS Governance Services Unit (“ISS”)) to assist in issue analysis and vote recommendation for proxy proposals.  Proxy proposals addressed by the Policy will be voted in accordance with the Policy.  Proxy proposals addressed by the Policy that require a case-by-case analysis will be voted in accordance with the vote recommendation of ISS.  Proxy proposals not addressed by the Policy will also be voted in accordance with the vote recommendation of ISS.  To the extent that the Proxy Voting Committee proposes to deviate from the Policy or the ISS vote recommendation, the Committee shall obtain client consent as described below.

 

Credit Suisse investment professionals may submit a written recommendation to the Proxy Voting Committee to vote in a manner inconsistent with the Policy and/or the recommendation of ISS.  Such recommendation will set forth its basis and rationale.  In addition, the investment professional must confirm in writing that he/she is not aware of any conflicts of interest concerning the proxy matter or provide a full and complete description of the conflict.

 

Conflicts

 

Credit Suisse is the part of the asset management business of Credit Suisse, one of the world’s leading banks.  As part of a global, full service investment-bank, broker-dealer, and asset-management organization, Credit Suisse and its affiliates and personnel may have multiple advisory, transactional, financial, and other interests in

 

B-1



 

securities, instruments, and companies that may be purchased or sold by Credit Suisse for its clients’ accounts.  The interests of Credit Suisse and/or its affiliates and personnel may conflict with the interests of Credit Suisse’s clients in connection with any proxy issue.  In addition, Credit Suisse may not be able to identify all of the conflicts of interest relating to any proxy matter.

 

Consent

 

In each and every instance in which the Proxy Voting Committee favors voting in a manner that is inconsistent with the Policy or the vote recommendation of ISS (including proxy proposals addressed and not addressed by the Policy), it shall disclose to the client conflicts of interest information and obtain client consent to vote.  Where the client is a Fund, disclosure shall be made to any one director who is not an “interested person,” as that term is defined under the Investment Company Act of 1940, as amended, of the Fund.

 

Recordkeeping

 

Credit Suisse is required to maintain in an easily accessible place for six years all records relating to proxy voting.

 

These records include the following:

 

·                   a copy of the Policy;

·                   a copy of each proxy statement received on behalf of Credit Suisse clients;

·                   a record of each vote cast on behalf of Credit Suisse clients;

·                   a copy of all documents created by Credit Suisse personnel that were material to making a decision on a vote or that memorializes the basis for the decision; and

·                   a copy of each written request by a client for information on how Credit Suisse voted proxies, as well as a copy of any written response.

 

Credit Suisse reserves the right to maintain certain required proxy records with ISS in accordance with all applicable regulations.

 

Disclosure

 

Credit Suisse will describe the Policy to each client.  Upon request, Credit Suisse will provide any client with a copy of the Policy.  Credit Suisse will also disclose to its clients how they can obtain information on their proxy votes.

 

ISS will capture data necessary for Funds to file Form N-PX on an annual basis concerning their proxy voting record in accordance with applicable law.

 

PROCEDURES

 

The Proxy Voting Committee will administer the voting of all client proxies. Credit Suisse has engaged ISS as an independent third party proxy voting service to assist in the voting of client proxies.  ISS will coordinate with each client’s custodian to ensure that proxy materials reviewed by the custodians are processed in a timely fashion.  ISS will provide Credit Suisse with an analysis of proxy issues and a vote recommendation for proxy proposals.  ISS will refer proxies to the Proxy Voting Committee for instructions when the application of the Policy is not clear.  The Proxy Voting Committee will notify ISS of any changes to the Policy or deviating thereof.

 

B-2



 

PROXY VOTING POLICY

 

Operational Items

 

Adjourn Meeting

 

Proposals to provide management with the authority to adjourn an annual or special meeting will be determined on a case-by-case basis.

 

Amend Quorum Requirements

 

Proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding will be determined on a case-by-case basis.

 

Amend Minor Bylaws

 

Generally vote for bylaw or charter changes that are of a housekeeping nature.

 

Change Date, Time, or Location of Annual Meeting

 

Generally vote for management proposals to change the date/time/location of the annual meeting unless the proposed change is unreasonable.  Generally vote against shareholder proposals to change the date/time/location of the annual meeting unless the current scheduling or location is unreasonable.

 

Ratify Auditors

 

Generally vote for proposals to ratify auditors unless: (1) an auditor has a financial interest in or association with the company, and is therefore not independent; (2) fees for non-audit services are excessive, or (3) there is reason to believe that the independent auditor has rendered an opinion, which is neither accurate nor indicative of the company’s financial position.  Generally vote on a case-by-case basis on shareholder proposals asking companies to prohibit their auditors from engaging in non-audit services (or capping the level of non-audit services).  Generally vote on a case-by-case basis on auditor rotation proposals taking into consideration: (1) tenure of audit firm; (2) establishment and disclosure of a renewal process whereby the auditor is regularly evaluated for both audit quality and competitive price; (3) length of the rotation period advocated in the proposal, and (4) significant audit related issues.

 

Board of Directors

 

Voting on Director Nominees in Uncontested Elections

 

Generally votes on director nominees on a case-by-case basis.  Votes may be withheld: (1) from directors who attended less than 75% of the board and committee meetings without a valid reason for the absences; (2) implemented or renewed a dead-hand poison pill; (3) ignored a shareholder proposal that was approved by a majority of the votes cast for two consecutive years; (4) ignored a shareholder proposal approved by a majority of the shares outstanding; (5) have failed to act on takeover offers where the majority of the shareholders have tendered their shares; (6) are inside directors or affiliated outside directors and sit on the audit, compensation, or nominating committee; (7) are inside directors or affiliated outside directors and the full board serves as the audit, compensation, or nominating committee or the company does not have one of these committees; or (8) are audit committee members and the non-audit fees paid to the auditor are excessive

 

Cumulative Voting

 

Proposals to eliminate cumulative voting will be determined on a case-by-case basis. Proposals to restore or provide for cumulative voting in the absence of sufficient good governance provisions and/or poor relative shareholder returns will be determined on a case-by-case basis.

 

B-3



 

Director and Officer Indemnification and Liability Protection

 

Proposals on director and officer indemnification and liability protection generally evaluated on a case-by-case basis.  Generally vote against proposals that would: (1) eliminate entirely directors’ and officers’ liability for monetary damages for violating the duty of care; or (2) expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness.  Generally vote for only those proposals providing such expanded coverage in cases when a director’s or officer’s legal defense was unsuccessful if: (1) the director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and (2) only if the director’s legal expenses would be covered.

 

Filling Vacancies/Removal of Directors

 

Generally vote against proposals that provide that directors may be removed only for cause.  Generally vote for proposals to restore shareholder ability to remove directors with or without cause.  Proposals that provide that only continuing directors may elect replacements to fill board vacancies will be determined on a case-by-case basis.  Generally vote for proposals that permit shareholders to elect directors to fill board vacancies.

 

Independent Chairman (Separate Chairman/CEO)

 

Generally vote for shareholder proposals requiring the position of chairman be filled by an independent director unless there are compelling reasons to recommend against the proposal, including: (1) designated lead director, elected by and from the independent board members with clearly delineated duties; (2) 2/3 independent board; (3) all independent key committees; or (4) established governance guidelines.

 

Majority of Independent Directors

 

Generally vote for shareholder proposals requiring that the board consist of a majority or substantial majority (two-thirds) of independent directors unless the board composition already meets the adequate threshold.  Generally vote for shareholder proposals requiring the board audit, compensation, and/or nominating committees be composed exclusively of independent directors if they currently do not meet that standard.  Generally withhold votes from insiders and affiliated outsiders sitting on the audit, compensation, or nominating committees.  Generally withhold votes from insiders and affiliated outsiders on boards that are lacking any of these three panels.  Generally withhold votes from insiders and affiliated outsiders on boards that are not at least majority independent.

 

Term Limits

 

Generally vote against shareholder proposals to limit the tenure of outside directors.

 

Proxy Contests

 

Voting on Director Nominees in Contested Elections

 

Votes in a contested election of directors should be decided on a case-by-case basis, with shareholders determining which directors are best suited to add value for shareholders.  The major decision factors are: (1) company performance relative to its peers; (2) strategy of the incumbents versus the dissidents; (3) independence of directors/nominees; (4) experience and skills of board candidates; (5) governance profile of the company; (6) evidence of management entrenchment; (7) responsiveness to shareholders; or (8) whether takeover offer has been rebuffed.

 

B-4



 

Amend Bylaws without Shareholder Consent

 

Proposals giving the board exclusive authority to amend the bylaws will be determined on a case-by-case basis.  Proposals giving the board the ability to amend the bylaws in addition to shareholders will be determined on a case-by-case basis.

 

Confidential Voting

 

Generally vote for shareholder proposals requesting that corporations adopt confidential voting, use independent vote tabulators and use independent inspectors of election, as long as the proposal includes a provision for proxy contests as follows: In the case of a contested election, management should be permitted to request that the dissident group honor its confidential voting policy.  If the dissidents agree, the policy may remain in place.  If the dissidents will not agree, the confidential voting policy may be waived.  Generally vote for management proposals to adopt confidential voting.

 

Cumulative Voting

 

Proposals to eliminate cumulative voting will be determined on a case-by-case basis.  Proposals to restore or provide for cumulative voting in the absence of sufficient good governance provisions and/or poor relative shareholder returns will be determined on a case-by-case basis.

 

Antitakeover Defenses and Voting Related Issues

 

Advance Notice Requirements for Shareholder Proposals/Nominations

 

Votes on advance notice proposals are determined on a case-by-case basis.

 

Amend Bylaws without Shareholder Consent

 

Proposals giving the board exclusive authority to amend the bylaws will be determined on a case-by-case basis.  Generally vote for proposals giving the board the ability to amend the bylaws in addition to shareholders.

 

Poison Pills (Shareholder Rights Plans)

 

Generally vote for shareholder proposals requesting that the company submit its poison pill to a shareholder vote or redeem it.  Votes regarding management proposals to ratify a poison pill should be determined on a case-by-case basis.  Plans should embody the following attributes: (1) 20% or higher flip-in or flip-over; (2) two to three year sunset provision; (3) no dead-hand or no-hand features; or (4) shareholder redemption feature

 

Shareholders’ Ability to Act by Written Consent

 

Generally vote against proposals to restrict or prohibit shareholders’ ability to take action by written consent.  Generally vote for proposals to allow or make easier shareholder action by written consent.

 

Shareholders’ Ability to Call Special Meetings

 

Proposals to restrict or prohibit shareholders’ ability to call special meetings or that remove restrictions on the right of shareholders to act independently of management will be determined on a case-by-case basis.

 

Supermajority Vote Requirements

 

Proposals to require a supermajority shareholder vote will be determined on a case-by-case basis Proposals to lower supermajority vote requirements will be determined on a case-by-case basis.

 

Merger and Corporate Restructuring

 

B-5



 

Appraisal Rights

 

Generally vote for proposals to restore, or provide shareholders with, rights of appraisal.

 

Asset Purchases

 

Generally vote case-by-case on asset purchase proposals, taking into account: (1) purchase price, including earnout and contingent payments; (2) fairness opinion; (3) financial and strategic benefits; (4) how the deal was negotiated; (5) conflicts of interest; (6) other alternatives for the business; or (7) noncompletion risk (company’s going concern prospects, possible bankruptcy).

 

Asset Sales

 

Votes on asset sales should be determined on a case-by-case basis after considering: (1) impact on the balance sheet/working capital; (2) potential elimination of diseconomies; (3) anticipated financial and operating benefits; (4) anticipated use of funds; (5) value received for the asset; fairness opinion (if any); (6) how the deal was negotiated; or (6) Conflicts of interest

 

Conversion of Securities

 

Votes on proposals regarding conversion of securities are determined on a case-by-case basis. When evaluating these proposals, should review (1) dilution to existing shareholders’ position; (2) conversion price relative to market value; (3) financial issues: company’s financial situation and degree of need for capital; effect of the transaction on the company’s cost of capital; (4) control issues: change in management; change in control; standstill provisions and voting agreements; guaranteed contractual board and committee seats for investor; veto power over certain corporate actions; (5) termination penalties; (6) conflict of interest: arm’s length transactions, managerial incentives.  Generally vote for the conversion if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved.

 

Corporate Reorganization

 

Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders’ position; (2) terms of the offer; (3) financial issues; (4) management’s efforts to pursue other alternatives; (5) control issues; (6) conflict of interest.  Generally vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved.

 

Reverse Leveraged Buyouts

 

Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders’ position; (2) terms of the offer; (3) financial issues;

 

(4) management’s efforts to pursue other alternatives; (5) control issues; (6) conflict of interest.  Generally vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved.

 

Formation of Holding Company

 

Votes on proposals regarding the formation of a holding company should be determined on a case-by-case basis taking into consideration: (1) the reasons for the change; (2) any financial or tax benefits; (3) regulatory benefits; (4) increases in capital structure; (5) changes to the articles of incorporation or bylaws of the company.  Absent compelling financial reasons to recommend the transaction, generally vote against the formation of a holding company if the transaction would include either of the following: (1) increases in common or preferred stock in excess of the allowable maximum as calculated a model

 

B-6



 

capital structure; (2) adverse changes in shareholder rights; (3) going private transactions; (4) votes going private transactions on a case-by-case basis, taking into account: (a) offer price/premium; (b) fairness opinion; (c) how the deal was negotiated; (d) conflicts of interest; (e) other alternatives/offers considered; (f) noncompletion risk.

 

Joint Ventures

 

Vote on a case-by-case basis on proposals to form joint ventures, taking into account: (1) percentage of assets/business contributed; (2) percentage ownership; (3) financial and strategic benefits; (4) governance structure; (5) conflicts of interest; (6) other alternatives; (7) noncompletion risk; (8) liquidations.  Votes on liquidations should be determined on a case-by-case basis after reviewing: (1) management’s efforts to pursue other alternatives such as mergers; (2) appraisal value of the assets (including any fairness opinions); (3) compensation plan for executives managing the liquidation.  Generally vote for the liquidation if the company will file for bankruptcy if the proposal is not approved.

 

Mergers and Acquisitions

 

Votes on mergers and acquisitions should be considered on a case-by-case basis, determining whether the transaction enhances shareholder value by giving consideration to: (1) prospects of the combined companies; (2) anticipated financial and operating benefits; (3) offer price; (4) fairness opinion; (5) how the deal was negotiated; (6) changes in corporate governance and their impact on shareholder rights; (7) change in the capital structure; (8) conflicts of interest.

 

Private Placements

 

Votes on proposals regarding private placements should be determined on a case-by-case basis. When evaluating these proposals, should review: (1) dilution to existing shareholders’ position; (2) terms of the offer; (3) financial issues; (4) management’s efforts to pursue alternatives such as mergers; (5) control issues; (6) conflict of interest.  Generally vote for the private placement if it is expected that the company will file for bankruptcy if the transaction is not approved.

 

Prepackaged Bankruptcy Plans

 

Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders’ position; (2) terms of the offer; (3) financial issues; (4) management’s efforts to pursue other alternatives; (5) control issues; (6) conflict of interest.  Generally vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved.

 

Recapitalization

 

Votes case-by-case on recapitalizations (reclassifications of securities), taking into account: (1) more simplified capital structure; (2) enhanced liquidity; (3) fairness of conversion terms, including fairness opinion; (4) impact on voting power and dividends; (5) reasons for the reclassification; (6) conflicts of interest; (7) other alternatives considered.

 

Reverse Stock Splits

 

Generally vote for management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced.  Generally vote for management proposals to implement a reverse stock split to avoid delisting.  Votes on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue should be determined on a case-by-case basis.

 

B-7



 

Spinoffs

 

Votes on spinoffs should be considered on a case-by-case basis depending on: (1) tax and regulatory advantages; (2) planned use of the sale proceeds; (3) valuation of spinoff; fairness opinion; (3) benefits that the spinoff may have on the parent company including improved market focus; (4) conflicts of interest; managerial incentives; (5) any changes in corporate governance and their impact on shareholder rights; (6) change in the capital structure

 

Value Maximization Proposals

 

Vote case-by-case on shareholder proposals seeking to maximize shareholder value.

 

Capital Structure

 

Adjustments to Par Value of Common Stock

 

Generally vote for management proposals to reduce the par value of common stock unless the action is being taken to facilitate an antitakeover device or some other negative corporate governance action.  Generally vote for management proposals to eliminate par value.

 

Common Stock Authorization

 

Votes on proposals to increase the number of shares of common stock authorized for issuance are determined on a case-by-case basis.  Generally vote against proposals at companies with dual-class capital structures to increase the number of authorized shares of the class of stock that has superior voting rights.  Generally vote for proposals to approve increases beyond the allowable increase when a company’s shares are in danger of being delisted or if a company’s ability to continue to operate as a going concern is uncertain.

 

Dual-class Stock

 

Generally vote against proposals to create a new class of common stock with superior voting rights.  Generally vote for proposals to create a new class of nonvoting or subvoting common stock if: (1) it is intended for financing purposes with minimal or no dilution to current shareholders; (2) it is not designed to preserve the voting power of an insider or significant shareholder.

 

Issue Stock for Use with Rights Plan

 

Generally vote against proposals that increase authorized common stock for the explicit purpose of implementing a shareholder rights plan.

 

Preemptive Rights

 

Votes regarding shareholder proposals seeking preemptive rights should be determined on a case-by-case basis after evaluating: (1) the size of the company; (2) the shareholder base; (3) the liquidity of the stock

 

Preferred Stock

 

Generally vote against proposals authorizing the creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights (“blank check” preferred stock).  Generally vote for proposals to create “declawed” blank check preferred stock (stock that cannot be used as a takeover defense).  Generally vote for proposals to authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable.  Generally vote against proposals to increase the number of blank check preferred stock authorized for issuance when no shares have been issued or reserved for a specific purpose.  Generally vote case-by-case on proposals to increase the number of blank check preferred shares after analyzing the number of preferred shares available for issue given a company’s industry and performance in terms of shareholder returns.

 

B-8



 

Recapitalization

 

Vote case-by-case on recapitalizations (reclassifications of securities), taking into account: (1) more simplified capital structure; (2) enhanced liquidity; (3) fairness of conversion terms, including fairness opinion; (4) impact on voting power and dividends; (5) reasons for the reclassification; (6) conflicts of interest; (7) other alternatives considered.

 

Reverse Stock Splits

 

Generally vote for management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced.  Generally vote for management proposals to implement a reverse stock split to avoid delisting.  Votes on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue should be determined on a case-by-case basis.

 

Share Repurchase Programs

 

Generally vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms.

 

Stock Distributions: Splits and Dividends

 

Generally vote for management proposals to increase the common share authorization for a stock split or share dividend, provided that the increase in authorized shares would not result in an excessive number of shares available for issuance.

 

Tracking Stock

 

Votes on the creation of tracking stock are determined on a case-by-case basis, weighing the strategic value of the transaction against such factors as: (1) adverse governance changes; (2) excessive increases in authorized capital stock; (3) unfair method of distribution; (4) diminution of voting rights; (5) adverse conversion features; (6) negative impact on stock option plans; (7) other alternatives such as a spinoff.

 

Executive and Director Compensation

 

Executive and Director Compensation

 

Votes on compensation plans for directors are determined on a case-by-case basis.

 

Stock Plans in Lieu of Cash

 

Votes for plans which provide participants with the option of taking all or a portion of their cash compensation in the form of stock are determined on a case-by-case basis.  Generally vote for plans which provide a dollar-for-dollar cash for stock exchange.  Votes for plans which do not provide a dollar-for-dollar cash for stock exchange should be determined on a case-by-case basis.

 

Director Retirement Plans

 

Generally vote against retirement plans for nonemployee directors.  Generally vote for shareholder proposals to eliminate retirement plans for nonemployee directors.

 

Management Proposals Seeking Approval to Reprice Options

 

Votes on management proposals seeking approval to reprice options are evaluated on a case-by-case basis giving consideration to the following: (1) historic trading patterns; (2) rationale for the repricing; (3) value-

 

B-9



 

for-value exchange; (4) option vesting; (5) term of the option; (6) exercise price; (7) participants; (8) employee stock purchase plans.  Votes on employee stock purchase plans should be determined on a case-by-case basis.  Generally vote for employee stock purchase plans where: (1) purchase price is at least 85 percent of fair market value; (2) offering period is 27 months or less, and (3) potential voting power dilution (VPD) is ten percent or less.  Generally vote against employee stock purchase plans where either: (1) purchase price is less than 85 percent of fair market value; (2) Offering period is greater than 27 months, or (3) VPD is greater than ten percent

 

Incentive Bonus Plans and Tax Deductibility Proposals

 

Generally vote for proposals that simply amend shareholder-approved compensation plans to include administrative features or place a cap on the annual grants any one participant may receive.  Generally vote for proposals to add performance goals to existing compensation plans.  Votes to amend existing plans to increase shares reserved and to qualify for favorable tax treatment considered on a case-by-case basis.  Generally vote for cash or cash and stock bonus plans that are submitted to shareholders for the purpose of exempting compensation from taxes if no increase in shares is requested.

 

Employee Stock Ownership Plans (ESOPs)

 

Generally vote for proposals to implement an ESOP or increase authorized shares for existing ESOPs, unless the number of shares allocated to the ESOP is excessive (more than five percent of outstanding shares.)

 

401(k) Employee Benefit Plans

 

Generally vote for proposals to implement a 401(k) savings plan for employees.

 

Shareholder Proposals Regarding Executive and Director Pay

 

Generally vote for shareholder proposals seeking additional disclosure of executive and director pay information, provided the information requested is relevant to shareholders’ needs, would not put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the company.  Generally vote against shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation.  Generally vote against shareholder proposals requiring director fees be paid in stock only.  Generally vote for shareholder proposals to put option repricings to a shareholder vote.  Vote for shareholders proposals to exclude pension fund income in the calculation of earnings used in determining executive bonuses/compensation.  Vote on a case-by-case basis for all other shareholder proposals  regarding executive and director pay, taking into account company performance, pay level versus peers, pay level versus industry, and long term corporate outlook.

 

Performance-Based Option Proposals

 

Generally vote for shareholder proposals advocating the use of performance-based equity awards (indexed, premium-priced, and performance-vested options), unless: (1) the proposal is overly restrictive; or (2) the company demonstrates that it is using a substantial portion of performance-based awards for its top executives.

 

Stock Option Expensing

 

Generally vote for shareholder proposals asking the company to expense stock options unless the company has already publicly committed to start expensing by a specific date.

 

Golden and Tin Parachutes

 

Generally vote for shareholder proposals to require golden and tin parachutes to be submitted for shareholder ratification, unless the proposal requires shareholder approval prior to entering into

 

B-10



 

employment contracts.  Vote on a case-by-case basis on proposals to ratify or cancel golden or tin parachutes.

 

May 1, 2012

 

B-11



 

Part C

 

Other Information

 

Item 25. Financial Statements and Exhibits

 

1. Financial Statements

 

Part A — Financial Highlights.

 

Part B — Unaudited financial statements for the fiscal period ended June 30, 2012 are incorporated by reference herein to the Fund’s semi-annual report for the fiscal period ended June 30, 2012. Audited financial statements for the fiscal year ended December 31, 2011are incorporated by reference herein to the Fund’s annual report for the fiscal year ended December 31, 2011.

 

2. Exhibits

 

(a)(1)

 

Articles of Incorporation of the Registrant (2)

 

 

 

(a)(2)

 

Articles of Transfer, dated May 9, 2001*

 

 

 

(a)(3)

 

Articles Supplementary, dated July 27, 2001*

 

 

 

(a)(4)

 

Articles Supplementary, dated August 14, 2008*

 

 

 

(a)(5)

 

Articles Supplementary, dated May 4, 2009*

 

 

 

(b)(1)

 

Amended and Restated By-Laws*

 

 

 

(b)(2)

 

Amendment to the Amended and Restated By-laws*

 

 

 

(b)(3)

 

Amendment to the Amended and Restated By-laws*

 

 

 

(b)(4)

 

Amendment to the Amended and Restated By-laws*

 

 

 

(c)

 

Not applicable

 

 

 

(d)

 

Provisions of instruments defining the rights of holders of securities are contained in the Registrant’s Articles of Incorporation and Bylaws, each as amended.

 

 

 

(e)

 

Dividend Reinvestment and Cash Purchase Plan*

 

 

 

(f)

 

Not applicable

 

 

 

(g)

 

Restated Investment Advisory Agreement with Credit Suisse Asset Management, LLC, dated May 14, 2001*

 

 

 

(h)

 

Form of Sales Agreement, to be filed by amendment.

 

 

 

(i)

 

Not applicable

 

 

 

(j)(1)

 

Custodian Agreement with State Street Bank and Trust Company, dated October 20, 2000(3)

 

 

 

(j)(2)

 

Amendment to Custodian Agreement, dated April 26, 2001*

 

 

 

(j)(3)

 

Amendment to Custodian Agreement, dated May 16, 2001*

 

 

 

(j)(4)

 

Amendment to Custodian Agreement, dated November 16, 2005*

 

 

 

(j)(5)

 

Amendment to Custodian Agreement, dated November 19, 2007*

 

 

 

(j)(6)

 

Amendment to Custodian Agreement, dated November 1, 2011(4)

 

 

 

(k)(1)

 

Registrar, Transfer Agency and Services Agreement with EquiServe, Inc., dated March 1, 2003*

 

 

 

(k)(2)

 

Amendment to Registrar, Transfer Agency and Services Agreement, dated September 30, 2003*

 

 

 

(k)(3)

 

Amendment to Registrar, Transfer Agency and Services Agreement, effective January 1, 2011*

 

 

 

(k)(4)

 

Administration Agreement with State Street Bank and Trust Company, dated June 7, 2002(5)

 

 

 

(k)(5)

 

Amendment No. 1 to Administration Agreement dated November 1, 2011(6)

 

C-1



 

(k)(6)

 

Amendment No. 2 to the Administration Agreement, dated October 9, 2012*

 

 

 

(k)(7)

 

Committed Line of Credit Agreement with State Street Bank and Trust Company, dated June 10, 2009 (7)

 

 

 

(k)(8)

 

First Amendment to Committed Line of Credit Agreement, dated June 30, 2009(7)

 

 

 

(k)(9)

 

Second Amendment to Committed Line of Credit Agreement, dated July 17, 2009(7)

 

 

 

(k)(10)

 

Third Amendment to Committed Line of Credit Agreement, dated June 9, 2010(7)

 

 

 

(k)(11)

 

Fourth Amendment to Committed Line of Credit Agreement, dated June 8, 2011(7)

 

 

 

(k)(12)

 

Fifth Amendment to Committed Line of Credit Agreement, dated March 30, 2012(7)

 

 

 

(k)(13)

 

Sixth Amendment to Committed Line of Credit Agreement, dated June 6, 2012(7)

 

 

 

(l)

 

Opinion and Consent of Venable LLP, to be filed by amendment.

 

 

 

(m)

 

Not applicable

 

 

 

(n)

 

Consent of Independent Registered Public Accounting Firm, to be filed by amendment

 

 

 

(o)

 

Not applicable

 

 

 

(p)

 

Purchase Agreement between the Fund and CS First Boston(1)

 

 

 

(q)

 

Not applicable

 

 

 

(r)(1)

 

Global Personal Trading Policy for Registrant, Credit Suisse Asset Management, LLC and CSSU dated October 29, 2010; and Asset Management Divisional Supplement dated October 22, 2009(8)

 

 

 

(r)(2)

 

Code of Ethics of the Investment Adviser(7)

 

 

 

(s)

 

Power of Attorney*

 


* Filed herewith.

 

(1) Incorporated by reference to the Registrant’s Pre-Effective Amendment No. 1 to the Registration Statement on Form N-2, filed on September 27, 1996 (Securities Act File No. 333-10851).

 

(2) Incorporated by reference to the Registrant’s Registration Statement on Form N-14, filed on March 5, 2001 (Securities Act File No. 333-56526).

 

(3) Incorporated by reference to Post-Effective Amendment No. 14 to the Registration Statement on Form N-1A of Credit Suisse Trust, filed on November 22, 2000 (Securities Act File No. 33-58125).

 

(4) Incorporated by reference to Post-Effective Amendment No. 2 to the Registration Statement on Form N-2 of Credit Suisse High Yield Bond Fund, filed on February 3, 2012 (Securities Act File No. 333-176860).

 

(5) Incorporated by reference to the Credit Suisse High Yield Bond Fund’s Registration Statement on Form N-2, filed on August 4, 2010 (Securities Act File No. 333-168531).

 

(6) Incorporated by reference to the Credit Suisse High Yield Bond Fund’s Registration Statement on Form N-2, filed on September 14, 2012 (Securities Act File No. 333-183901).

 

(7) Incorporated by reference to Post-Effective Amendment No. 43 to the Registration Statement on Form N-1A of Credit Suisse Opportunity Funds, filed on July 5, 2012 (Securities Act File No. 33-92982).

 

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(8) Incorporated by reference to Post-Effective Amendment No. 34 to the Registration Statement on Form N-1A of Credit Suisse Trust, filed on April 19, 2011 (Securities Act File No. 33-58125).

 

Item 26. Marketing Arrangements

 

See Exhibit 2(h) to this Registration Statement.

 

Item 27. Other Expenses of Issuance and Distribution

 

The following table sets forth the estimated expenses to be incurred in connection with the offer described in this Registration Statement:

 

Legal

 

$

90,000

 

Printing and Mailing

 

43,925

 

SEC Registration Fee

 

5,456

 

FINRA Fees

 

6,500

 

Auditing fees and expenses

 

25,000

 

Other

 

10,000

 

Total

 

$

180,881

 

 


Note: All amounts are estimates.

 

Item 28. Persons Controlled by or Under Common Control with the Registrant

 

None.

 

Item 29. Number of Holders of Shares

 

As of September 30, 2012, there are the following number of Record Holders:

 

 

 

Number of

 

Title of Class

 

Record Holders

 

Common Stock

 

1,237

 

 

Item 30. Indemnification

 

Section 2-418 of the General Corporation Law of the State of Maryland, Article VIII of the Fund’s Articles of Incorporation, Article VII of the Fund’s Bylaws and the Dealer Manager Agreement to be filed as Exhibit (h)(1) provide for indemnification.

 

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the “Act”), may be permitted to directors, officers and controlling persons of the Fund, pursuant to the foregoing provisions or otherwise, the Fund has been advised that in the opinion of the Securities and Exchange Commission (the “SEC”) such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Fund of expenses incurred or paid by a director, officer or controlling person of the Fund in the 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 Fund 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 Act and will be governed by the final adjudication of such issue.

 

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Item 31. Business and Other Connections of Investment Adviser

 

Credit Suisse acts as investment adviser to the Registrant. Credit Suisse renders investment advice to a wide variety of individual and institutional clients. The list required by this Item 31 of officers and Trustees of Credit Suisse, together with information as to their other business, profession, vocation or employment of a substantial nature during the past two years, is incorporated by reference to Schedules A and D of Form ADV filed by Credit Suisse (SEC File No. 801-37170).

 

Item 32. Location of Accounts and Records

 

(1)            Credit Suisse Asset Management Income Fund, Inc.
One Madison Avenue
New York, New York 10010
(Fund’s Articles, By-laws and minute books)

 

(2)            Credit Suisse Asset Management, LLC
One Madison Avenue
New York, New York 10010
(records relating to its functions as investment adviser)

 

(3)            State Street Bank and Trust Company
One Lincoln Street
Boston, Massachusetts 02111
(records relating to its functions as administrator, custodian and accounting agent)

 

(4)            Computershare Trust Company, N.A.
P.O. Box 43078
Providence, Rhode Island 02940
(records relating to its functions as shareholder servicing agent)

 

Item 33. Management Services

 

Not Applicable.

 

Item 34. Undertakings

 

(1)  The Registrant hereby undertakes to suspend the offering of Shares until the prospectus is amended if:

 

(a)           Subsequent to the effective date of this registration statement, the net asset value declines more than ten percent from its net asset value as of the effective date of this registration statement; or

 

(b)          The net asset value increases to an amount greater than the net proceeds as stated in the prospectus included in this registration statement.

 

(2) Not applicable.

 

(3)  Any securities not taken in a rights offering by shareholders are to be reoffered to the public, an undertaking to supplement the prospectus, after the expiration of the subscription period, to set forth the results of the subscription offer, the transactions by underwriters during the subscription period, the amount of unsubscribed securities to be purchased by underwriters, and the terms of any subsequent reoffering thereof. If any public offering by the underwriters of the securities being registered is to be made on terms differing from those set forth on the cover page of the prospectus, we will file a post-effective amendment to set forth the terms of such offering.

 

(4)  The securities being registered will be offered on a delayed on continuous basis in reliance on Rule 415 under the Securities Act.  Accordingly, the Registrant undertakes

 

C-4



 

(a)           to file, during and period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

 

(1)           to include any prospectus required by Section 10(a)(3) of the Securities Act;

 

(2)           to reflect in the prospectus any facts or events after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and

 

(3)           to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.

 

(b)          that for the purpose of determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

 

(c)           to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering; and

 

(d)          that, for the purpose of determining liability under the Securities Act to any purchaser, if the Registrant is subject to Rule 430C: Each prospectus filed pursuant to Rule 497(b), (c), (d) or (e) under the Securities Act as part of a registration statement relating to an offering, other than prospectuses filed in reliance on Rule 430A under the Securities Act shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(e)           that for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution of securities:

 

The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to the purchaser:

 

(1)           any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 497 under the Securities Act.

 

(2)           the portion of any advertisement pursuant to Rule 482 under the Securities Act relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and

 

(3)           any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

 

(5)                                  (a)  The Registrant hereby undertakes that for the purpose of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in

 

C-5



 

reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

 

(b)  The Registrant hereby undertakes that for the purposes of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(6) The Registrant undertakes to send by first class mail or other means designed to ensure equally prompt delivery within two business days of receipt of a written or oral request, any Statement of Additional Information.

 

C-6



 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, and the Investment Company Act of 1940, as amended, the Registrant certifies that it has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York and the State of New York, on the 25 th  day of October, 2012.

 

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

 

 

 

By:

/s/John G. Popp

 

 

John G. Popp

 

 

Chief Executive Officer and President

 

Pursuant to the requirements of the Securities Act of 1933, as amended this Registration Statement has been signed below by the following persons in the capacities and on the date indicated:

 

SIGNATURE

 

TITLE

 

DATE

 

 

 

 

 

/s/John G. Popp

 

Chief Executive Officer and President

 

October 25, 2012

John G. Popp

 

 

 

 

 

 

 

 

 

/s/ Thomas Sipp

 

Chief Financial Officer

 

October 25, 2012

Thomas Sipp

 

 

 

 

 

 

 

 

 

*

 

Director

 

October 25, 2012

Enrique Arzac

 

 

 

 

 

 

 

 

 

*

 

Director

 

October 25, 2012

Terry F. Bovarnick

 

 

 

 

 

 

 

 

 

*

 

Director

 

October 25, 2012

James J. Cattano

 

 

 

 

 

 

 

 

 

*

 

Director

 

October 25, 2012

Lawrence J. Fox

 

 

 

 

 

 

 

 

 

*

 

Chairman of the Board and Director

 

October 25, 2012

Steven N. Rappaport

 

 

 

 

 

 

 

 

 

*By:

/s/ Karen Regan

 

 

 

 

 

Karen Regan, as Attorney-in-Fact

 

 

 

 

 

C-7



 

EXHIBIT INDEX

 

EXHIBIT

 

 

NUMBER

 

DESCRIPTION

(a)(2)

 

Articles of Transfer, dated May 9, 2001

 

 

 

(a)(3)

 

Articles Supplementary, dated July 27, 2001

 

 

 

(a)(4)

 

Articles Supplementary, dated August 14, 2008

 

 

 

(a)(5)

 

Articles Supplementary, dated May 4, 2009

 

 

 

(b)(1)

 

Amended and Restated By-laws

 

 

 

(b)(2)

 

Amendment to the Amended and Restated By-laws

 

 

 

(b)(3)

 

Amendment to the Amended and Restated By-laws

 

 

 

(b)(4)

 

Amendment to the Amended and Restated By-laws

 

 

 

(e)

 

Dividend Reinvestment and Cash Purchase Plan

 

 

 

(g)

 

Restated Investment Advisory Agreement with Credit Suisse Asset Management

 

 

 

(j)(2)

 

Amendment to Custodian Agreement, dated April 26, 2001

 

 

 

(j)(3)

 

Amendment to Custodian Agreement, dated May 16, 2001

 

 

 

(j)(4)

 

Amendment to Custodian Agreement, dated November 16, 2005

 

 

 

(j)(5)

 

Amendment to Custodian Agreement, dated November 19, 2007

 

 

 

(k)(1)

 

Registrar, Transfer Agency and Services Agreement with EquiServe, Inc.

 

 

 

(k)(2)

 

Amendment to Registrar, Transfer Agency and Services Agreement, dated September 30, 2003

 

 

 

(k)(3)

 

Amendment to Registrar, Transfer Agency and Services Agreement, effective January 1, 2011

 

 

 

(k)(6)

 

Amendment No. 2 to the Administration Agreement, dated October 9, 2012

 

 

 

(s)

 

Power of Attorney

 


Exhibit 99.(a)(2)

 

ARTICLES OF TRANSFER

 

of

 

CREDIT SUISSE ASSET MANAGEMENT STRATEGIC

GLOBAL INCOME FUND, INC.

 

and

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

Credit Suisse Asset Management Strategic Global Income Fund, Inc., a Maryland corporation (herein sometimes called “Transferor”) and, Credit Suisse Asset  Management Income Fund, Inc., a Maryland corporation (herein sometimes called “Transferee”), hereby certify to the Maryland State Department of Assessments and Taxation that:

 

FIRST:                     Transferor has agreed to sell and transfer all of its property and assets to Transferee.

 

SECOND:               The names of the corporations party, to these Articles of Transfer are Credit Suisse Asset Management Strategic Global Income Fund, Inc. and Credit Suisse Asset Management Income Fund, Inc., both corporations organized and existing under the laws of the State of Maryland.

 

THIRD:                   The principal office of Transferor in Maryland is located in Baltimore City, Maryland.  The principal office of Transferee in Maryland is located in Baltimore City, Maryland.  Transferor does not own any interest in land in the State of Maryland.

 

FOURTH:               The address and principal place of business of Transferee are 466 Lexington Avenue, 16 th  Floor, New York, New York 10017.

 

FIFTH:                    The nature and amount of the consideration to be paid, transferred or issued by Transferee for the property and assets of Transferor are as follows:

 

Transferee will:

 

(a)              assume all of the liabilities of Transferor;

 

(b)              subject to (c) below, issue to Transferor, for subsequent distribution to the stockholders of Transferor, the number of shares of Transferee’s common stock, par value $.001 per share, determined by dividing the value of the net assets of the Transferor sold and transferred to Transferee hereunder by the net asset value of one share of common stock of Transferee, all determined as of the close of regular trading on the New York Stock Exchange on the last business day preceding the  day on which these Articles of Transfer become effective.

 



 

(c)            No fractional shares of common stock of Transferee will be distributed to the stockholders of Transferor.  In lieu thereof, Transferee will pay to Transferor cash in an amount equal to the aggregate net asset value, determined as provided in (b) above, of all fractional shares of common stock of Transferee otherwise distributable to Transferor’s stockholders, which cash will then be distributed by Transferor to its respective stockholders in the appropriate amounts.  The number of shares of common stock of Transferee otherwise issuable to Transferor hereunder will be  reduced by that number of shares having an aggregate net asset value equal to the cash so paid to Transferor.

 

(d)            With respect to any Transferor stockholder holding certificates representing shares of common stock of Transferor as of the Effective Time (as this term is defined below), and subject to Transferee being informed thereof in writing by the Transferor, Transferee will not permit such stockholder to receive new certificates evidencing ownership of Transferee’s common stock until such stockholder has surrendered his or her outstanding certificates previously evidencing ownership of the common stock of Transferor, or, in the event of lost certificates has posted adequate bond (as determined by Transferee).  Dividends payable to stockholders of record of shares of common stock of Transferee as of any date after the Effective Time and prior to the exchange of certificates by any former stockholder of Transferor 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 Transferor for exchange.

 

(e)            The foregoing terms, together with related terms and conditions, are further set forth in the Agreement and Plan of Reorganization, dated as of March 27, 2001, between Transferor and Transferee.

 

SIXTH:                    (a)            The Board of Directors of Transferor, at a meeting duly called and held on February 21, 2001 and by unanimous written consent dated March 27, 2001, adopted resolutions declaring that the transaction set forth in these Articles of Transfer (the “Reorganization”) was advisable and directing that the Reorganization be submitted for action thereon by the stockholders of Transferor at a special meeting.  The Reorganization was approved by the stockholders of Transferor at the special meeting duly called for such purpose and held on May 1, 2001 by the affirmative vote of the holders of at least a majority of the total number of shares of common stock outstanding and entitled to vote on the matter (with any shares voted by Credit Suisse Asset Management, LLC or the Directors of Transferor not being counted in the affirmative).  By such actions, the terms and conditions of the Reorganization were duly advised by the Board of Directors and authorized and approved by the stockholders of Transferor in the manner and by the vote required by the laws of Maryland and Transferor’s Charter.

 

(b)            The Board of Directors of Transferee, at a meeting duly called and held on February 21, 2001 and by unanimous written consent dated March 27, 2001, adopted resolutions declaring that the Reorganization was advisable and directing that the Reorganization be submitted for action by the stockholders of Transferee at its annual stockholders meeting.  The Reorganization was approved by the stockholders of Transferee at a meeting duly called for such purpose and held on May 1, 2001 by at least the vote required by the listing rules of the New York Stock Exchange (with any shares voted affirmatively by Credit

 

2



 

Suisse Asset Management, LLC or the Directors of Transferee not being counted as votes cast).  By such actions, the terms and conditions of the Reorganization were duly advised by the Board Of Directors and authorized and approved by the stockholders of Transferee in the manner and by the vote required by the laws of Maryland, the Transferee’s Charter, and the rules of the New York Stock Exchange.

 

SEVENTH:              These Articles of Transfer will become effective in accordance with the laws of the State of Maryland on May 14, 2001 at 9:00 a.m. (the “Effective Time”).

 

EIGHTH:                 These Articles of Transfer may be executed in counterparts.  All counterparts shall collectively constitute the Articles of Transfer.

 

IN WITNESS WHEREOF, Credit Suisse Asset Management Income Fund, Inc. and Credit Suisse Asset Management Strategic Global Income Fund, Inc. each caused these Articles to be signed in its respective corporate name and on its behalf by its Senior Vice President and witnessed by its Secretary as of the 9 th  day of May, 2001, and each officer signing this document below on behalf of Credit Suisse Asset Management Income Fund, Inc. and Credit Suisse Asset Management Strategic Global Income Fund, Inc., respectively, acknowledges it to be the corporate act of Credit Suisse Asset Management Income Fund, Inc. and Credit Suisse Asset Management Strategic Global Income Fund, Inc., respectively, and states that, to the best of his or her knowledge, information and belief, all matters and facts set forth herein with respect to the authorization and approval by Credit Suisse Asset Management Income Fund, Inc. and Credit Suisse Asset Management Strategic Global Income Fund, Inc., respectively, of the transaction provided for in these Articles are true in all material respects and that this verification is made under the penalties of perjury.

 

 

WITNESS:

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

 

 

/s/  Michael A. Pignataro

 

By:

/s/                                    

 (SEAL)

Secretary

 

 

Senior Vice President

 

 

 

 

 

 

WITNESS:

 

CREDIT SUISSE ASSET MANAGEMENT STRATEGIC GLOBAL INCOME FUND, INC.

 

 

 

/s/  Michael A. Pignataro

 

 

 

 

By:

/s/                                    

 (SEAL)

Secretary

 

 

Senior Vice President

 

3


Exhibit 99.(a)(3)

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

ARTICLES SUPPLEMENTARY

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC., a Maryland corporation having its principal office in Baltimore City, Maryland, (hereinafter called the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “Department”) that:

 

FIRST:  By Resolution of its Board of Directors on July 27, 2001, the Corporation elected to become subject to the following provisions of Subtitle 8 of Title 3 of the Maryland General Corporation Law (the “MGCL”): Section 3-803, which provides for a classified board of directors of three classes each having a three year term; and Section 3-804 which provides for at least a two-thirds vote of the stockholders for the removal of directors, and then only for cause in accordance with Section 2-406(b)(3) of the MGCL, and vests in the Directors the power to fix the number of directors and to fill vacancies on the board of directors.  In the event of any inconsistency with the charter or bylaws of the Corporation, the aforesaid MGCL provisions will govern.

 

SECOND:  By Resolution of the Board of Directors on July 27, 2001, the Corporation classified its Board of Directors into three classes in accordance with Section 3-803 of the MGCL as follows: Class I Directors shall initially be James S. Pasman, Jr. and William W. Priest, Jr., and shall have an initial term continuing until the annual meeting of stockholders in 2002 and until their successors are elected and qualify; Class II Directors shall initially be Lawrence J. Fox and James P. McCaughan, and shall have an initial term continuing until the annual meeting of stockholders in 2003 and until their successors are elected and qualify; and Class III Director shall initially be Enrique R. Arzac, and shall have an initial term continuing until the annual meeting of stockholders in 2004 and until his successor is elected and qualifies. At each annual meeting of the stockholders of the Corporation, the successors to the class of Directors whose term expires at that meeting shall be elected to hold office for a term continuing until the annual meeting of stockholders held in the third year following the year of their election and until their successors are elected and qualify. The classification set forth above may be changed from time-to-time by vote of the Board of Directors to reflect such matters as increase or decrease in the number of directors and so that each class, to the extent possible, will have the same number of Directors.

 



 

IN WITNESS WHEREOF, Credit Suisse Asset Management Income Fund, Inc. has caused these presents to be signed in its name and on its behalf by its Vice President and witnessed by its Assistant Secretary as of this 27 th  day of July, 2001, and the undersigned officers acknowledge that these Articles Supplementary are the act of the Corporation, that to the best of their knowledge, information and belief all matters and facts set forth herein relating to the authorization and approval of these Articles are true in all material respects, and that this statement is made under the penalties of perjury.

 

WITNESS:

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

 

 

 

 

 

/s/  Maxine C. Evertz

 

/s/  Michael A. Pignataro

Maxine C. Evertz

 

Michael A. Pignataro

Assistant Secretary

 

Vice President

 

2


Exhibit 99.(a)(4)

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

ARTICLES SUPPLEMENTARY

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC., a Maryland corporation having its principal Maryland office in Baltimore City, Maryland (hereinafter called the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “Department”) that:

 

FIRST:  Under a power contained in Title 3, Subtitle 8 of the Maryland General Corporation Law (“MGCL”), and by a resolution of its Board of Directors, the Corporation has elected to become subject to the provisions of:  Section 3-804(a) of the MGCL, which requires at least a two-thirds stockholder vote for the removal of directors, and then only for cause in accordance with Section 2-406(b)(3) of the MGCL; and Section 3-805 of the MGCL, under which a special meeting of the stockholders requested by stockholders may be called only upon the written request of stockholders entitled to cast at least a majority of the votes entitled to be cast at the meeting, and certain procedural requirements are specified in connection with such special meetings of the stockholders.  In the event of any inconsistency with the charter or bylaws of the Corporation, the aforesaid MGCL provisions will govern.

 

SECOND:  The election to become subject to Sections 3-804(a) and 3-805 of the MGCL has been approved by the Board of Directors of the Corporation in the manner and by the vote required by law.

 

IN WITNESS WHEREOF, Credit Suisse Asset Management Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Secretary as of this 14th day of August, 2008, and the undersigned officers acknowledge that these Articles Supplementary are the act of the Corporation, that to the best of their knowledge, information and belief all matters and facts set forth herein relating to the authorization and approval of these Articles are true in all material respects, and that this statement is made under the penalties of perjury.

 

 

WITNESS:

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

 

 

 

 

 

/s/J. Kevin Gao

 

By:

/s/George R. Hornig

J. Kevin Gao

 

 

George R. Hornig

Secretary

 

 

President

 


Exhibit 99.(a)(5)

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

ARTICLES SUPPLEMENTARY

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC., a Maryland corporation having its principal Maryland office in Baltimore City, Maryland (hereinafter called the “Corporation”), hereby certifies to the State Department of Assessments and Taxation of Maryland (the “Department”) that:

 

FIRST:  Under a power contained in Title 3, Subtitle 8 of the Maryland General Corporation Law (“MGCL”), and by a resolution of its Board of Directors, the Corporation has elected to repeal the Corporation’s prior election to become subject to Sections 3-804(a) and 3-805 of the MGCL.

 

SECOND:  The election to repeal the Corporation’s prior election to become subject to Sections 3-804(a) and 3-805 of the MGCL has been approved by the Board of Directors of the Corporation in the manner and by the vote required by law.

 

IN WITNESS WHEREOF, Credit Suisse Asset Management Income Fund, Inc. has caused these presents to be signed in its name and on its behalf by its President and witnessed by its Secretary as of this 4th day of May, 2009, and the undersigned officers acknowledge that these Articles Supplementary are the act of the Corporation, that to the best of their knowledge, information and belief all matters and facts set forth herein relating to the authorization and approval of these Articles are true in all material respects, and that this statement is made under the penalties of perjury.

 

 

WITNESS:

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

 

 

 

 

 

/s/J. Kevin Gao

 

By:

/s/George R. Hornig

J. Kevin Gao

 

 

George R. Hornig

Secretary

 

 

President

 


Exhibit 99.(b)(1)

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

A Maryland Corporation

 

BY-LAWS

 



 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

Amended and Restated By-Laws

 

ARTICLE I

Stockholders

 

SECTION 1.           Place of Meeting .  All meetings of the Stockholders shall be held at the principal office of the Corporation in the State of Maryland or at such other place within the United States as may from time to time be designated by the Board of Directors and stated in the notice of such meeting.

 

SECTION 2.           Annual Meetings .  The annual meeting of the Stockholders of the Corporation shall be held during the month of May of each year on such date and at such hour as may from time to time be designated by the Board of Directors and stated in the notice of such meeting, for the purpose of electing Directors for the ensuing year and for the transaction of such other business as may properly be brought before the meeting.

 

SECTION 3.           Special or Extraordinary Meetings .  Special or extraordinary meetings of the Stockholders for any purpose or purposes may be called by the Chairman of the Board, the President or a majority of the Board of Directors, and shall be called by the Secretary upon receipt of the request in writing signed by Stockholders holding at least a majority of the common stock issued and outstanding and entitled to vote thereat.  Such request shall state the purpose or purposes of the proposed meeting.  The Secretary shall inform such Stockholders of the reasonably estimated costs of preparing and mailing such notice of meeting and upon payment to the Corporation of such costs, the Secretary shall give notice stating the purpose or purposes of the meeting as required in this Section 3 to all Stockholders entitled to notice of such meeting.  At any special meeting of the Stockholders, only such business shall be conducted as shall be properly brought before the meeting and shall have been indicated in the call for the meeting as provided in this Section 3 and the Corporation’s notice of meeting given in accordance with the provisions of

 

2



 

Section 4 of this Article I of these Bylaws.  The chairman of the special meeting shall, if the facts warrant, determine and declare to the meeting that business was not properly brought before the meeting or is not a proper subject for the meeting; any such business shall not be considered or transacted.

 

SECTION 4.           Notice of Meetings of Stockholders .  Not less than ten days’ and not more than ninety days’ written or printed notice of every meeting of Stockholders, stating the time and place thereof (and the general nature of the business proposed to be transacted at any special or extraordinary meeting), shall be given to each stockholder entitled to vote thereat by leaving the same with such stockholder or at such stockholder’s residence or usual place of business or by mailing it, postage prepaid, and addressed to such stockholder at such Stockholders’ address as it appears upon the books of the Corporation.  If mailed, notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder as aforesaid.

 

No notice of the time, place or purpose of any meeting of Stockholders need be given to any stockholder who attends in person or by proxy or to any stockholder who, in writing executed and filed with the records of the meeting, either before or after the holding thereof, waives such notice.

 

SECTION 5.  Notice of Stockholder Business at Annual Meetings .  (a)  At any annual meeting of the Stockholders, only such business shall be conducted as shall have been properly brought before the meeting.  To be properly brought before an annual meeting, the business must (i) be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise be properly brought before the meeting by or at the direction of the Board of Directors, or (iii) otherwise (x) be properly brought before the meeting by a Stockholder who is entitled to vote at the meeting, who complies with the notice procedures set forth in this Section 5 and who is a Stockholder of record at the time such notice is delivered to the Secretary of the Corporation, and (y) constitute a proper subject to be brought before the meeting.

 

3



 

(b)     For business to be properly brought before an annual meeting by a Stockholder, the Stockholders must have given timely notice thereof in writing to the Secretary of the Corporation.  To be timely, such notice must be delivered to or mailed and received at the principal executive offices of the Corporation not later than 45 days before the date in the then current year corresponding to the date on which the Corporation first mailed its proxy materials for the annual meeting held in the prior year; provided , however , that in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the preceding year’s annual meeting, notice by such Stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which notice or public announcement of the date of such meeting was given or made.  In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a Stockholder’s notice as described above.

 

(c)     Any such notice by a Stockholder shall set forth as to each matter the Stockholder proposes to bring before the annual meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (ii) the name and address, as they appear on the Corporation’s books, of the Stockholder proposing such business, (iii) the class and number of shares of the capital stock of the Corporation which are beneficially owned by the Stockholder, (iv) a representation that the Stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to present such business, (v) whether the Stockholder intends or is part of a group which intends to solicit proxies from other Stockholders in support of such business, and (vi) any material interest of the Stockholder in such business.

 

(d)     Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section 5.  The chairman of the annual meeting shall, if the facts warrant, determine and declare to

 

4



 

the meeting that (i) the business proposed to be brought before the meeting is not a proper subject thereof and/or (ii) such business was not properly brought before the meeting in accordance with the provisions of this Section 5, and, if he should so determine, he shall so declare to the meeting that any such business shall not be considered or transacted.

 

(e)     For purpose of Article I, Section 5 and Article II, Section 2 of these Bylaws, “public announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Bloomberg or comparable news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934 or the Investment Company Act of 1940, as amended.

 

SECTION 6.           Record Dates .  The Board of Directors may fix, in advance, a date not exceeding ninety days preceding the date of any meeting of Stockholders, any dividend payment date or any date for the allotment of rights, as a record date for the determination of the Stockholders entitled to notice of and to vote at such meeting or entitled to receive such dividends or rights, as the case may be; and only Stockholders of record on such date shall be entitled to notice of and to vote at such meeting or to receive such dividends or rights, as the case may be.  In the case of a meeting of Stockholders, such date shall not be less than ten days prior to the date fixed for such meeting.

 

SECTION 7.           Quorum, Adjournment of Meetings .  The presence in person or by proxy of the holders of record of one-third of the shares of common stock of the Corporation issued and outstanding and entitled to vote thereat shall constitute a quorum at all meetings of the Stockholders except as otherwise provided by statute, by the Articles of Incorporation or by these Bylaws.  If, however, such quorum shall not be present or represented at any meeting of the Stockholders, the holders of a majority of the stock present in person or by proxy or the Chairman of the meeting shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, to a date not more than 120 days after the original record date, until

 

5



 

the requisite amount of stock entitled to vote at such meeting shall be present.  A meeting of Stockholders convened on the date for which it was called at which a quorum is present may also be adjourned from time to time for any other purpose without further notice other than by announcement at the meeting by the Chairman of the meeting or upon vote of the Stockholders, but not to a date more than 120 days after the original date.  At such adjourned meeting any business may be transacted which might have been transacted at the meeting as originally notified.

 

SECTION 8.           Voting and Inspectors .  At all meetings, Stockholders of record entitled to vote thereat shall have one vote for each share of common stock standing in his name on the books of the Corporation (and such Stockholders of record holding fractional shares, if any, shall have proportionate voting rights) on the date for the determination of Stockholders entitled to vote at such meeting, either in person or by proxy.

 

All questions shall be decided by a majority of the votes cast at a duly constituted meeting (except for all elections which shall be by a plurality of votes cast), unless the question is one upon which, by express provisions of applicable statutes, of the Articles of Incorporation or of these Bylaws, a different vote is required, in which case such express provisions shall govern and control the decision of such question.

 

At any election of Directors, the Chairman of the meeting may, and upon the request of the holders of ten percent (10%) of the stock entitled to vote at such election shall, appoint one or more inspectors of election who shall first subscribe an oath or affirmation to execute faithfully the duties of inspectors at such election with strict impartiality and according to the best of their ability, and shall after the election make a certificate of the result of the vote taken.  No candidate for the office of Director shall be appointed such Inspector.

 

SECTION 9.           Proxies .  Any Stockholder entitled to vote at any meeting of Stockholders may vote either in person or by written proxy signed by the Stockholder or his authorized agent.  A Stockholder entitled to vote at any meeting of Stockholders may also authorize

 

6



 

another person or persons to act as a proxy for him via telephone, the internet or any other means authorized by Maryland law.  Unless a proxy provides otherwise, it is not valid more than eleven months after its date.  A copy, facsimile transmission or other reproduction of a writing or transmission may be substituted for the original writing or transmission for any purpose for which the original writing or transmission could be used.  Every proxy shall be dated, but need not be sealed, witnessed or acknowledged.  Every proxy shall be revocable at the pleasure of the person executing it or of his personal representatives or assigns.  All proxies shall be delivered to the Secretary of the Corporation, or to the person acting as Secretary of the Meeting being voted.  A proxy with respect to stock held in the name of two or more persons shall be valid if executed by one of them unless, at or prior to exercise of such proxy, the Corporation receives a specific written notice to the contrary from any one of them.  A proxy purporting to be executed by or on behalf of a stockholder shall be valid unless challenged at or prior to its exercise.

 

SECTION 10.         Conduct of Stockholders’ Meetings .  The meetings of the Stockholders shall be presided over by the Chairman of the Board, or if he is not present, by the President, or if he is not present, by a Vice-President, or if none of them is present, by a Chairman to be elected at the meeting.  The Secretary of the Corporation, if present, shall act as a Secretary of such meetings, or if he is not present, an Assistant Secretary shall so act; if neither the Secretary nor the Assistant Secretary is present, then the meeting shall elect its Secretary.

 

The Board of Directors of the Corporation shall be entitled to make such rules or regulations for the conduct of meetings of Stockholders as it shall deem necessary, appropriate or convenient.  Subject to such rules and regulations of the Board of Directors, if any, the chairman of the meeting shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are necessary, appropriate or convenient for the proper conduct of the meeting, including, without limitation, adjourning the meeting from time to time in accordance with Article I, Section 7, establishing an order of business

 

7



 

for the meeting, rules and procedures for maintaining order at the meeting and the safety of those present, limitations on participation in such meeting to Stockholders of record of the Corporation and their duly authorized and constituted proxies, and such other persons as the chairman shall permit, limitations on the time allotted to questions or comments by participants and regulation of the opening and closing of the polls for balloting and matters which are to be voted on by ballot.

 

SECTION 11.         Concerning Validity of Proxies, Ballots, etc .  At every meeting of the Stockholders, all proxies shall be received and taken in charge of and all ballots shall be received and canvassed by the Secretary of the meeting, who shall decide all questions touching the qualification of voters, the validity of the proxies and the acceptance or rejection of votes, unless inspectors of election shall have been appointed by the Chairman of the meeting, in which event such inspectors of election shall decide all such questions.

 

SECTION 12.         Action without Meeting .  Any action to be taken by Stockholders may be taken without a meeting if (1) all Stockholders entitled to vote on the matter consent to the action in writing, (2) all Stockholders entitled to notice of the meeting but not entitled to vote at it sign a written waiver of any right to dissent and (3) said consents and waivers are filed with the records of the meetings of Stockholders.  Such consent shall be treated for all purposes as a vote at the meeting.

 

ARTICLE II

Board of Directors

 

SECTION 1.           Number and Tenure of Office .  The business and affairs of the Corporation shall be conducted and managed by a Board of Directors consisting of not less than three nor more than nine Directors; as may determined from time to time by vote of a majority of the entire Board of Directors.  Directors need not be stockholders.  The Board of Directors shall be divided into three classes, with one class to be elected at each annual meeting as provided in the Charter.

 

8



 

SECTION 2.           Director Nominations .  (a)  Only persons who are nominated in accordance with the procedures set forth in this Section 2 shall be eligible for election or re-election as Directors.  Nominations of persons for election or re-election to the Board of Directors of the Corporation may be made at an annual meeting of Stockholders or at a special meeting of Stockholders as to which the call for the meeting and the Corporation’s notice of meeting provide for the election of Directors, by or at the direction of the Board of Directors or by any Stockholder of the Corporation who is entitled to vote for the election of such nominee at the meeting, who complies with the notice procedures set forth in this Section 2 and who is a Stockholder of record at the time such notice is delivered to the Secretary of the Corporation.

 

(b)     Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice delivered in writing to the Secretary of the Corporation.  To be timely, (i) any notice of nomination(s) by a Stockholder given in connection with an annual meeting must be delivered to or mailed and received at the principal executive offices of the Corporation not later than 45 days before the date in the then current year corresponding to the date on which the Corporation first mailed its notice and proxy materials for the annual meeting held in the prior year; provided , however , that in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the preceding year’s annual meeting, notice by such Stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which notice or public announcement of the date of such meeting was given or made, and (ii) any notice of nomination(s) given in connection with a special meeting as to which the call for the meeting and the Corporation’s notice of meeting provide for the election of Directors must be delivered to or mailed and received at the principal executive offices of the Corporation not later than 60 days prior to the date of the meeting; provided , however , that if less than 70 days’ notice or prior public disclosure of the date of such special meeting is given or made to Stockholders, any such notice by a Stockholder

 

9



 

to be timely must be so received not later than the close of business on the 10th day following the day on which notice of the date of such special meeting was given or such public disclosure was made.  In no event shall the public announcement of an adjournment of a meeting commence a new time period for the giving of a Stockholder’s notice of nomination(s) as described above.

 

(c)     Any such notice by a Stockholder shall set forth (i) as to each person whom the Stockholder proposes to nominate for election or re-election as a Director, (A) the name, age, business address and residence address of such person, (B) the principal occupation or employment of such person, (C) the class and number of shares of the capital stock of the Corporation which are beneficially owned by such person and (D) any other information relating to such person that is required to be disclosed in solicitations of proxies for the election of Directors pursuant to Regulation 14A under the Securities Exchange Act of 1934 or any successor regulation thereto (including without limitation such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected and whether any person intends to seek reimbursement from the Corporation of the expenses of any solicitation of proxies should such person be elected a Director of the Corporation); and (ii) as to the Stockholder giving the notice (A) the name and address, as they appear on the Corporation’s books, of such Stockholder, (B) the class and number of shares of the capital stock of the Corporation which are beneficially owned by such Stockholder, (C) a representation that the Stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to present such nomination(s) and (D) whether the Stockholder intends or is part of a group which intends to solicit proxies from other Stockholders in support of such nomination(s).  At the request of the Board of Directors any person nominated by the Board of Directors for election as a Director shall furnish to the Secretary of the Corporation that information required to be set forth in a Stockholder’s notice of nomination which pertains to the nominee.

 

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(d)     If a notice by a Stockholder is required to be given pursuant to this Section 2, no person shall be entitled to receive reimbursement from the Corporation of the expenses of a solicitation of proxies for the election as a Director of a person named in such notice unless such notice states that such reimbursement will be sought from the Corporation and the Board of Directors approves such reimbursement.  The chairman of the meeting shall, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the procedures prescribed by the Bylaws, and, if he should so determine, he shall so declare to the meeting and the defective nomination shall be disregarded for all purposes.

 

SECTION 3.           Vacancies .  In case of any vacancy in the Board of Directors through death, resignation, removal or other cause, a majority of the remaining Directors, although a majority is less than a quorum, by an affirmative vote, may elect a successor to hold office for the remainder of the unexpired term of the relevant class of Directors in which the vacancy occurred and until his successor is chosen and qualifies.

 

SECTION 4.           Increase or Decrease in Number of Directors .  The Board of Directors, by the vote of a majority of the entire Board, may increase the number of Directors and may elect Directors to fill the vacancies created by any such increase in the number of Directors for the entire remaining term of the relevant class of Directors and until their successors are duly chosen and qualified.  The Board of Directors, by the vote of a majority of the entire Board, may likewise decrease the number of Directors to a number not less than three.

 

SECTION 5.           Resignation .  A Director may resign at any time by giving written notice of his resignation to the Board of Directors or the Chairman of the Board or the Secretary of the Company.  Any resignation shall take effect at the time specified in it or, should the time when it is to become effective not be specified in it, immediately upon its receipt.  Acceptance of a resignation shall not be necessary to make it effective unless the resignation states otherwise.

 

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SECTION 6.           Place of Meeting .  The Directors may hold their meetings, have one or more offices, and keep the books of the Corporation, outside the State of Maryland, at any office or offices of the Corporation or at any other place as they may from time to time by resolution determine, or in the case of meetings, as they may from time to time by resolution determine or as shall be specified or fixed in the respective notices or waivers of notice thereof.

 

SECTION 7.           Regular Meetings .  Regular meetings of the Board of Directors shall be held at such time and on such notice as the Directors may from time to time determine.

 

The annual meeting of the Board of Directors shall be held as soon as practicable after the annual meeting of the Stockholders for the election of Directors.

 

SECTION 8.           Special Meetings; Waiver of Notice .  Special meetings of the Board of Directors may be held from time to time upon call of the Chairman of the Board, and must be held upon call of the Secretary on the written request of a majority of the Directors, by oral or telegraphic or written notice duly served on or sent or mailed to each Director not less than one day before such meeting.  No notice need be given to any Director who attends in person or to any Director who, in writing executed and filed with the records of the meeting either before or after the holding thereof, waives such notice.  Such notice or waiver of notice need not state the purpose or purposes of such meeting.

 

SECTION 9.           Quorum .  One-third of the Directors then in office shall constitute a quorum for the transaction of business, provided that a quorum shall in no case be less than two Directors.  If at any meeting of the Board there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time until a quorum shall have been obtained.  The act of the majority of the Directors present at any meeting at which there is a quorum shall be the act of the Directors, except as may be otherwise specifically provided by statute or by the Articles of Incorporation or by these By-Laws.

 

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SECTION 10.         Executive Committee .  The Board of Directors may, by the affirmative vote of a majority of the whole Board, appoint from the Directors an Executive Committee to consist of one or more Directors as the Board may from time to time determine.  The Chairman of the Committee shall be elected by the Board of Directors.  The Board of Directors by such affirmative vote shall have power at any time to change the members of such Committee and may fill vacancies in the Committee by election from the Directors.  When the Board of Directors is not in session, to the extent permitted by law the Executive Committee shall have and may exercise any or all of the powers of the Board of Directors in the management of the business and affairs of the Corporation.  The Executive Committee may fix its own rules of procedure, and may meet when and as provided by such rules or by resolution of the Board of Directors, but the presence of a majority shall be necessary to constitute a quorum if the Executive Committee has more than two members.  During the absence of a member of the Executive Committee, the remaining members, whether or not they constitute a quorum, may appoint a member of the Board of Directors to act in his place.

 

SECTION 11.         Audit Committee .  There shall be an Audit Committee of two or more Directors who are not “interested persons” of the Corporation (as defined in the Investment Company Act of 1940, as amended) appointed by the Board who may meet at stated times or on notice to all by any of their own number.  The Committee’s duties shall include reviewing both the audit and other work of the Corporation’s independent accountants, recommending to the Board of Directors the independent accountants to be retained, and reviewing generally the maintenance and safekeeping of the Corporation’s records and documents.

 

SECTION 12.         Other Committees .  The Board of Directors, by the affirmative vote of a majority of the whole Board, may appoint from the Directors other committees which shall in each case consist of one or more Directors and shall have and may exercise such powers as the Board may determine in the resolution appointing them.  A majority of all the members of any

 

13



 

such committee which has more than two members may determine its action and fix the time and place of its meetings, unless the Board of Directors shall otherwise provide.  The Board of Directors shall have power at any time to change the members and powers of any such committee, to fill vacancies and to discharge any such committee.

 

SECTION 13.         Telephone Meetings .  Members of the Board of Directors or a committee of the Board of Directors may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time.  Participation in a meeting by these means constitutes presence in person at the meeting, except that for purposes of actions required to be made “in person” by the Investment Company Act of 1940, participation by such means shall not constitute “in person” participation.

 

SECTION 14.         Action Without a Meeting .  Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting, if a written consent to such action is signed by all members of the Board or of such committee, as the case may be, and such written consent is filed with the minutes of the proceedings of the Board or such committee.

 

SECTION 15.         Compensation of Directors .  No Director shall receive any stated salary or fees from the Corporation for his services as such if such Director is, otherwise than by reason of being such Director, an interested person (as such term is defined by the Investment Company Act of 1940, as amended) of the Corporation or of its investment manager or principal underwriter.  Except as provided in the preceding sentence, Directors shall be entitled to receive such compensation from the Corporation for their services as may from time to time be voted by the Board of Directors.

 

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ARTICLE III

Officers

 

SECTION 1.           Executive Officers .  The executive officers of the Corporation shall be chosen by the Board of Directors as soon as may be practicable after the annual meeting of the Stockholders.  These may include a Chairman of the Board of Directors (who shall be a Director) and shall include a President (who shall be a Director), one or more Vice-Presidents (the number thereof to be determined by the Board of Directors), a Secretary and a Treasurer.  The Board of Directors or the Executive Committee may also in its discretion appoint Assistant Secretaries, Assistant Treasurers and other officers, agents and employees, who shall have such authority and perform such duties as the Board or the Executive Committee may determine.  The Board of Directors may fill any vacancy which may occur in any office.  Any two offices, except those of President and Vice-President, may be held by the same person, but no officer shall execute, acknowledge or verify any instrument in more than one capacity, if such instrument is required by law or these By-Laws to be executed, acknowledged or verified by two or more officers.

 

SECTION 2.           Term of Office .  The term of office of all officers shall be one year and until their respective successors are chosen and qualified.  Any officer may be removed from office at any time with or without cause by the vote of a majority of the whole Board of Directors.  Any officer may resign his office at any time by delivering a written resignation to the Board of Directors, the President, the Secretary, or any Assistant Secretary, unless otherwise specified therein, such resignation shall take effect upon delivery.

 

SECTION 3.           Powers and Duties .  The officers of the Corporation shall have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as may from time to time be conferred by the Board of Directors or the Executive Committee.

 

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SECTION 4.           Surety Bonds .  The Board of Directors may require any officer or agent of the Corporation to execute a bond (including, without limitation, any bond required by the Investment Company Act of 1940, as amended, and the rules and regulations of the Securities and Exchange Commission) to the Corporation in such sum and with such surety or sureties as the Board of Directors may determine, conditioned upon the faithful performance of his duties to the Corporation, including responsibility for negligence and for the accounting of any of the Corporation’s property, fund or securities that may come into his hands.

 

ARTICLE IV

Capital Stock

 

SECTION 1.           Certificates for Shares .  Each stockholder of the Corporation shall be entitled to a certificate or certificates for the full shares of stock of the Corporation owned by him in such form as the Board may from time to time prescribe.

 

SECTION 2.           Transfer of Shares .  Shares of the Corporation shall be transferable on the books of the Corporation by the holder thereof in person or by his duly authorized attorney or legal representative, upon surrender and cancellation of certificates, if any, for the same number of shares, duly endorsed or accompanied by proper instruments of assignment and transfer, with such proof of the authenticity of the signature as the Corporation or its agents may reasonably require; in the case of shares not represented by certificates, the same or similar requirements may be imposed by the Board of Directors.

 

SECTION 3.           Stock Ledgers .  The stock ledgers of the Corporation, containing the names and addresses of the Stockholders and the number of shares held by them respectively, shall be kept at the principal offices of the Corporation or, if the Corporation employs a Transfer Agent, at the offices of the Transfer Agent of the Corporation.

 

SECTION 4.           Transfer Agents and Registrars .  The Board of Directors may from time to time appoint or remove transfer agents and/or registrars of transfers of shares of stock of the

 

16



 

Corporation, and it may appoint the same person as both transfer agent and registrar.  Upon any such appointment being made all certificates representing shares of capital stock thereafter issued shall be countersigned by one of such transfer agents or by one of such registrars of transfers (if any), or by both if such transfer agents or registrars are not the same person, and shall not be valid unless the certificates are so countersigned.  If the same person shall be both transfer agent and registrar, only on countersignature by such person shall be required.

 

SECTION 5.           Lost, Stolen or Destroyed Certificates .  The Board of Directors or the Executive Committee may determine the conditions upon which a new certificate of stock of the Corporation or any class may be issued in place of a certificate which is alleged to have been lost, stolen or destroyed; and may, in its discretion, require the owner of such certificate or such owner’s legal representative to give bond, with sufficient surety, to the Corporation and each Transfer Agent, if any, to indemnify it and each such Transfer Agent against any and all loss or claims which may arise by reason of the issue of a new certificate in the place of the one so lost, stolen or destroyed.

 

SECTION 6.           Discount from Net Asset Value .  If, for a fiscal quarter during or after the fifth year following the first effective date of the Corporation’s Registration Statement on Form N-2, the average discount from net asset value at which shares of the Corporation’s Common Stock have traded is in the determination of the Board of Directors, substantial, the Board of Directors of the Corporation will consider, at its next regularly scheduled quarterly meeting, taking actions designed to eliminate the discount, including periodic repurchases of shares or amendments to the Corporation’s Articles of Incorporation to convert the Corporation to an open-end investment company.

 

ARTICLE V

Corporate Seal

 

The Board of Directors may provide for a suitable corporate seal, in such form and bearing such inscriptions as it may determine.

 

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ARTICLE VI

Fiscal Year and Accountant

 

SECTION 1.           Fiscal Year .  The fiscal year of the Corporation, unless otherwise ordered by the Board of Directors, shall begin on the first day of January and shall end on the last day of December in each year.

 

SECTION 2.           Accountant .  The Corporation shall employ an independent public accountant or a firm of independent public accountants as its Accountants to examine the accounts of the Corporation and to sign and certify financial statements filed by the Corporation.  The employment of the Accountant shall be conditioned upon the right of the Corporation to terminate the employment forthwith without any penalty by vote of a majority of the outstanding voting securities at any Stockholders’ meeting called for that purpose.

 

ARTICLE VII

Indemnification

 

The Corporation shall indemnify its Directors and officers against judgments, fines, settlements and expenses to the fullest extent authorized and in the manner permitted, by applicable federal and state law and the Articles of Incorporation of the Corporation.

 

ARTICLE VIII

Custodian

 

SECTION 1.           Designation of Custodian, Subcustodians .  The Corporation shall have as custodian or custodians one or more trust companies or banks of good standing, each having a capital, surplus and undivided profits aggregating not less than fifty million dollars ($50,000,000), and, to the extent required by the Investment Company Act of 1940, as amended, the funds and securities held by the Corporation shall be kept in the custody of one or more such custodians, provided such custodian or custodians can be found ready and willing to act, and further provided that the Corporation may use as subcustodians, for the purpose of holding any foreign

 

18



 

securities and related funds of the Corporation, such foreign banks as the Board of Directors may approve and as shall be permitted by law.

 

SECTION 2.           Termination of Custodian .  The Corporation shall upon the resignation or inability to serve of its custodian or upon change of the custodian:

 

a)     in case of such resignation or inability to serve, use its best efforts to obtain a successor custodian;

 

b)    require that the cash and securities owned by the Corporation be delivered directly to the successor custodian; and

 

c)     in the event that no successor custodian can be found, submit to the Stockholders before permitting delivery of the cash and securities owned by the Corporation otherwise than to a successor custodian, the question whether or not this Corporation shall be liquidated or shall function without a custodian.

 

ARTICLE IX

Amendment of By-Laws

 

The Board of Directors, by affirmative vote of a majority thereof, shall have the exclusive right to make, amend, alter and repeal the By-laws of the Corporation, at any regular or special meeting, the notice or waiver of notice of which shall have specified or summarized the proposed amendment, alteration, repeal or new By-law, except as otherwise required by the Investment Company Act of 1940, as amended.

 

As of July 27, 2001

 

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Exhibit 99.(b)(2)

 

Amendment to the By-Laws
of
Credit Suisse Asset Management Income Fund, Inc.

 

Pursuant to Article IX of the Amended By-Laws (the “By-Laws”) of Credit Suisse Asset Management Income Fund, Inc. (the “Fund”), Article II, Section 5 of the By-Laws is hereby amended and restated in its entirety as follows:

 

Resignation .  A Director may resign at any time by giving written notice of his resignation to the Board of Directors or the Chairman of the Board or the Secretary of the Company.  Any resignation shall take effect at the time specified in it or, should the time when it is to become effective not be specified in it, immediately upon its receipt.  Acceptance of a resignation shall not be necessary to make it effective unless the resignation states otherwise.  No director candidate shall be presented to shareholders of the Fund for election at any meeting that is scheduled to occur after a Director has reached the age of 74 and each Director shall automatically be deemed to retire from the Board at the next annual meeting following the date a Director reaches the age of 75 years, even if his or her term of office has not expired.

 


Exhibit 99.(b)(3)

 

AMENDMENT TO THE AMENDED AND RESTATED BY-LAWS
OF
CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

Pursuant to a resolution duly adopted by the Board of Directors of Credit Suisse Asset Management Income Fund, Inc. (the “Corporation”), effective on May 17, 2007, Article IV, Section 1 and Article IV, Section 5, respectively, of the Corporation’s By-Laws, were amended and restated in their entirety as set forth below.

 

Amendment to Article IV, Section 1.

 

SECTION 1.  Issuance of Stock .  Stockholders of the Corporation are not entitled to certificates representing the shares of stock held by them.  Shares shall be issued and stock ownership records shall be maintained in book-entry form.  Whenever stock certificates are surrendered to the Corporation, for transfer, exchange or otherwise, the shares of stock issuable or outstanding upon such surrender shall be represented by book-entry without certificates.  When the Corporation issues or transfers shares of stock without certificates, the Corporation shall provide to record holders of such shares a written statement of the information required by the Maryland General Corporation Law.  Such information may include the name of the Corporation, the name of the Stockholder, the number and class of the shares, any restrictions on transferability, and any other information deemed necessary or appropriate by the Corporation.  The provisions of this Section 1 and of Section 5 of this Article of these By-Laws authorizing issuance of shares by book-entry without certificates shall apply to all issuances of stock of the Corporation, except to the extent that the use of certificates may be continued as determined by the Board of Directors.

 

Amendment to Article IV, Section 5.

 

SECTION 5.  Lost, Stolen or Destroyed Certificates .  The Board of Directors or the Executive Committee may determine the conditions upon which the Corporation shall recognize, by book-entry, the ownership of shares of stock represented by a stock certificate which is alleged to have been lost, stolen or destroyed; and may, in its discretion, require the owner of such certificate or such owner’s legal representative to give bond, with sufficient surety, to the Corporation and each Transfer Agent, if any, to indemnity it and each such Transfer Agent against any and all loss or claims which may arise with respect to the certificate alleged to have been lost, stolen or destroyed, and any and all loss or claims with respect to the Corporation’s book-entry recognition of ownership of the underlying shares.”

 


Exhibit 99.(b)(4)

 

AMENDMENT TO THE AMENDED AND RESTATED BYLAWS
OF
CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

Pursuant to a resolution duly adopted by the directors of Credit Suisse Asset Management Income Fund, Inc. (the “Fund”) at a meeting of the Board of Directors of the Fund duly held on February 12, 2003, Article I, Section 2 of the Fund’s Amended and Restated Bylaws was amended by adding the following sentence at the end thereof.

 

“Notwithstanding the foregoing, the 2003 annual meeting of the Stockholders of the Company shall be held at such place as the Board of Directors shall select on such date as the Board of Directors may fix by resolution, provided that the meeting shall be held no later than the 30 th  of September 2003.”

 

 

Dated:  February 12, 2003

 


Exhibit 99.(e)

 

FEE AND SERVICE SCHEDULE FOR STOCK TRANSFER SERVICES

 

between

 

EACH OF THE CREDIT SUISSE ASSET MANAGEMENT CLOSED END INVESTMENT COMPANIES

 

and

 

COMPUTERSHARE INC.

 

and

 

COMPUTERSHARE TRUST COMPANY, N.A.

 

This Fee and Service Schedule (“Schedule”) is by and between, (“the Fund”) and Computershare Inc. (“Computershare”) (formerly known as EquiServe, Inc.) and Computershare Trust Company, N.A. (the “Trust Company”), (formerly known as EquiServe Trust Company, N.A.) (collectively, “Transfer Agent”) and Each of the Credit Suisse Asset Management Closed End Investment Companies, listed on Exhibit B (the “Company”), whereby the Transfer Agent will perform the following services for the Company.  This Fee and Service Schedule is an attachment to the Agreement.  Terms used, but not otherwise defined in this Schedule, shall have the same meaning as those terms in the Agreement.

 

TERM

 

The fees set forth in this Schedule shall be effective for a period of three (3) years , commencing from the effective date of January 1, 2011 (the “Initial Term”).  Sixty (60) days before the expiration of the Initial Term or a Renewal Term, whichever is applicable, the parties to this Agreement will agree upon a Fee Schedule for the upcoming Renewal Term.  If no new fee schedule is agreed upon, provided that service mix and volumes remain constant, the fees listed in the Schedule shall be increased (a) by the accumulated change in the National Employment Cost Index for Service Producing Industries (Finance, Insurance, Real Estate) for the preceding years of the contract, as published by the Bureau of Labor Statistics of the United States Department of Labor; or (b) to the Transfer Agent’s minimum fees then in effect, whichever is greater.  Fees will be increased on this basis for each successive Renewal Term.

 

FEES

 

Ongoing Account Management*

 

This fee covers all administration of the services listed in the services section except as noted below.  Out of pocket costs associated with providing these services will be charged separately.

 

$35,000.00* Annual Stock Transfer/Registrar Fee for - Credit Suisse Asset Management Income Fund Inc.

 

$19,000.00* Annual Stock Transfer/Registrar Fee for - Credit Suisse High Yield Bond Fund

 

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* If the average volume of transactions, inquiries, or telephone calls significantly increases during the term of this Agreement as a result of outside factors or unforeseen circumstances for which the Transfer Agent is not the proximate cause, the Transfer Agent and the Company shall negotiate an additional fee.

 

Lost Owner/Shareholder Search Services

 

·                   SEC Electronic Database Search                                                       $2.00 per account searched

 

SERVICES

 

Administrative Services (per fund)

 

·                   Annual administrative services as Transfer Agent and Registrar for the common stock or shares of beneficial interest, as the case may be, of the Fund

 

·                   Assignment of relationship manager

 

Account Maintenance (per fund)

 

·                   Maintain registered Shareholder accounts to include the following services:

 

·                   Create new Shareholder accounts

 

·                   Post and acknowledge address changes

 

·                   Process other routine file maintenance adjustments

 

·                   Post all transactions, including debit and credit certificates, to the Shareholder file

 

·                   Respond to requests for audit confirmations

 

·                   Perform OFAC (Office of Foreign Asset Control) and Patriot Act reporting

 

·                   Obtain tax certifications

 

Share Issuance (per fund)

 

·                   Issue, cancel and register Shares

 

·                   Process all legal transfers as appropriate

 

·                   Combine certificates into larger and/or smaller denominations

 

·                   Replace lost, stolen or destroyed certificates in accordance with UCC guidelines and Transfer Agent policy (subject to Shareholder-paid fee and bond premium)

 

·                   Place, maintain and remove stop-transfer notations

 

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Shareholder Communications (per fund)

 

·                   Provide Company-specific Shareholder contact number

 

·                   Provide IVR 24/7 (subject to system maintenance)

 

·                   Respond to Shareholder inquiries (written, e-mail and web)

 

·                   Record all Shareholder calls

 

·                   Scan and image incoming correspondence from Shareholders

 

Direct Registration System (“DRS”) (per fund)

 

·                   Register, issue and transfer DRS book-entry Shares

 

·                   Issue DRS statements of holding

 

·                   Provide Shareholders with the ability to sell Shares through the IVR, telephone, mail or Internet, either via a batch order or a market order transaction in accordance with the terms and conditions, including applicable fees, of the DRS Sales Facility

 

·                   Process sales requests within the appropriate timeframe based on the type of service requested, in accordance with the terms of the DRS sales facility

 

·                   Coordinate the issuance, payment and reconcilement for any proceeds stemming from the use of the DRS sales facility, in accordance with the terms and conditions of the facility

 

·                   Coordinate the mailing of advices to Shareholders

 

·                   Accept and deposit certificated Shares into a DRS position

 

Online Access (per fund)

 

·                   Provide availability to “Issuer Online,” which provides access to Company and Shareholder information administered by Transfer Agent, which permits data management including accessing standard reports such as Top 10 - 200 Shareholder lists, submitting real-time inquiries such as an issued capital query, and reporting by holding range

 

·                   Provide availability to “Investor Centre,” which provides Shareholder account information, transaction capabilities, and downloadable forms and FAQs

 

·                   Provide On-Demand Reporting to allow Company to generate non-standard reports 24/7 at Transfer Agent’s standard fee for such reports

 

3



 

Dividend Services (per fund)

 

·                   Receive full funding one day prior to payable date by 11:00 a.m., Eastern Standard Time via Federal Funds Wire, ACH or Demand Deposit Account debit

 

·                   Coordinate the mailing of quarterly dividends with an additional enclosure with each dividend check

 

·                   Prepare and file Federal Information Returns (Form 1099) of dividends paid in a year

 

·                   Prepare and file State Information Returns of dividends paid in a year to Shareholders resident within such state

 

·                   Prepare and file annual withholding return (Form 1042) and payments to the government of income taxes withheld from Non-Resident Aliens

 

·                   Coordinate the mailing of Form 1099 to Shareholders

 

·                   Coordinate the email notification to Shareholders of the online availability of Form 1099

 

·                   Replace lost dividend checks

 

·                   Reconcile paid and outstanding checks

 

·                   Code “undeliverable” accounts to suppress mailing dividend checks to same

 

·                   Keep records of accumulated uncashed dividends

 

·                   Perform the following duties as required by the Interest and Dividend Tax Compliance Act of 1983:

 

·                   Withhold tax from Shareholder accounts not in compliance with the provisions of the Act

 

·                   Reconcile and report taxes withheld, including additional 1099 reporting requirements, to the Internal Revenue Service

 

·                   Mail to new accounts who have had taxes withheld, to inform them of procedures to be followed to curtail subsequent back-up withholding

 

·                   Perform Shareholder file adjustments to reflect certification of accounts

 

ACH Services (per fund)

 

·                   Review cards for accuracy and completeness and identifying cards with incomplete information

 

·                   Mail cure letter to Shareholders with incomplete cards

 

4



 

·                   Identify cards received after the cut-off date

 

·                   Code accounts for ACH and performing pre-note test

 

·                   Identify rejected ACH transmissions, mail dividend check and explanation letter to Shareholders with rejected transmissions

 

·                   Respond to Shareholder inquiries concerning the ACH Program

 

·                   Code cards received after cut-off date

 

·                   Calculate on a quarterly basis the Share breakdown for ACH vs. other dividend payments and notifying the Company of funding amount for ACH transmissions and other payable date funds

 

·                   Credit ACH designated bank accounts automatically on dividend payable date

 

·                   Maintenance of ACH participant file, including coding new ACH accounts

 

·                   Process termination requests

 

·                   Keep adequate records including retention of authorization cards

 

International Currency Exchange Services (per fund)

 

·                   Allow Shareholders to elect to receive sale proceeds and dividend payments in foreign currencies (subject to certain geographic restrictions) by check or by electronic funds transfer in accordance with Transfer Agent’s guidelines (fees paid by Shareholders)

 

Annual Meeting Services (per fund)

 

·                   Prepare a full Shareholder list as of the Annual Meeting Record Date

 

·                   Address proxy cards for all registered Shareholders

 

·                   Coordinate the mailing of the proxy card, proxy statement, return envelope and Annual Report to all registered Shareholders

 

·                   Receive, open and examine returned proxies

 

·                   Tabulate returned proxies

 

·                   Provide on-line access to proxy vote status

 

·                   Attend Annual Meeting as Inspector of Election (travel expenses billed as incurred)

 

·                   Prepare a final Annual Meeting list reflecting how each account has voted on each proposal

 

5



 

Additional Annual Meeting Services (SUBJECT TO ADDITIONAL FEES) (per fund)

 

·                   Electronic delivery of proxy material

 

·                   Accept and load other related proxy files, 401K, ESPP and other stock issues not on our recordkeeping system

 

·                   Match load related proxy files to registered Shareholder base to eliminate duplicate mailings

 

·                   Provide householding of materials to the same address

 

·                   Provide Internet and telephone voting

 

·                   Provide 5er/ices related to notice and access requirements including web hosting of materials, notice only mailings, and mixed mailings.

 

·                   Provide proxy solicitation services by Georgeson

 

·                   Broker search and beneficial or “street holder” distribution

 

·                   Provide financial printing of 10ks, proxy statements and other related documents

 

Direct Filing of Abandoned Property (per fund)

 

·                   Coordinate the mailing of due diligence notices to all qualifying Shareholder accounts as defined by the state filing matrix

 

·                   Process returned Due Diligence notices and remitting property to Shareholders prior to escheatment

 

·                   Prepare and file Preliminary and Final Abandoned Property Reports

 

·                   Prepare and file checks for each state covering unclaimed funds as per state requirements

 

·                   Issue and file stock certificate(s) registered to the applicable state(s) representing returned (RPO) certificates and underlying Share positions

 

·                   Retain, as required by law or otherwise, records of property escheated to the states and responding, after appropriate research, to Shareholder inquiries relating to same

 

Lost Owner/Shareholder Search Services (per fund)

 

·                   Perform electronic database searches in accordance with SEC requirements

 

·                   Update new addresses provided by search firm

 

·                   Send verification form to Shareholder to validate address

 

6



 

·                   Reissue abandoned property held to Shareholders upon receipt of signed verification form

 

Additional Services

 

Items not included in the fees and services set forth in this Schedule include, but are not limited to, services associated with the payment of a stock dividend, stock split, corporate reorganization, unvested stock program, DWAC services provided to broker dealers, audit services, services provided to a vendor of the Company, or any services associated with a special project, and are to be billed separately, on an appraisal basis.

 

Services required by legislation or regulatory fiat which become effective after the date of acceptance of this Schedule shall not be a part of the Standard Services and shall be billed by appraisal.  All additional services not specifically covered under this Schedule will be billed by appraisal, as applicable.

 

Billing Definition of Number of Accounts

 

For billing purposes, the number of accounts will be based on open accounts on file at the beginning of each billing period, plus any new accounts added during that period.  An open account shall mean the account of each Shareholder which account shall hold any full or fractional Shares of stock held by such Shareholder, outstanding funds, or reportable tax information,

 

Out-of-Pocket Expenses

 

In addition to the fees above, the Company agrees W reimburse the Transfer Agent for out-of-pocket expenses, including but not limited to postage, forms, telephone, taxes, records storage, exchange and broker fees, or advances incurred by the Transfer Agent for the items set out in Exhibit A attached hereto.  In addition, any other expenses incurred by the Transfer Agent at the request Or with the consent of the Company, will be reimbursed by the Company.

 

Bank Accounts

 

The Company acknowledges that the bank accounts maintained by Computershare in connection with the services hereunder will be in its name and that Computershare may receive investment earnings in connection with the investment at Computershare’s risk and for its benefit of funds held in those accounts from time to time.

 

7



 

ACCEPTANCE

 

In witness whereof, the parties hereto have caused this Fee and Service Schedule to be executed by their respective officers, hereunto duly agreed and authorized, as of the effective date of this Fee and Service Schedule.

 

Computershare Inc.

Computershare Trust Company, N. A.

 

Each of the Credit Suisse Asset Management Closed End Investment Companies Listed on Exhibit B

 

 

 

On Behalf of Both Entities:

 

 

 

 

 

By:

/s/ Dennis V. Moccia

 

By:

/s/ Michael A. Pignataro

 

 

 

 

 

Name:

Dennis V. Moccia

 

Name:

Michael A. Pignataro

 

 

 

 

 

Title:

Manager, Contract Administration

 

Title:

Chief Financial Officer 12/10/10

 

This Fee and Service Schedule shall serve as an attachment to the Transfer Agency and Service Agreement dated March I, 2003.

 

8



 

Exhibit A
Out of Pocket Expenses

 

Out of pocket expenses associated with, but not limited to, the following are not included in the fees quoted in this Fee end service Schedule and are billable as incurred.

 

·                   Postage (outgoing and business reply)

 

·                   Envelopes

 

·                   Forms and stationery

 

·                   Printing

 

·                   Enclosing (proxy cards, dividend checks, etc.)

 

·                   Fulfillment (transfer packages, new account packages, DRIP enrollment packages)

 

·                   Proxy proof set-up

 

·                   Record retention

 

·                   Insurance premiums (mailing certificates)

 

·                   Delivery and freight charges (including overnight delivery; Airborne Express, FedEx, etc.)

 

·                   Destruction of excess/obsolete material

 

·                   Telephone usage and line expenses

 

·                   Regulatory reports

 

·                   NCOA searches

 

Please Note:

 

Good funds to cover postage expenses in excess of $10,000 for Shareholder mailings must be received in full by 12:00 p.m. Eastern time on the scheduled mailing date.  Postage expenses less than $10,000 will be billed as incurred,

 

Overtime charges will be assessed in the event of a late delivery to the Transfer Agent of Company material for mailings to Shareholders, unless the mail date is rescheduled.  Such material includes, but is not limited to, proxy statements, quarterly and annual reports and news releases.

 

9



 

EXHIBIT B

 

Credit Suisse Asset Management Income Fund Inc.
Credit Suisse High Yield Bond Fund

 

10


Exhibit 99.(g)

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

RESTATED INVESTMENT ADVISORY AGREEMENT

 

AGREEMENT, made as of the 14th day of May, 2001 between Credit Suisse Asset Management Income Fund, Inc., a Maryland corporation (the “Fund”), and Credit Suisse Asset Management, LLC, a Delaware limited liability company (the “Adviser”).

 

W I T N E S S E T H

 

WHEREAS, the Fund is a diversified, closed-end investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”);

 

WHEREAS, the Adviser provides investment advisory services to the Fund pursuant to an Investment Advisory Agreement with the Fund dated as of June 13, 1995 (the “Investment Advisory Agreement”);

 

WHEREAS, following changes in the respective name of the Fund and of the Adviser, the parties executed an Addendum dated as of February 7, 2000 to amend the Investment Advisory Agreement to properly reflect the name of the Fund and the entity that is providing investment advisory services to the Fund;

 

WHEREAS, the Adviser and the Fund have recently moved to new offices at 466 Lexington Avenue, New York; and

 

WHEREAS, the parties now wish to restate the Investment Advisory Agreement for the sole purposes of incorporating the changes made by the Addendum and properly reflecting the business address of the Adviser and the Fund, revising the fee structure and making certain other ministerial changes.

 

NOW, THEREFORE, in consideration of the premises and mutual promises hereinafter set forth, the parties hereto agree as follows:

 

1.             The Fund hereby appoints the Adviser to act as investment adviser to the Fund.  The Adviser accepts such appointment and agrees to render the services herein set forth, for the compensation herein provided.

 

2.             Subject to the supervision of the Board of Directors of the Fund, the Adviser will manage the portfolio of securities and investments (including cash) belonging to the Fund including the purchase, retention and disposition thereof and the execution of agreements relating thereto, in accordance with the Fund’s investment objective, policies and restrictions as stated in the Prospectus (as defined in paragraph 4(f) of this Agreement) and subject to the following understandings:

 

(a)           The Adviser shall furnish a continuous investment program for the Fund and in so doing shall determine from time to time what investments or securities will be purchased, retained or sold by the Fund, and what portion of the assets will be invested or held uninvested as cash;

 



 

(b)           The Adviser shall use its best judgment in the performance of its duties under this Agreement;

 

(c)           The Adviser, in the performance of its duties and obligations under this Agreement, shall act in conformity with the Articles of Incorporation, the Bylaws and Prospectus of the Fund and with the instructions and directions of the Board of Directors of the Fund and will conform to and comply with the requirements of the 1940 Act and all other applicable federal and state laws and regulations;

 

(d)           The Adviser shall determine the securities to be purchased or sold by the Fund and as agent for the Fund will effect portfolio transactions pursuant to its determinations either directly with the issuer or with any broker and/or dealer in such securities; in placing orders with brokers and/or dealers the Adviser intends to seek the best available price and execution for purchases and sales; the Adviser shall also determine whether or not the Fund shall enter into repurchase or reverse repurchase agreements.  On occasions when the Adviser deems the purchase or sale of a security to be in the best interest of the Fund as well as other customers, the Adviser may, to the extent permitted by applicable laws and regulations, but shall not be obligated to, aggregate the securities to be sold or purchased in order to obtain the best execution and lower brokerage commissions, if any.  In such event, allocation of the securities so purchased or sold, as well as the expenses incurred in the transaction, will be made by the Adviser in the manner it considers to be the most equitable and consistent with its fiduciary obligations to the Fund and, if applicable, to such other customers;

 

(e)           The Adviser shall maintain books and records with respect to the securities transactions of the Fund and shall render to the Fund’s Board of Directors such periodic and special reports as the Board of Directors may reasonably request;

 

(f)            The Adviser shall provide the Fund’s Custodian as required with information relating to all transactions concerning the assets belonging to the Fund, except purchases of and any sales of the Fund’s Common Stock (“Fund Shares”); and

 

(g)           The investment management services of the Adviser to the Fund under this Agreement are not to be deemed exclusive, and the Adviser shall be free to render similar services to others.

 

3.             The Adviser is authorized to select the brokers and dealers that will execute the purchases and sales of portfolio securities for the Fund and is directed to use its best efforts to obtain the best available price and execution, except as prescribed herein.  Unless and until otherwise directed by the Board of Directors of the Fund, the Adviser may also effect individual securities transactions at commission rates in excess of the minimum commission rates available, if the Adviser determines in good faith that such amount of commission is reasonable in relation to the value of the brokerage or research services provided by such broker or dealer, viewed in terms of either that particular transaction or the Adviser’s overall responsibilities with respect to the Fund.  The execution of such transactions shall not be deemed to represent an unlawful act or breach of any duty created by this Agreement or otherwise.

 

2



 

4.             The Fund has delivered copies of each of the following documents to the Adviser and will promptly notify and deliver to it all future amendments and supplements, if any:

 

(a)           Articles of Incorporation of the Fund, filed with the Department of Assessments and Taxation of the State of Maryland on February 11, 1987 (such Articles of Incorporation, as presently in effect and as amended from time to time, being herein called the “Articles of Incorporation”);

 

(b)           Bylaws of the Fund (such Bylaws, as presently in effect and as amended from time to time, being herein called the “Bylaws”);

 

(c)           Certified resolutions of the Board of Directors of the Fund authorizing the appointment of the Adviser and approving the form of this Agreement;

 

(d)           Registration Statement under the Securities Act of 1933, as amended, on Form N-14 (No.  333-56526) (the “Registration Statement”) as filed with the Securities and Exchange Commission (the “Commission”) on March 2, 2001 relating to the Fund and the Fund Shares, and all amendments thereto;

 

(e)           Notification of Registration of the Fund under the 1940 Act on Form N-8A as filed with the Commission on February 13, 1987 and all amendments thereto; and

 

(f)            Prospectus of the Fund dated March 30, 2001 (such prospectus being herein called the “Prospectus”).

 

5.             The Adviser shall authorize and permit any of its partners, agents and employees who may be elected as directors or officers of the Fund to serve in the capacities in which they are elected.  Services to be furnished by the Adviser under this Agreement may be furnished through the medium of any of such partners, agents or employees of the Adviser.

 

6.             The Adviser shall keep the Fund’s books and records required to be maintained by it pursuant to paragraph 2(e) of this Agreement.  The Adviser agrees that all records which it maintains for the Fund are the property of the Fund and it will promptly surrender any of such records to the Fund upon the Fund’s request.  The Adviser further agrees to preserve for the periods prescribed by Rule 31 a-2 of the Commission under the 1940 Act any such records as are required to be maintained by the Adviser with respect to the Fund by Rule 31a-1 of the Commission under the 1940 Act.

 

7.             During the term of this Agreement the Adviser will pay all expenses (including without limitation the compensation of all its partners, agents and employees serving as directors or officers of the Fund pursuant to paragraph 5 of this Agreement) incurred by it in connection with its activities under this Agreement other than the cost of securities and investments purchased for the Fund (including taxes and brokerage commissions, if any).

 

8.             For the services provided and the expenses borne pursuant to this Agreement, the Fund will pay to the Adviser as full compensation therefor a fee, computed weekly and payable quarterly, at an annual rate equal to 0.50% per annum of the Average Weekly Base Amount (as defined below).  This fee for each quarter will be paid to the Adviser

 

3



 

during the month succeeding such quarter.  For purposes of this Agreement, “Average Weekly Base Amount” shall mean for any quarter, the average of the lesser of (A) “Market Value” of the Fund’s outstanding shares and (B) the Fund’s net assets, in each case determined as of the last trading day for each week during that quarter.  ‘Market Value” of the Fund’s outstanding shares will be determined as follows:

 

(a)           if the Fund’s shares are listed or traded on any national securities exchange or on the Nasdaq National Market, the shares shall be valued at the last sale price on the exchange or market on which they are principally traded, on the valuation date; if there is no sale on the valuation date, the shares shall be valued at the mean between the closing bid and asked price;

 

(b)           if the Fund’s shares are traded over-the-counter but are not listed or traded on any national securities exchange or on the Nasdaq National Market, the shares shall be valued at the last sale price on the valuation date or, if no sale occurs on that date, at the last bid price; or

 

(c)           if the Fund’s shares are not listed or traded on any recognized securities market or over-the-counter, the shares shall be deemed to have the same value as the underlying net assets of the Fund as of the valuation date.

 

Upon any termination of this Agreement before the end of a quarter, the fee for such part of that quarter shall be prorated according to the proportion that such period bears to the full quarterly period and shall be payable upon the date of termination of this Agreement.  For the purpose of determining fees payable to the Adviser, the value of the Fund’s net assets shall be computed at the times and in the manner specified in the Fund’s Registration Statement as from time to time in effect.

 

9.             The Adviser shall not be liable for any error of judgment or mistake of law or for any loss suffered by the Fund in connection with the matters to which this Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard by it of its obligations and duties under this Agreement.

 

10.           This Agreement shall become effective on the date hereof.  Upon becoming effective, this Agreement shall remain in effect for an initial two-year term and shall continue in effect from year to year thereafter if such continuance is approved at least annually by (a) a majority of the outstanding voting securities (as defined in the 1940 Act) or by vote of the Fund’s Board of Directors, cast in person at a meeting called for the purpose of voting on such approval, and (b) vote of a majority of the Directors of the Fund who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of any party to this Agreement, cast in person at a meeting called for the purpose of voting on such approval.  This Agreement may be terminated by the Fund at any time, without the payment of any penalty, by the Board of Directors of the Fund or by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund on 60 days’ written notice to the Adviser, or by the Adviser at any

 

4



 

time, without the payment of any penalty, on 90 days’ written notice to the Fund.  This Agreement will automatically and immediately terminate in the event of its assignment (as defined in the 1940 Act).

 

11.           The Adviser shall for all purposes herein be deemed to be an independent contractor and shall, unless otherwise expressly provided herein or authorized by the Board of Directors of the Fund from time to time, have no authority to act for or represent the Fund in any way or otherwise be deemed an agent of the Fund.

 

12.           This Agreement may be amended by mutual consent, but the consent of the Fund must be approved (a) by vote of a majority of those Directors of the Fund who are not parties to this Agreement or “interested persons” (as defined in the 1940 Act) of any such party, cast in person at a meeting called for the purpose of voting on such amendment, and (b) by vote of a majority of the outstanding voting securities (as defined in the 1940 Act) of the Fund.

 

13.           Notices of any kind to be given to the Adviser by the Fund shall be in writing and shall be duly given if mailed or delivered to the Adviser at 466 Lexington Avenue, 16th Floor, New York, New York 10017, Attention: Chief Executive Officer, with a copy to: General Counsel or at such other address or to such other individual as shall be specified by the Adviser to the Fund in accordance with this paragraph 13.  Notices of any kind to be given to the Fund by the Adviser shall be in writing and shall be duly given if mailed or delivered to the Fund at Credit Suisse Asset Management Income Fund, Inc., 466 Lexington Avenue, 16th Floor, New York, New York 10017, Attention: Chairman, with a copy to: Senior Vice President or at such other address or to such other individual as shall be specified by the Fund to the Adviser in accordance with this paragraph 13.  The Adviser agrees to notify the Fund of any change in its membership within a reasonable time of such change.

 

14.           The Fund agrees that if this Agreement is terminated and the Adviser shall no longer be the adviser to the Fund, the Fund will, within a reasonable period of time, change its name to delete reference to “Credit Suisse Asset Management”.

 

15.           This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

 

16.           This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original.

 

5



 

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be executed by their officers designated below as of the day and year first above written.

 

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

 

 

 

 

By:

/s/ Michael A. Pignataro

 

 

Name:

Michael A. Pignataro

 

 

Title:

Secretary

 

 

 

 

 

CREDIT SUISSE ASSET MANAGEMENT, LLC

 

 

 

 

 

By:

/s/ Hal Liebes

 

 

Name:

Hal Liebes

 

 

Title:

Managing Director

 

6


Exhibit 99.(j)(2)

 

AMENDMENT TO CUSTODIAN AGREEMENT

 

This Amendment to Custodian Agreement is made as of April 26, 2001 by and among each investment company party to that certain Custodian Agreement with State Street Bank and Trust Company dated as of October 20, 2000 (as amended, modified or supplemented and in effect from time to time, the “Contract”) and State Street Bank and Trust Company.

 

WHEREAS, capitalized terms used in this Amendment without definition shall have the respective meanings given to such terms in the Contract;

 

WHEREAS, the Fund and the Custodian desire to amend certain provisions of the Contract to reflect revisions to Rule 17f-5 (“Rule 17f-5”) and the adoption of Rule 17f-7 (“Rule 17f-7”) promulgated under the Investment Company Act of 1940, as amended (the “1940 Act”); and

 

WHEREAS, the Fund and the Custodian desire to amend and restate certain other provisions of the Contract relating to the custody of assets of each of the Portfolios held outside of the United States.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter contained, the parties hereby agree to amend the Contract, pursuant to the terms thereof, as follows:

 

I.                                          The last sentence of the second paragraph of Article 1 shall be deleted and replaced in its entirety with the following language, “The Custodian may employ as sub-custodian for the Fund’s foreign securities on behalf of the applicable Portfolio(s) the foreign banking institutions and foreign securities depositories designated in Schedules A and B hereto, but only in accordance with the applicable provisions of Articles 3 and 4 hereof.”

 

II.                                      Article 3 of the Contract is hereby deleted, and Articles 4 through 25 of the Contract are hereby renumbered, as of the effective date of this Amendment, as Articles 5 through 26, respectively (except that Article 5A shall become Article 6A).

 

III                                     New Articles 3 and 4 of the Contract are hereby added, as of the effective date of this Amendment, as set forth below.

 

ARTICLE 3.                              Provisions Relating to Rules 17f-5 and 17f-7

 

3.1.                             Definitions .  Capitalized terms in this Agreement shall have the following meanings:

 

“Country Risk” means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country including, but not limited to, such country’s political environment, economic and financial infrastructure (including any Eligible Securities Depository operating in the country), prevailing or developing custody and settlement practices, and laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country.

 

“Eligible Foreign Custodian” has the meaning set forth in section (a)(1) of Rule 17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as defined in Rule 17f-5), a bank holding company meeting the requirements of an Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate action of the U.S. Securities and Exchange Commission (the “SEC”)), or a foreign branch of a Bank (as defined in Section 2(a)(5) of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of the 1940 Act; the term does not include any Eligible Securities Depository.

 



 

“Eligible Securities Depository” has the meaning set forth in section (b)(1) of Rule 17f-7.

 

“Foreign Assets” means any of the Portfolios’ investments (including foreign currencies) for which the primary market is outside the United States and such cash and cash equivalents as are reasonably necessary to effect the Portfolios’ transactions in such investments.

 

“Foreign Custody Manager” has the meaning set forth in section (a)(3) of Rule 17f-5.

 

3.2.                             The Custodian as Foreign Custody Manager .

 

3.2.1.                   Delegation to the Custodian as Foreign Custody Manager .   The Fund, by resolution adopted by its Board, hereby delegates to the Custodian, subject to Section (b) of Rule 17f-5, the responsibilities set forth in this Section 3.2 with respect to Foreign Assets of the Portfolios held outside the United States, and the Custodian hereby accepts such delegation as Foreign Custody Manager with respect to the Portfolios.

 

3.2.2.                   Countries Covered .   The Foreign Custody Manager shall be responsible for performing the delegated responsibilities defined below only with respect to the countries and custody arrangements for each such country listed on Schedule A to this Contract, which list of countries may be amended from time to time by the Fund with the agreement of the Foreign Custody Manager. The Foreign Custody Manager shall list on Schedule A the Eligible Foreign Custodians selected by the Foreign Custody Manager to maintain the assets of the Portfolios, which list of Eligible Foreign Custodians may be amended from time to time in the sole discretion of the Foreign Custody Manager. The Foreign Custody Manager will provide amended versions of Schedule A in accordance with Section 3.2.5 hereof.

 

Upon the receipt by the Foreign Custody Manager of Proper Instructions to open an account or to place or maintain Foreign Assets in a country listed on Schedule A, and the fulfillment by the Fund, on behalf of the Portfolios, of the applicable account opening requirements for such country, the Foreign Custody Manager shall be deemed to have been delegated by the Board on behalf of the Portfolios responsibility as Foreign Custody Manager with respect to that country and to have accepted such delegation. Execution of this Amendment by the Fund shall be deemed to be a Proper Instruction to open an account, or to place or maintain Foreign Assets, in each country listed on Schedule A in which the Custodian has previously placed or currently maintains Foreign Assets pursuant to the terms of the Contract. Following the receipt of Proper Instructions directing the Foreign Custody Manager to close the account of a Portfolio with the Eligible Foreign Custodian selected by the Foreign Custody Manager in a designated country, the delegation by the Board on behalf of the Portfolios to the Custodian as Foreign Custody Manager for that country shall be deemed to have been withdrawn and the Custodian shall immediately cease to be the Foreign Custody Manager of the Portfolios with respect to that country.

 

The Foreign Custody Manager may withdraw its acceptance of delegated responsibilities with respect to a designated country upon written notice to the Fund. Forty-five days (or such longer period to which the parties agree in writing) after receipt of any such notice by the Fund, the Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Fund with respect to the country as to which the Custodian’s acceptance of delegation is withdrawn.

 

3.2.3.                   Scope of Delegated Responsibilities :

 

(a)                                   Selection of Eligible Foreign Custodians .  Subject to the provisions of this Section 3.2, the Foreign Custody Manager may place and maintain the Foreign Assets in the care of the Eligible Foreign Custodian selected by the Foreign Custody Manager in each country listed on Schedule A, as amended from

 

2



 

time to time. In performing its delegated responsibilities as Foreign Custody Manager to place or maintain Foreign Assets with an Eligible Foreign Custodian, the Foreign Custody Manager shall determine that the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Foreign Assets will be held by that Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(1).

 

(b)                                   Contracts With Eligible Foreign Custodians.   The Foreign Custody Manager shall determine that the contract governing the foreign custody arrangements with each Eligible Foreign Custodian selected by the Foreign Custody Manager will satisfy the requirements of Rule 17f-5(c)(2).

 

(c)                                   Monitoring .   In each case in which the Foreign Custody Manager maintains Foreign Assets with an Eligible Foreign Custodian selected by the Foreign Custody Manager, the Foreign Custody Manager shall establish a system to monitor (i) the appropriateness of maintaining the Foreign Assets with such Eligible Foreign Custodian and (ii) performance of the contract governing the custody arrangements established by the Foreign Custody Manager with the Eligible Foreign Custodian. In the event the Foreign Custody Manager determines that the custody arrangements with an Eligible Foreign Custodian it has selected are no longer appropriate, the Foreign Custody Manager shall notify the Board (or the Fund’s duly-authorized investment adviser) in accordance with Section 3.2.5 hereunder and, to the extent that the Foreign Custody Manager has not issued a notice of withdrawal as Foreign Custody Manager for the particular country (pursuant to Section 3.2.2 above); the Foreign Custody Manager has not received a Proper Instruction to close the account (pursuant to Section 3.2.2 above); and no other notice regarding termination of delegation has been issued (pursuant to Section 3.2.8 below), the Foreign Custody Manager shall suggest (in a non-binding manner) an alternative Eligible Foreign Custodian, if such is available.

 

3.2.4.                   Guidelines for the Exercise of Delegated Authority .   For purposes of this Section 3.2, the Board shall be deemed to have considered and determined to accept such Country Risk as is incurred by placing and maintaining the Foreign Assets in each country for which the Custodian is serving as Foreign Custody Manager of the Portfolios.

 

3.2.5.                   Reporting Requirements.  The Foreign Custody Manager shall report the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the placement of such Foreign Assets with another Eligible Foreign Custodian by providing to the Board an amended Schedule A at the end of the calendar quarter in which an amendment to such Schedule has occurred. The Foreign Custody Manager shall make written reports notifying the Board of any other material change in the foreign custody arrangements of the Portfolios described in this Section 3.2 after the occurrence of the material change, as required by section (b)(2) of Rule 17f-5.

 

3.2.6.                   Standard of Care as Foreign Custody Manager of a Portfolio .   In performing the responsibilities delegated to it, the Foreign Custody Manager agrees to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of assets of management investment companies registered under the 1940 Act would exercise.

 

3.2.7.                   Representations with Respect to Rule 17f-5 . The Foreign Custody Manager represents to the Fund that it is a U.S. Bank as defined in section (a)(7) of Rule 17f-5. The Fund represents to the Custodian that the Board has determined that it is reasonable for the Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Contract to the Custodian as the Foreign Custody Manager of the Portfolios.

 

3



 

3.2.8.                   Effective Date and Termination of the Custodian as Foreign Custody Manager .  The Board’s delegation to the Custodian as Foreign Custody Manager of the Portfolios shall be effective as of the date hereof and shall remain in effect until terminated at any time, without penalty, by written notice from the terminating party to the non-terminating party. Termination will become effective forty-five (45) days after receipt by the non-terminating party of such notice. The provisions of Section 3.2.2 hereof shall govern the delegation to and termination of the Custodian as Foreign Custody Manager of the Portfolios with respect to designated countries.

 

3.3.                             Eligible Securities Depositories .

 

3.3.1.                   Analysis and Monitoring .   To assist the Fund in its determination of whether a custody arrangement provides reasonable safeguards against the custody risks associated with maintaining assets with an Eligible Securities Depository, the Custodian shall (a) provide the Fund (or its duly-authorized investment manager or investment adviser) with an analysis of the custody risks associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule B hereto in accordance with section (a)(1)(i)(A) of Rule 17f-7, and (b) monitor such risks on a continuing basis, and promptly notify the Fund (or its duly-authorized investment manager or investment adviser) of any material change in such risks, in accordance with section (a)(1)(i)(B) of Rule 17f-7.

 

3.3.2.                   Standard of Care .   The Custodian agrees to exercise reasonable care, prudence and diligence in performing the duties set forth in Section 3.3.1.

 

ARTICLE 4.                              Duties of the Custodian with Respect to Property of the Portfolios Held Outside the United States.

 

4.1.                             Definitions .   Capitalized terms in this Article 4 shall have the following meanings:

 

“Foreign Securities System” means an Eligible Securities Depository listed on Schedule B hereto.

 

“Foreign Sub-Custodian” means a foreign banking institution serving as an Eligible Foreign Custodian.

 

4.2.                             Holding Securities .  The Custodian shall identify on its books as belonging to the Portfolios the foreign securities held by each Foreign Sub-Custodian or Foreign Securities System. The Custodian may hold foreign securities for all of its customers, including the Portfolios, with any Foreign Sub-Custodian in an account that is identified as belonging to the Custodian for the benefit of its customers, provided however, that (i) the records of the Custodian with respect to foreign securities of the Portfolios which are maintained in such account shall identify those securities as belonging to the Portfolios and (ii), to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities so held by the Foreign Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian or of other customers of such Foreign Sub-Custodian.

 

4.3.                             Foreign Securities Systems .   Foreign securities shall be maintained in a Foreign Securities System in a designated country through arrangements implemented by the Custodian or a Foreign Sub-Custodian, as applicable, in such country.

 

4.4.                             Transactions in Foreign Custody Account .

 

4.4.1.                   Delivery of Foreign Assets .  The Custodian or a Foreign Sub-Custodian shall release and deliver foreign securities of the Portfolios held by the Custodian or such Foreign Sub-Custodian, or in a Foreign

 

4



 

Securities System account, only upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, and only in the following cases:

 

(i)                                      upon the sale of such foreign securities for the Portfolio in accordance with commercially reasonable market practice in the country where such foreign securities are held or traded, including, without limitation: (A) delivery against expectation of receiving later payment; or (B) in the case of a sale effected through a Foreign Securities System, in accordance with the rules governing the operation of the Foreign Securities System;

 

(ii)                                   in connection with any repurchase agreement related to foreign securities;

 

(iii)                                to the depository agent in connection with tender or other similar offers for foreign securities of the Portfolios;

 

(iv)                               to the issuer thereof or its agent when such foreign securities are called, redeemed, retired or otherwise become payable;

 

(v)                                  to the issuer thereof, or its agent, for transfer into the name of the Custodian (or the name of the respective Foreign Sub-Custodian or of any nominee of the Custodian or such Foreign Sub-Custodian) or for exchange for a different number of bonds, certificates or other evidence representing the same aggregate face amount or number of units;

 

(vi)                               to brokers, clearing banks or other clearing agents for examination or trade execution in accordance with market custom; provided that in any such case the Foreign Sub-Custodian shall have no responsibility or liability for any loss arising from the delivery of such securities prior to receiving payment for such securities except as may arise from the Foreign Sub-Custodian’s own negligence or willful misconduct;

 

(vii)                          for exchange or conversion pursuant to any plan of merger, consolidation, recapitalization, reorganization or readjustment of the securities of the issuer of such securities, or pursuant to provisions for conversion contained in such securities, or pursuant to any deposit agreement;

 

(viii)                         in the case of warrants, rights or similar foreign securities, the surrender thereof in the exercise of such warrants, rights or similar securities or the surrender of interim receipts or temporary securities for definitive securities;

 

(ix)                                 for delivery as security in connection with any borrowing by the Portfolios requiring a pledge of assets by the Portfolios;

 

(i)                                      in connection with trading in options and futures contracts, including delivery as original margin and variation margin;

 

(x)                                    in connection with the lending of foreign securities; and

 

(xi)                                 for any other purpose, but only upon receipt of Proper Instructions specifying the foreign securities to be delivered and naming the person or persons to whom delivery of such securities shall be made.

 

(xii)                              for any other purpose, but only upon receipt of Proper Instructions specifying the foreign securities to be delivered and naming the person or persons to whom delivery of such securities shall be made.

 

4.4.2.                   Payment of Portfolio Monies .  Upon receipt of Proper Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall pay out, or direct the respective

 

5



 

Foreign Sub-Custodian or the respective Foreign Securities System to pay out, monies of a Portfolio in the following cases only:

 

(i)                                      upon the purchase of foreign securities for the Portfolio, unless otherwise directed by Proper Instructions, by (A) delivering money to the seller thereof or to a dealer therefor (or an agent for such seller or dealer) against delivery of such securities, unless prevailing market conditions (as described in Section 4.4.3 below) provide for delivering monies to the seller thereof or to a dealer thereof (or an agent for such seller or dealer) against expectation of receiving later delivery of such foreign securities; or (B) in the case of a purchase effected through a Foreign Securities System, in accordance with the rules governing the operation of such Foreign Securities System;

 

(ii)                                   in connection with the conversion, exchange or surrender of foreign securities of the Portfolio;

 

(iii)                              for the payment of any expense or liability of the Portfolio, including but not limited to the following payments: interest, taxes, investment advisory fees, transfer agency fees, fees under this Contract, legal fees, accounting fees, and other operating expenses;

 

(iv)                               for the purchase or sale of foreign exchange or foreign exchange contracts for the Portfolio, including transactions executed with or through the Custodian or its Foreign Sub-Custodians;

 

(v)                                  in connection with trading in options and futures contracts, including delivery as original margin and variation margin;

 

(ii)                                   for payment of part or all of the dividends received in respect of securities sold short;

 

(vi)                               in connection with the borrowing or lending of foreign securities; and

 

(vii)                            for any other purpose, but only upon receipt of Proper Instructions specifying the amount of such payment and naming the person or persons to whom such payment is to be made.

 

4.4.3.                   Market Conditions .   Notwithstanding any provision of this Contract to the contrary, settlement and payment for Foreign Assets received for the account of the Portfolios and delivery of Foreign Assets maintained for the account of the Portfolios may be effected in accordance with the customary established securities trading or processing practices and procedures generally acceptable to Institutional Investors in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for such Foreign Assets from such purchaser or dealer. For purposes of this Contract, the term “Institutional Investors” shall mean U.S. registered investment companies or major, U.S. based commercial banks, insurance companies, pension funds or substantially similar financial institutions which, as a part of their ordinary business operations, purchase or sell securities and make use of non-U.S. custodial services.

 

The Custodian shall provide to the Board the information with respect to custody and settlement practices in countries in which the Custodian employs a Foreign Sub-Custodian described on Schedule C hereto at the time or times set forth on such Schedule. The Custodian may revise Schedule C from time to time, provided that no such revision shall result in the Board being provided with substantively less information than had been previously provided hereunder.

 

6



 

4.5.                             Registration of Foreign Securities .  The foreign securities maintained in the custody of a Foreign Sub-Custodian (other than bearer securities) shall be registered in the name of the applicable Portfolio or in the name of the Custodian or in the name of any Foreign Sub-Custodian or in the name of any nominee of the foregoing, and the Fund on behalf of such Portfolio agrees to hold any such nominee harmless from any liability as a holder of record of such foreign securities. The Custodian or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of a Portfolio under the terms of this Contract unless the form of such securities and the manner in which they are delivered are in accordance with reasonable market practice in the particular jurisdiction and are generally acceptable to Institutional Investors.

 

4.6.                             Bank Accounts .  The Custodian shall identify on its books as belonging to the Fund cash (including cash denominated in foreign currencies) deposited with the Custodian. Where the Custodian is unable to maintain, or market practice does not facilitate the maintenance of, cash on the books of the Custodian, a bank account or bank accounts shall be opened and maintained outside the United States on behalf of a Portfolio with a Foreign Sub-Custodian. All accounts referred to in this Section shall be subject only to draft or order by the Custodian (or, if applicable, such Foreign Sub-Custodian) acting pursuant to the terms of this Contract to hold cash received by or from or for the account of the Portfolio. Cash maintained on the books of the Custodian (including its branches, subsidiaries and affiliates), regardless of currency denomination, is maintained in bank accounts established under, and subject to the laws of, The Commonwealth of Massachusetts.

 

4.7.                             Collection of Income .  The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which the Portfolios shall be entitled and shall credit such income, as collected, to the applicable Portfolio. In the event that extraordinary measures are required to collect such income, the Fund and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures.

 

4.8.                             Shareholder Rights .   With respect to the foreign securities held pursuant to this Article 4, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country where such securities are issued. The Fund acknowledges that local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of the Fund to exercise shareholder rights.

 

4.9.                             Communications Relating to Foreign Securities .   The Custodian shall transmit promptly to the Fund written information with respect to materials received by the Custodian via the Foreign Sub-Custodians from issuers of the foreign securities being held for the account of the Portfolios (including, without limitation, pendency of calls and maturities of foreign securities and expirations of rights in connection therewith). With respect to tender or exchange offers, the Custodian shall transmit promptly to the Fund written information with respect to materials so received by the Custodian from issuers of the foreign securities whose tender or exchange is sought or from the party (or its agents) making the tender or exchange offer. The Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with foreign securities or other property of the Portfolios at any time held by it unless (i) the Custodian or the respective Foreign Sub-Custodian is in actual possession of such foreign securities or property and (ii) the Custodian receives Proper Instructions with regard to the exercise of any such right or power, and both (i) and (ii) occur at least three business days prior to the date on which the Custodian is to take action to exercise such right or power.

 

7



 

4.10.                      Liability of Foreign Sub-Custodians .

 

Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian shall, to the extent possible, require the Foreign Sub-Custodian to exercise reasonable care in the performance of its duties, and to indemnify, and hold harmless, the Custodian from and against any loss, damage, cost, expense, liability or claim arising out of or in connection with the Foreign Sub-Custodian’s performance of such obligations. At the Fund’s election, the Portfolios shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against a Foreign Sub-Custodian as a consequence of any such loss, damage, cost, expense, liability or claim if and to the extent that the Portfolios have not been made whole for any such loss, damage, cost, expense, liability or claim.

 

4.11.                      Tax Law .

 

Except to the extent that imposition of such item arises from the Custodian’s failure to perform in accordance with this Section, the Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on the Fund, the Portfolios or the Custodian as custodian of the Portfolios by the tax law of the United States or of any state or political subdivision thereof. It shall be the responsibility of the Fund to notify the Custodian of the obligations imposed on the Fund with respect to the Portfolios or the Custodian as custodian of the Portfolios by the tax law of countries other than those mentioned in the above sentence, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting; any change in the organization, domicile or other relevant fact concerning tax treatment of the Fund; and if the Fund is or becomes the beneficiary of any special ruling or treatment not applicable to the general nationality and category of entity of which the Fund is a part under general laws and treaty provisions. The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist the Fund with respect to any claim for exemption or refund under the tax law of countries for which the Fund has provided such information. Such assistance of the Custodian shall include, when and as applicable, ascertaining the appropriate rate of tax withholding and providing such documents as may be required to enable the Fund to receive appropriate tax treatment under applicable tax laws and treaty provisions.

 

4.12.                      Liability of Custodian .

 

Except as may arise from the Custodian’s own negligence or willful misconduct or the negligence or willful misconduct of a Foreign Sub-Custodian, the Custodian shall be without liability to the Fund for any loss, liability, claim or expense resulting from or caused by anything which is part of Country Risk.

 

The Custodian shall be liable for the acts or omissions of a Foreign Sub-Custodian to the same extent as set forth with respect to sub-custodians generally in this Contract.

 

IV.                                  Subsection (iii) of the second sentence of newly renumbered Article 14 of the Contract and the word “, and” immediately preceeding said subsection (iii), are hereby deleted.

 

V.                                      The reference to “Schedule B” contained in the newly renumbered Section 7(1) of the Contract is hereby amended to instead refer to “Schedule F” and, in connection therewith, the first occurring original Schedule B to the Contract (entitled ‘Custody Fee Schedule’) is hereby renamed “Schedule F”.

 

VI.                                  The reference to “Schedule C” contained in the last paragraph of newly renumbered Section 10 of the Contract is hereby amended to instead refer to “Schedule G” and, in connection therewith, (a) the first occurring original (untitled) Schedule C to the Contract is hereby renamed “Schedule G” and (b) the second occurring original Schedule C to the Contract (entitled ‘Remote Access Services Addendum to Custodian Agreement’) shall no longer be referred to as “Schedule C.”

 

8



 

VII.                              Except as specifically superseded or modified herein, the terms and provisions of the Contract shall continue to apply with full force and effect. In the event of any conflict between the terms of the Contract prior to this Amendment and this Amendment, the terms of this Amendment shall prevail. If the Custodian is delegated the responsibilities of Foreign Custody Manager pursuant to the terms of Article 3 hereof, in the event of any conflict between the provisions of Articles 3 and 4 hereof, the provisions of Article 3 shall prevail.

 

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

 

9



 

SIGNATURE PAGE

 

IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed in its name and behalf by its duly authorized representative as of the date first above written.

 

WITNESSED BY:

 

STATE STREET BANK AND TRUST COMPANY

 

 

 

 

 

 

/s/ Stephanie L. Poster

 

By:

/s/ Joseph L. Hooley

Stephanie L. Poster

 

 

Joseph L. Hooley, Executive Vice President

Vice President

 

 

 

 

 

WITNESSED BY:

 

EACH INVESTMENT COMPANY SET FORTH ON EXHIBIT I HERETO

 

 

 

 

 

 

/s/ Gregory Bressler

 

By:

/s/ Hal Liebes

Gregory Bressler

 

 

Hal Liebes, Secretary

Assistant Secretary

 

 

 

10



 

EXHIBIT I

 

FUND NAME(1)

 

FORM OF ORGANIZATION

 

 

 

Credit Suisse Institutional Fund, Inc.

·       Cash Reserve Portfolio
·       Emerging Markets Portfolio
·       International Equity Portfolio
·       Major Foreign Markets Portfolio
·       Small Company Growth Portfolio
·       Value Portfolio
·       Warburg Pincus Post-Venture Capital Portfolio
·       Global Telecommunications Portfolio

 

Maryland corporation

Credit Suisse Warburg Pincus Balanced Fund, Inc.
Credit Suisse Warburg Pincus Cash Reserve Fund, Inc.
Credit Suisse Warburg Pincus Emerging Markets Fund, Inc.
Credit Suisse Warburg Pincus Global Fixed Income Fund, Inc.
Credit Suisse Warburg Pincus Global Post-Venture Capital Fund, Inc.
Credit Suisse Warburg Pincus Global Health Sciences Fund, Inc.
Credit Suisse Warburg Pincus International Equity Fund, Inc.
Credit Suisse Warburg Pincus International Small Company Fund, Inc.
Credit Suisse Warburg Pincus Japan Growth Fund, Inc.
Credit Suisse Warburg Pincus Japan Small Company Fund, Inc.
Credit Suisse Warburg Pincus Major Foreign Markets Fund, Inc.
Credit Suisse Warburg Pincus New York Tax Exempt Fund, Inc.
Warburg Pincus Trust

 

Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Maryland corporation
Massachusetts business trust

·       Emerging Growth Portfolio
·       International Equity Portfolio
·       Global Post-Venture Capital Portfolio
·       Small Company Growth Portfolio
·       Value Portfolio
·       Emerging Markets Portfolio
·       Global Telecommunications Portfolio

 

 

Warburg Pincus Trust II

 

Massachusetts business trust

·       Fixed Income Portfolio

 

 

Credit Suisse Warburg Pincus Worldperks Money Market Fund, Inc.

 

Maryland corporation

 


(1)           For entities with multiple portfolios, the individual portfolios are bulleted beneath the Fund name.

 



 

FUND NAME(1)

 

FORM OF ORGANIZATION

 

 

 

Credit Suisse Warburg Pincus Worldperks Tax Free Money Market Fund, Inc.

 

Maryland corporation

 



 

SCHEDULE A

 

STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS

 

Country

 

Subcustodian

 

 

 

Argentina

 

Citibank, N.A.

 

 

 

Argentina

 

Citibank, N.A.

 

 

 

Australia

 

Westpac Banking Corporation

 

 

 

Austria

 

Erste Bank der Osterreichischen Sparkassen AG

 

 

 

Bahrain

 

HSBC Bank Middle East
(as delegate of The Hongkong
and Shanghai Banking Corporation Limited)

 

 

 

Bangladesh

 

Standard Chartered Bank

 

 

 

Belgium

 

Fortis Bank nv-sa

 

 

 

Bermuda

 

The Bank of Bermuda Limited

 

 

 

Bolivia

 

Citibank, N. A.

 

 

 

Botswana

 

Barclays Bank of Botswana Limited

 

 

 

Brazil

 

Citibank, N.A.

 

 

 

Bulgaria

 

ING Bank N.V.

 

 

 

Canada

 

State Street Trust Company Canada

 

 

 

Chile

 

BankBoston, N.A.

 

 

 

People’s Republic of China

 

The Hongkong and Shanghai
Banking Corporation Limited,
Shanghai and Shenzhen branches

 

 

 

Colombia

 

Cititrust Colombia S.A. Sociedad Fiduciaria

 

 

 

Costa Rica

 

Banco BCT S.A.

 

 

 

Croatia

 

Privredna Banka Zagreb d.d

 

 

 

Cyprus

 

The Cyprus Popular Bank Ltd.

 

 

 

Czech Republic

 

Ceskoslovenska Obchodni

 

1



 

Country

 

Subcustodian

 

 

 

 

 

Banka, A.S.

 

 

 

Denmark

 

Danske Bank A/S

 

 

 

Ecuador

 

Citibank, N.A.

 

 

 

Egypt

 

Egyptian British Bank S.A.E.
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)

 

 

 

Estonia

 

Hansabank

 

 

 

Finland

 

Merita Bank Plc.

 

 

 

France

 

BNP Paribas, S.A.

 

 

 

Germany

 

Dresdner Bank AG

 

 

 

Ghana

 

Barclays Bank of Ghana Limited

 

 

 

Greece

 

National Bank of Greece S.A.

 

 

 

Hong Kong

 

Standard Chartered Bank

 

 

 

Hungary

 

Citibank Rt.

 

 

 

Iceland

 

Icebank Ltd.

 

 

 

India

 

Deutsche Bank AG
The Hongkong and Shanghai
Banking Corporation Limited

 

 

 

Indonesia

 

Standard Chartered Bank

 

 

 

Ireland

 

Bank of Ireland

 

 

 

Israel

 

Bank Hapoalim B.M.

 

 

 

Italy

 

BNP Paribas, Italian Branch

 

 

 

Ivory Coast

 

Société Géneralé de Banques en Côte d’Ivoire

 

 

 

Jamaica

 

Scotiabank Jamaica Trust and Merchant Bank Ltd.

 

2



 

Country

 

Subcustodian

 

 

 

Japan

 

The Fuji Bank, Limited
The Sumitomo Bank, Limited

 

 

 

Jordan

 

HSBC Bank Middle East
(as delegate of The Hongkong
and Shanghai Banking Corporation Limited)

 

 

 

Kazakhstan

 

HSBC Bank Kazakhstan

 

 

 

Kenya

 

Barclays Bank of Kenya Limited

 

 

 

Republic of Korea

 

The Hongkong and Shanghai Banking
Corporation Limited

 

 

 

Latvia

 

A/s Hansabanka

 

 

 

Lebanon

 

HSBC Bank Middle East
(as delegate of The Hongkong and
Shanghai Banking Corporation Limited)

 

 

 

Lithuania

 

Vilniaus Bankas AB

 

 

 

Malaysia

 

Standard Chartered Bank Malaysia Berhad

 

 

 

Mauritius

 

The Hongkong and Shanghai
Banking Corporation Limited

 

 

 

Mexico

 

Citibank Mexico, S.A.

 

 

 

Morocco

 

Banque Commerciale du Maroc

 

 

 

Namibia

 

Standard Bank Namibia Limited

 

 

 

Netherlands

 

Fortis Bank (Nederland) N.V.

 

 

 

New Zealand

 

ANZ Banking Group (New Zealand) Limited

 

 

 

Nigeria

 

Stanbic Merchant Bank Nigeria Limited

 

 

 

Norway

 

Christiania Bank og Kreditkasse ASA

 

 

 

Oman

 

HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking

 

3



 

Country

 

Subcustodian

 

 

 

 

 

Corporation Limited)

 

 

 

Pakistan

 

Deutsche Bank AG

 

 

 

Palestine

 

HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking Corporation Limited)

 

 

 

Panama

 

BankBoston, N.A.

 

 

 

Peru

 

Citibank, N.A.

 

 

 

Philippines

 

Standard Chartered Bank

 

 

 

Poland

 

Bank Handlowy w Warszawie S.A.

 

 

 

Portugal

 

Banco Comercial Português

 

 

 

Qatar

 

HSBC Bank Middle East
(as delegate of The Hongkong and Shanghai Banking Corporation Limited)

 

 

 

Romania

 

ING Bank N.V.

 

 

 

Russia

 

Credit Suisse First Boston AO — Moscow (as delegate of Credit Suisse First Boston - Zurich)

 

 

 

Singapore

 

The Development Bank of Singapore Limited

 

 

 

Slovak Republic

 

Ceskoslovenská Obchodní Banka, A.S.

 

 

 

Slovenia

 

Bank Austria Creditanstalt d.d. - Ljubljana

 

 

 

South Africa

 

Standard Bank of South Africa Limited

 

 

 

Spain

 

Banco Santander Central Hispano S.A.

 

 

 

Sri Lanka

 

The Hongkong and Shanghai Banking Corporation Limited

 

 

 

Swaziland

 

Standard Bank Swaziland Limited

 

 

 

Sweden

 

Skandinaviska Enskilda Banken

 

4



 

Country

 

Subcustodian

 

 

 

Switzerland

 

UBS AG

 

 

 

Taiwan - R.O.C.

 

Central Trust of China

 

 

 

Thailand

 

Standard Chartered Bank

 

 

 

Trinidad & Tobago

 

Republic Bank Limited

 

 

 

Tunisia

 

Banque Internationale Arabe de Tunisie

 

 

 

Turkey

 

Citibank, N.A.

 

 

 

Ukraine

 

ING Bank Ukraine

 

 

 

United Kingdom

 

State Street Bank and Trust Company, London Branch

 

 

 

Uruguay

 

BankBoston, N.A.

 

 

 

Venezuela

 

Citibank, N.A.

 

 

 

Vietnam

 

The Hongkong and Shanghai Banking Corporation Limited

 

 

 

Zambia

 

Barclays Bank of Zambia Limited

 

 

 

Zimbabwe

 

Barclays Bank of Zimbabwe Limited

 

5



 

SCHEDULE B

 

STATE STREET
GLOBAL CUSTODY NETWORK
DEPOSITORIES OPERATING IN NETWORK MARKETS

 

Country

 

Depositories

 

 

 

Argentina

 

Caja de Valores S.A.

 

 

 

Australia

 

Austraclear Limited Reserve Bank Information and Transfer System

 

 

 

Austria

 

Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)

 

 

 

Belgium

 

Caisse Interprofessionnelle de Depots et de Virements de Titres, S.A.

Banque Nationale de Belgique

 

 

 

Brazil

 

Companhia Brasileira de Liquidacao e Custodia

Sistema Especial de Liquidacao e de Cust6dia (SELIC)

Central de Custodia e de Liquidacao Financeira de Thulos Privados (CETIP)

 

 

 

Bulgaria

 

Central Depository AD
Bulgarian National Bank

 

 

 

Canada

 

Canadian Depository for Securities Limited

 

 

 

Chile

 

Deposito Central de Valores S.A.

 

 

 

People’s Republic of China

 

Shanghai Securities Central Clearing & Registration Corporation

Shenzhen Securities Central Clearing Co., Ltd.

 

 

 

Colombia

 

Depósito Centralizado de Valores

 

 

 

Costa Rica

 

Central de Valores S.A.

 

 

 

Croatia

 

Ministry of Finance

National Bank of Croatia

 

1



 

Country

 

Depositories

 

 

 

 

 

Središnja Depozitarna Agencija d.d.

 

 

 

Czech Republic

 

Stredisko cenných papíru

Czech National Bank

 

 

 

Denmark

 

Værdipapircentralen (Danish Securities Center)

 

 

 

Egypt

 

Misr for Clearing, Settlement, and Depository

 

 

 

Estonia

 

Eesti Väärtpaberite Keskdepositoorium

 

 

 

Finland

 

Finnish Central Securities Depository

 

 

 

France

 

Euroclear France

 

 

 

Germany

 

Clearstream Banking AG, Frankfurt

 

 

 

Greece

 

Bank of Greece, System for Monitoring Transactions in Securities in Book-Entry Form

Apothetirion Titlon AE - Central Securities Depository

 

 

 

Hong Kong

 

Central Clearing and Settlement System Central Moneymarkets Unit

 

 

 

Hungary

 

Központi Elszárnolóház és Értéktár (Budapest) Rt. (KELER)

 

 

 

India

 

National Securities Depository Limited

Central Depository Services India Limited

Reserve Bank of India

 

 

 

Indonesia

 

Bank Indonesia

PT Kustodian Sentral Efek Indonesia

 

 

 

Israel

 

Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearinghouse)

 

2



 

Country

 

Depositories

 

 

 

Italy

 

Monte Titoli S.p.A.

 

 

 

Ivory Coast

 

Depositaire Central — Banque de Reglement

 

 

 

Jamaica

 

Jamaica Central Securities Depository

 

 

 

Japan

 

Japan Securities Depository Center (JASDEC) Bank of Japan Net System

 

 

 

Kazakhstan

 

Central Depository of Securities

 

 

 

Kenya

 

Central Bank of Kenya

 

 

 

Republic of Korea

 

Korea Securities Depository

 

 

 

Latvia

 

Latvian Central Depository

 

 

 

Lebanon

 

Custodian and Clearing Center of Financial Instruments for Lebanon and the Middle East (Midclear) S.A.L.

Banque du Liban

 

 

 

Lithuania

 

Central Securities Depository of Lithuania

 

 

 

Malaysia

 

Malaysian Central Depository Sdn. Bhd.

Bank Negara Malaysia, Scripless Securities Trading and Safekeeping System

 

 

 

Mauritius

 

Central Depository and Settlement Co. Ltd.

Bank of Mauritius

 

 

 

Mexico

 

S.D. INDEVAL (Instituto para el Deposit° de Valores)

 

 

 

Morocco

 

Maroclear

 

 

 

Netherlands

 

Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V. (NECIGEF)

 

 

 

New Zealand

 

New Zealand Central Securities Depository Limited

 

3



 

Country

 

Depositories

 

 

 

Nigeria

 

Central Securities Clearing System Limited

 

 

 

Norway

 

Verdipapirsentralen (Norwegian Central Securities Depository)

 

 

 

Oman

 

Muscat Depository & Securities Registration Company, SAOC

 

 

 

Pakistan

 

Central Depository Company of Pakistan Limited

State Bank of Pakistan

 

 

 

Palestine

 

Clearing Depository and Settlement, a department of the Palestine Stock Exchange

 

 

 

Peru

 

Caja de Valores y Liquidaciones, Institucion de Compensación y Liquidación de Valores S.A

 

 

 

Philippines

 

Philippine Central Depository, Inc.

Registry of Scripless Securities (ROSS) of the Bureau of Treasury

 

 

 

Poland

 

National Depository of Securities (Krajowy Depozyt PapierOw Wartostiowych SA)

Central Treasury Bills Registrar

 

 

 

Portugal

 

Central de Valores Mobiliarios

 

 

 

Qatar

 

Central Clearing and Registration (CCR), a department of the Doha Securities Market

 

 

 

Romania

 

National Securities Clearing, Settlement and Depository Company

Bucharest Stock Exchange Registry Division

National Bank of Romania

 

 

 

Singapore

 

Central DepOsitory (Pte) Limited

Monetary Authority of Singapore

 

4



 

Country

 

Depositories

 

 

 

Slovak Republic

 

Stredisko cenných papierov

National Bank of Slovakia

 

 

 

Slovenia

 

Klirinsko Depotna Druzba d.d.

 

 

 

South Africa

 

Central Depository Limited

Share Transactions Totally Electronic (STRATE) Ltd.

 

 

 

Spain

 

Servicio de Compensación y Liquidación de Valores, S.A.

Banco de Espana, Central de Anotaciones en Cuenta

 

 

 

Sri Lanka

 

Central Depository System (Pvt) Limited

 

 

 

Sweden

 

Värdepapperscentralen VPC AB (Swedish Central Securities Depository)

 

 

 

Switzerland

 

Segalntersettle AG (SIS)

 

 

 

Taiwan - R.O.C.

 

Taiwan Securities Central Depository Co., Ltd.

 

 

 

Thailand

 

Thailand Securities Depository Company Limited

 

 

 

Tunisia

 

Societe Tunisienne Interprofessionelle pour la Compensation et de Depots des Valeurs Mobilieres

 

 

 

Turkey

 

Takas ve Saklama Bankasi A.S. (TAKASBANK)

Central Bank of Turkey

 

 

 

Ukraine

 

National Bank of Ukraine

 

 

 

United Kingdom

 

Central Gilts Office and Central Moneymarkets Office

 

 

 

Venezuela

 

Banco Central de Venezuela

 

 

 

Zambia

 

LuSE Central Shares Depository Limited

Bank of Zambia

 

5



 

TRANSNATIONAL

 

Euroclear

 

Clearstream Banking AG

 

6



 

SCHEDULE C

 

MARKET INFORMATION

 

Publication/Type of Information

 

Brief Description

(Frequency)

 

 

 

 

 

The Guide to Custody in World Markets
(annually)

 

An overview of safekeeping and settlement practices and procedures in each market in which State Street Bank and Trust Company offers custodial services.

 

 

 

Global Custody Network Review
  (annually)

 

Information relating to the operating history and structure of depositories and subcustodians located in the markets in which State Street Bank and Trust Company offers custodial services, including transnational depositories.

 

 

 

Global Legal Survey
(annually)

 

With respect to each market in which State Street Bank and Trust Company offers custodial services, opinions relating to whether local law restricts (i) access of a fund’s independent public accountants to books and records of a Foreign Sub-Custodian or Foreign Securities System, (ii) the Fund’s ability to recover in the event of bankruptcy or insolvency of a Foreign Sub-Custodian or Foreign Securities System, (iii) the Fund’s ability to recover in the event of a loss by a Foreign Sub-Custodian or Foreign Securities System, and (iv) the ability of a foreign investor to convert cash and cash equivalents to U.S. dollars.

 

 

 

Subcustodian Agreements
(annually)

 

Copies of the subcustodian contracts State Street Bank and Trust Company has entered into with each subcustodian in the markets in which State Street Bank and Trust Company offers subcustody services to its US mutual fund clients.

 

 

 

Network Bulletins
(weekly):

 

Developments of interest to investors in the markets in which State Street Bank and Trust Company offers custodial services.

 

 

 

Foreign Custody Advisories
(as necessary):

 

With respect to markets in which State Street Bank and Trust Company offers custodial services which exhibit special custody risks, developments which may impact State Street’s ability to deliver expected levels of service.

 


Exhibit 99.(j)(3)

 

AMENDMENT TO CUSTODIAN AGREEMENT

 

This Amendment to Custodian Agreement is made as of May 16, 2001 by and among each of the investment companies listed and described on Exhibit I hereto (each, a “Fund” and sometimes collectively referred to as the “Funds”) and STATE STREET BANK AND TRUST COMPANY (the “Custodian”).

 

WHEREAS, certain Funds and the Custodian entered into a Custodian Agreement dated as of October 20, 2000 (as amended, modified or supplemented and in effect from time to time including, without limitation, pursuant to that certain Amendment to Custodian Agreement dated as of April 26, 2001 among the parties listed on Exhibit I thereto, the “Contract”);

 

WHEREAS, other Funds, not previously party to the Contract (the “New Funds”), desire to employ the Custodian as custodian therefor and the Custodian is willing to accept such appointment and render services to the New Funds under the terms of the Contract; and

 

WHEREAS, the Funds and the Custodian desire to amend the Contract to (a) reflect the addition of certain Funds as parties thereto and (b) modify certain terms thereof.

 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter contained, the parties hereby agree to amend the Contract, pursuant to the terms thereof, as follows.

 

I.               Capitalized terms used in this Amendment without definition shall have the respective meanings given to such terms in the Contract.

 

II.             Exhibit Ito the Contract is hereby deleted in its entirety and replaced by new Exhibit I, a copy of which is attached as Exhibit I hereto.

 

III.            Each Fund listed on Exhibit I hereto hereby represents and warrants to the Custodian that (a) it is duly incorporated or organized and is validly existing in good standing in its jurisdiction of incorporation or organization; (b) it has the requisite power and authority under applicable law and its respective governing documents to enter into and perform the Contract; (c) all requisite proceedings have been taken to authorize it to enter into and perform the Contract; (d) the Contract constitutes its legal, valid, binding and enforceable agreement; and (e) its entrance into the Contract shall not cause a material breach or be in material conflict with any other agreement or obligation of the Fund or any law or regulation applicable to it.

 

IV.            The Contract is hereby amended by adding new Section 21A thereto as follows:

 

21A.  Additional Investment Companies

 

In the event that any investment company in addition to those listed on Exhibit I hereto desires to have the Custodian render services as custodian under the terms hereof, it shall so notify the Custodian in writing, and if the Custodian agrees in writing to provide such services, such investment company shall become a

 



 

Fund hereunder and be bound by all terms and conditions and provisions hereof including, without limitation, the representations and warranties set forth in Section III of that certain Amendment to Custodian Agreement dated as of May 16, 2001.

 

V.             Effective June 1, 2001, Schedule F to the Contract shall be deleted in its entirety and replaced by new Schedule F, a copy of which is attached as Schedule F hereto.

 

VI.            Except as specifically amended hereby, all terms and provisions of the Contract shall continue to apply with full force and effect.

 

IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed in its name and behalf by its duly authorized representative as of the date first above written.

 

WITNESS:

 

STATE STREET BANK AND TRUST

 

 

COMPANY

 

 

 

 

 

 

/s/ Stephanie L. Poster

 

 

Stephanie L. Poster

 

By:

/s/ Joseph L. Hooley

Vice President

 

 

Joseph L. Hooley, Executive Vice President

 

 

 

 

 

 

WITNESS:

 

EACH INVESTMENT COMPANY SET FORTH ON EXHIBIT 1 HERETO

 

 

 

 

 

 

/s/ Gregory Bressler

 

 

Gregory Bressler

 

By:

/s/ Michael Pignataro

Assistant Secretary

 

 

Michael Pignataro

 

 

 

Treasurer and Chief Financial Officer

 

2



 

EXHIBIT I

 

FUND NAME(1)

 

FORM OF ORGANIZATION

 

 

 

Credit Suisse Institutional Fund, Inc.

 

Maryland corporation

 

 

 

 

·

Cash Reserve Portfolio

 

 

 

·

Emerging Markets Portfolio

 

 

 

·

International Equity Portfolio

 

 

 

·

Major Foreign Markets Portfolio

 

 

 

·

Small Company Growth Portfolio

 

 

 

·

Value Portfolio

 

 

 

·

Warburg Pincus Post-Venture Capital Portfolio

 

 

 

·

Global Telecommunications Portfolio

 

 

 

 

 

 

 

Credit Suisse Institutional High Yield Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Institutional International Growth Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Institutional U.S Core Equity Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Institutional U.S. Core Fixed Income Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Aggressive Growth Fund

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Balanced Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Capital Funds

 

Massachusetts business trust

 

 

 

 

·

Credit Suisse Warburg Pincus Blue Chip Fund

 

 

 

·

Credit Suisse Warburg Pincus Small Company Value Fund

 

 

 

·

Credit Suisse Warburg Pincus Value Fund

 

 

 

 

 

 

 

Credit Suisse Warburg Pincus Cash Reserve Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Capital Appreciation Fund

 

Massachusetts business trust

 

 

 

Credit Suisse Warburg Pincus Emerging Growth Fund, Inc.

 

Maryland corporation

 



 

Credit Suisse Warburg Pincus Emerging Markets Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus European Equity Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Fixed Income Fund

 

Massachusetts business trust

 

 

 

Credit Suisse Warburg Pincus Focus Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Global Financial Services Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Global Fixed Income Fund Growth Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Global Health Sciences Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Global New Technologies Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Global Post-Venture Capital Fund

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Global Telecommunications Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Intermediate Maturity Government Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus International Equity Fund

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus International Small Company Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Japan Growth Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Japan Small Company Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Major Foreign Markets Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincu s Municipal Bond Fund, Inc.

 

Maryland corporation

 

4



 

Credit Suisse Warburg Pincus New York Intermediate Municipal Fund

 

Massachusetts business trust

 

 

 

Credit Suisse Warburg Pincus New York Tax Exempt Fund

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincu s Opportunity Funds

 

Delaware business trust

 

 

 

 

 

 

·

Credit Suisse Warburg Pincus High Income Fund

 

 

 

·

Credit Suisse Warburg Pincu s International Equity II Fund

 

 

 

·

Credit Suisse Warburg Pincus Municipal Money Fund

 

 

 

·

Credit Suisse Warburg Pincus U.S. Government Money Fund

 

 

 

 

 

Credit Suisse Warburg Pincus Select Funds

 

Delaware business trust

 

 

 

 

·

Credit Suisse Warburg Pincu s Technology Fund

 

 

 

 

 

 

 

Credit Suisse Warburg Pincus Small Company Growth Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Trust

 

Massachusetts business trust

 

 

 

 

·

Emerging Growth Portfolio

 

 

 

·

International Equity Portfolio

 

 

 

·

Global Post-Venture Capital Portfolio

 

 

 

·

Small Company Growth Portfolio

 

 

 

·

Value Portfolio

 

 

 

·

Emerging Markets Portfolio

 

 

 

·

Global Telecommunications Portfolio

 

 

 

 

 

 

 

Credit Suisse Warburg Pincus Trust II

 

Massachusetts business trust

 

 

 

 

·

Fixed Income Portfolio

 

 

 

 

 

Credit Suisse Warburg Pincus Value II Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Worldperks Money Market Fund, Inc.

 

Maryland corporation

 

 

 

Credit Suisse Warburg Pincus Worldperks Tax Free Money Market Fund, Inc.

 

Maryland corporation

 

5


Exhibit 99.(j)(4)

 

AMENDMENT TO CUSTODIAN AGREEMENT

 

Amendment dated November 16, 2005, to the Custodian Agreement, dated October 20, 2000, as amended, by and between State Street Bank and Trust Company (the “Custodian”) and each of the investment companies listed and described on Exhibit I, as amended from time to time (each, the “Fund”) (the “Agreement”).  All capitalized terms not otherwise defined herein have the meanings ascribed to them in the Agreement.

 

WHEREAS, each Fund and the Custodian wish to amend certain provisions of the Agreement to allow for delivery out of margin in connection with trading in futures and options on futures contracts entered into by such Fund, and

 

WHEREAS, each Fund and the Custodian wish to modify the language of the provision on Proper Instructions.

 

NOW, THEREFORE, in consideration of the promises and covenants contained herein, the Custodian and the Fund hereby agree to amend the Agreement as follows:

 

I.               New Section 2.2(15) is hereby added, and existing Section 2.2(15) is hereby amended and renumbered as 2.2(16) as set forth below.  Existing Section 2.2(16) is hereby renumbered as 2.2(17).

 

[Section] 2.2          Delivery of Securities

 

(15)          For delivery of initial or variation margin in connection with trading in futures and options on futures contracts entered into the Fund on behalf of the applicable Portfolio;

 

(16)          For any other purpose, but only upon receipt of Proper Instructions from the Fund, on behalf of the applicable Portfolio, specifying the securities of the Portfolio to be delivered and naming the person or persons to whom delivery of such securities shall be made; and

 

II.             New Section 2.7(7) is hereby added, and existing Section 2.7(7) is amended and renumbered as 2.7(8) as set forth below.  Existing Section 2.7(8) is hereby renumbered as 2.7(9).

 

[Section] 2.7          Payment of Fund Monies

 

(7)            For the payment of initial or variation margin in connection with trading in futures and options on futures contracts entered into by the Fund on behalf of the applicable Portfolio;

 

(8)            For any other purpose, but only upon receipt of Proper Instructions from the Fund, on behalf of the applicable Portfolio, specifying the amount of such payment and naming the person or persons to whom such payment is to be made; and

 



 

III.            Section 5 is amended and replaced as set forth below.

 

Section 5.               Proper Instructions

 

“Proper Instructions”, which may also be standing instructions, as used throughout this Agreement shall mean instructions received by the Custodian from the Fund, the Fund’s investment manager or subadvisor, as duly authorized by the Fund.  Such instructions may be in writing signed by the authorized person or persons or may be in a tested communication or in a communication utilizing access codes effected between electromechanical or electronic devices or may be by such other means and utilizing such intermediary systems and utilities as may be agreed to from time to time by the Custodian and the person or entity giving such instructions, provided that the Fund has followed any security procedures agreed to from time to time by the Fund and the Custodian, including, but not limited to, the security procedures selected by the Fund in the Funds Transfer Addendum to this Agreement.  Oral instructions will be considered Proper Instructions if the Custodian reasonably believes them to have been given by a person authorized to give such instructions with respect to the transaction involved.  The Fund shall cause all oral instructions to be confirmed in writing.  For purposes of this Section, Proper Instructions shall include instructions received by the Custodian pursuant to any multi-party agreement, which requires a segregated asset account in accordance with Section 2.12 and 3.21 of this Agreement.  The Fund or the Fund’s investment manager shall cause its duly authorized officer to certify to the Custodian in writing the names and specimen signatures of persons authorized to give Proper Instructions.  The Custodian shall be entitled to rely upon the identity and authority of such persons until it receives notice from the Fund to the contrary.

 

IN WITNESS WHEREOF, each of the parties has caused this instrument to be executed in its name and on its behalf by its duly authorized representative as of the date written above.

 

EACH FUND LISTED ON EXHIBIT I

 

By:

/s/ Michael A. Pignataro

 

Name:

Michael A. Pignataro

 

Title:

CFO

 

 

 

 

 

 

 

STATE STREET BANK AND TRUST COMPANY

 

 

 

 

 

By:

/s/ Joseph L. Hooley

 

 

Joseph L. Hooley

 

 

Executive Vice President

 

 

2


Exhibit 99.(j)(5)

 

Credit Suisse Asset Management Income Fund, Inc.

Eleven Madison Avenue

New York, New York 10010-3629

 

State Street Bank and Trust Company

One Federal Street, B02/2

Boston, Massachusetts 02110

Attention: Tricia L. Cormier, Vice President

 

Re: Credit Suisse Asset Management Income Fund, Inc. (the “ Fund ”)

 

Ladies and Gentlemen:

 

Please be advised that the undersigned Fund has been incorporated and registered as a management investment company under the Investment Company Act of 1940, as amended.

 

In accordance with Section 21A, the Additional Investment Companies provision, of the Custodian Agreement dated as of October 20, 2000, by and among each management investment company party thereto and State Street Bank and Trust Company (as amended, modified or supplemented from time to time, the “ Agreement ”), the undersigned Fund hereby requests that your bank act as Custodian for the Fund under the terms of the Agreement. In connection with such request, the undersigned Fund hereby confirms to you, as of the date hereof, its representations and warranties set forth in Section III of that certain Amendment to Custodian Agreement dated as of May 16, 2001.

 

Kindly indicate your acceptance of the foregoing by executing two copies of this letter agreement, returning one to the Fund and retaining one for your records.

 

 

 

Sincerely,

 

 

 

 

 

 

 

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

 

 

 

 

 

 

 

 

 

By:

/s/ Michael A. Pignataro

 

 

Name:

Michael A. Pignataro

 

 

Title

CFO                           ,Duly Authorized

 

 

 

 

 

 

Agreed and Accepted:

 

 

 

 

 

STATE STREET BANK AND TRUST COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Joseph L. Hooley

 

 

 

Name: 

Joseph L. Hooley

 

 

 

Title:

Executive Vice President

 

Effective Date:  November 19, 2007

 


Exhibit 99.(k)(1)

 

 

 

AGREEMENT

 

for

 

STOCK TRANSFER AGENT SERVICES

 

 

CREDIT SUISSE ASSET MANAGEMENT
INCOME FUND, INC.

 

 

and

 

 

EQUISERVE TRUST COMPANY, N.A.

 

and

 

EQUISERVE, INC.

 



 

Table of Contents

 

Article 1

 

Terms of Appointment; Duties of EquiServe

 

3

 

 

 

 

 

Article 2

 

Fees and Expenses

 

5

 

 

 

 

 

Article 3

 

Representations and Warranties of EquiServe

 

6

 

 

 

 

 

Article 4

 

Representations and Warranties of the Fund

 

7

 

 

 

 

 

Article 5

 

Data Access and Proprietary Information

 

8

 

 

 

 

 

Article 6

 

Indemnification

 

9

 

 

 

 

 

Article 7

 

Standard of Care

 

11

 

 

 

 

 

Article 8

 

Covenants of the Fund and EquiServe

 

12

 

 

 

 

 

Article 9

 

Termination of Agreement

 

13

 

 

 

 

 

Article 10

 

Assignment

 

13

 

 

 

 

 

Article 11

 

Amendment

 

13

 

 

 

 

 

Article 12

 

Massachusetts Law to Apply

 

14

 

 

 

 

 

Article 13

 

Force Majeure

 

14

 

 

 

 

 

Article 14

 

Consequential Damages

 

14

 

 

 

 

 

Article 15

 

Merger of Agreement

 

14

 

 

 

 

 

Article 16

 

Survival

 

14

 

 

 

 

 

Article 17

 

Severability

 

15

 

 

 

 

 

Article 18

 

Counterparts

 

15

 

2



 

REGISTRAR, TRANSFER AGENCY AND SERVICE AGREEMENT

 

AGREEMENT made as of the 1 st  day of March, 2003 , between Credit Suisse Asset Management Income Fund, Inc., having a principal office and place of business at 466 Lexington Avenue, 17th Floor, New York, NY 10017, (the “Fund”), and EquiServe, Inc., a Delaware corporation, and its fully owned subsidiary EquiServe Trust Company, N.A., a federally chartered trust company doing business at 150 Royall Street, Canton, Massachusetts 02021 (collectively, “EquiServe” or individually “EQI” and the “Trust Company”, respectively).

 

WHEREAS, the Fund desires to appoint EquiServe as its registrar, transfer agent, dividend disbursing agent and agent in connection with certain other activities and EquiServe desires to accept such appointment;

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

 

Article 1                                                Terms of Appointment; Duties of EquiServe

 

1.01                            Subject to the terms and conditions set forth in this Agreement, the Fund hereby employs and appoints EquiServe to act as, and EquiServe accepts such appointment and agrees to act as registrar and transfer agent for the Fund’s authorized and issued shares of common stock or shares of beneficial interest, as the case may be (“Shares”), and dividend disbursing agent and agent in connection with any dividend reinvestment plan as set out in the Fund’s Annual Report to Shareholders.

 

1.02                            EquiServe agrees that it will perform the following services:

 

(a)                                   In accordance with procedures established from time to time by agreement between the Fund and EquiServe, EquiServe shall:

 

(i)                                      Issue and record the appropriate number of Shares as authorized and hold such Shares in the appropriate shareholder account;

 

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(ii)                                   Effect transfers of Shares by the registered owners thereof upon receipt of appropriate documentation;

 

(iii)                                Prepare and transmit payments for dividends and distributions declared by the Fund;

 

(iv)                               Act as agent for Shareholders pursuant to the dividend reinvestment and cash purchase plan of the Fund as amended from time to time;

 

(v)                                  Issue replacement certificates for those certificates alleged to have been lost, stolen or destroyed upon receipt by EquiServe of indemnification satisfactory to EquiServe and protecting EquiServe and the Fund, and EquiServe at its option, may issue replacement certificates in place of mutilated stock certificates upon presentation thereof and without such indemnity.

 

(b)                                  In addition to and neither in lieu nor in contravention of the services set forth in the above paragraph (a), EquiServe shall: (i) perform all of the customary services of a registrar, transfer agent, dividend disbursing agent and agent of the dividend reinvestment and cash purchase plan as described in Article 1 consistent with those requirements in effect as of the date of this Agreement and (ii) perform the functions more fully described in the Fee and Service Schedule for Stock Transfer Services annexed hereto and incorporated herein.  The detailed definition, frequency, limitations and associated costs (if any) set out in the attached Fee and Service Schedule, includes, but are not limited to: maintaining all Shareholder accounts, preparing Shareholder meeting lists, mailing proxies, and mailing Shareholder reports to current Shareholders, withholding taxes on U.S. resident and non-resident alien accounts where

 

4



 

applicable, preparing and filing U.S. Treasury Department Forms 1099 and other appropriate forms required with respect to dividends and distributions by federal authorities for all registered Shareholders.

 

(c)                                   EquiServe shall provide additional services on behalf of the Fund (i.e., escheatment services) which may be agreed upon in writing between the Fund and EquiServe.

 

Article 2                                                Fees and Expenses

 

2.01                            For the performance by EquiServe pursuant to this Agreement, the Fund agrees to pay EquiServe an annual maintenance fee as set out in the initial fee schedule attached hereto.  Such fees and out-of-pocket expenses and advances identified under Section 2.02 below may be changed from time to time subject to mutual written agreement between the Fund and EquiServe.

 

2.02                            In addition to the fee paid under Section 2.01 above, the Fund agrees to reimburse EquiServe for out-of-pocket expenses, including but not limited to confirmation production, postage, forms, telephone, microfilm, microfiche, tabulating proxies, records storage, or advances incurred by EquiServe for the items set out in the fee schedule attached hereto.  In addition, any other expenses incurred by EquiServe at the request or with the consent of the Fund will be reimbursed by the Fund.  Unspecified out-of-pocket expenses shall be limited to those out-of-pocket expenses reasonably incurred by EquiServe in the performance of its obligations hereunder.

 

2.03                            The Fund agrees to pay all fees and reimbursable expenses within thirty (30) days following the receipt of the respective billing notice.  Postage and the cost of materials for mailing of dividends, proxies, Fund reports and other mailings to all Shareholder accounts shall be advanced to EquiServe by the Fund at least seven (7) days prior to the mailing date of such materials.

 

5



 

Article 3                                                Representations and Warranties of EquiServe

 

EquiServe represents and warrants to the Fund that:

 

3.01                            Governance .  The Trust Company is a federally chartered limited purpose national bank duly organized under the laws of the United States and EQI is a corporation validly existing and in good standing under the laws of the State of Delaware and each has full corporate power, authority and legal right to execute, deliver and perform this Agreement.  The execution, delivery and performance of this Agreement by EquiServe has been duly authorized by all necessary corporate action and constitutes the legal valid and binding obligation of EquiServe enforceable against EquiServe in accordance with its terms.

 

3.02                            Compliance .  The execution, delivery and performance of the Agreement by EquiServe will not violate, conflict with or result in the breach of any material term, condition or provision of, or require the consent of any other party to, (i) any existing law, ordinance, or governmental rule or regulation to which EquiServe is subject, (ii) any judgement, order, writ, injunction, decree or award of any court, arbitrator or governmental or regulatory official, body or authority which is applicable to EquiServe, (iii) the incorporation documents or By-Laws of, or any material agreement to which EquiServe is a party.  EquiServe will comply with all applicable laws and regulations.

 

3.03                            Facilities .  EquiServe has and will continue to have access to the necessary facilities, equipment and personnel to perform its duties and obligations under this Agreement.

 

3.04                            Computer Services

 

DATA ACCESS SERVICE AND ALL COMPUTER PROGRAMS AND SOFTWARE SPECIFICATIONS USED IN CONNECTION THEREWITH ARE PROVIDED ON AN AS IS, AS AVAILABLE BASIS.  EQUISERVE EXPRESSLY DISCLAIMS ALL WARRANTIES EXCEPT THOSE

 

6



 

EXPRESSLY STATED HEREIN INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.  CUSTOMER HEREBY ACKNOWLEDGES THAT THE DATA ACCESS SERVICE MAY NOT BE OR BECOME AVAILABLE DUE TO ANY NUMBER OF FACTORS INCLUDING WITHOUT LIMITATION PERIODIC SYSTEM MAINTENANCE, SCHEDULED OR UNSCHEDULED, ACTS OF GOD, TECHNICAL FAILURE, TELECOMMUNICATIONS INFRASTRUCTURE OR DELAY OR DISRUPTION ATTRIBUTABLE TO VIRUSES, DENIAL OF SERVICE ATTACKS, INCREASED OR FLUCTUATING DEMAND, AND ACTIONS AND OMISSIONS OF THIRD PARTIES.  THEREFORE EQUISERVE EXPRESSLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY REGARDING SYSTEM AND/OR DATA ACCESS SERVICE AVAILABILITY, ACCESSABILITY, OR PERFORMANCE.

 

Article 4                                                Representations and Warranties of the Fund

 

The Fund represents and warrants to EquiServe that:

 

4.01                            It is a corporation or business trust duly organized and existing and in good standing under the laws of states of Maryland or Delaware.

 

4.02                            It is empowered under applicable laws and by its Articles of Incorporation or Declaration of Trust, as the case may be, and By Laws to enter into and perform this Agreement.

 

4.03                            All corporate proceedings required by said Articles of Incorporation or Declaration of Trust, as the case may be, and By Laws have been taken to authorize it to enter into and perform this Agreement.

 

7



 

4.04                            It is a closed-end, investment company registered under the Investment Company Act of 1940 (“1940 Act”).

 

4.05                            To the extent required by federal securities laws, a registration statement under the Securities Act of 1933, as amended is currently or will be effective and, to the extent required, appropriate state securities law filings have been made with respect to all Shares of the Fund being offered for sale by the Fund.  Information to the contrary will result in immediate notification to EquiServe.

 

Article 5                                                Data Access and Proprietary Information

 

5.01                            ‘The Fund acknowledges that the data bases, computer programs, screen formats, report formats; interactive design techniques, and other proprietary information furnished to the Fund by EquiServe are provided solely in connection with the services rendered under this Agreement and constitute copyrighted trade secrets or proprietary information of substantial value to EquiServe.  Such databases, programs, formats, designs and techniques are collectively referred to below as “Proprietary Information.” The Fund agrees that it shall treat all Proprietary Information as proprietary to EquiServe and further agrees that it shall not divulge any Proprietary Information to any person or organization except as expressly permitted hereunder.  The Fund agrees for itself and its employees and agents:

 

(a)                                   to use such programs and databases (i) solely on the computers of the Fund, and/or the investment adviser and/or sub-adviser to the Fund, or (ii) solely from equipment at the locations agreed to between the Fund and EquiServe and (iii) in accordance with EquiServe’s applicable user documentation;

 

(b)                                  to refrain from copying or duplicating in any way (other than in the normal course of performing processing on the computers of the Fund, and/or the investment adviser and/or sub-adviser to the Fund) any part of any Proprietary information;

 

8



 

(c)                                   to refrain from obtaining unauthorized access to any programs, data or other information not owned by the Fund, and if such access is accidentally obtained, to respect and safeguard the same Proprietary Information;

 

(d)                                  to refrain from causing or allowing proprietary information transmitted from EquiServe’s computer to the terminal of the Fund, and/or the investment adviser and/or sub-adviser to the Fund to be retransmitted to any other computer terminal or other device except as expressly permitted by EquiServe, (such permission not to be unreasonably withheld);

 

(e)                                   that the Fund and/or the Fund’s investment adviser and/or sub-adviser shall have access only to those authorized transactions as agreed to between the Fund and EquiServe; and

 

(f)                                     to honor reasonable written requests made by EquiServe to protect at EquiServe’s expense the rights of EquiServe in Proprietary Information at common law and under applicable statutes.

 

5.02                            If the transactions available to the Fund include the ability to originate electronic instructions to EquiServe in order to (i) effect the transfer or movement of cash or Shares or (ii) transmit Shareholder information or other information, then in such event EquiServe shall be entitled to rely on the validity and authenticity of such instruction without undertaking any further inquiry as long as such instruction is undertaken in conformity with security procedures established by EquiServe from time to time.

 

Article 6                                                Indemnification

 

6.01                            EquiServe shall not be responsible for, and the Fund shall indemnify and hold EquiServe harmless from and against, any and all losses, damages, costs, charges, payments, expenses, including reasonable attorneys’ fees, and liability arising out of or attributable to:

 

9



 

(a)           All actions of EquiServe or its agents or subcontractors required to be taken pursuant to this Agreement, provided that such actions are taken in good faith and without negligence or willful misconduct.

 

(b)           The Fund’s lack of good faith, negligence or willful misconduct which arises out of the breach of any representation or warranty of the Fund hereunder.

 

(c)           The reliance on or use by EquiServe or its agents or subcontractors of information, records, documents or services which (i) are received by EquiServe or its agents or subcontractors, and (ii) have been prepared, maintained or performed by the Fund or any other person or firm on behalf of the Fund including but not limited to any previous transfer agent or registrar

 

(d)           The reliance on, or the carrying out by EquiServe or its agents or subcontractors of any instructions or requests of the Fund; provided, however, that such instructions or requests shall be from a person reasonably believed by EquiServe to be (i) an authorized officer of the Fund or (ii) any person, whether or not such person is an officer or employee of the Fund, duly authorized to give instructions on behalf of the Fund as indicated in writing to EquiServe from time to time.

 

(e)           The offer or sale of Shares in violation of any federal or state securities laws requiring that such shares be registered or in violation of any stop order or other determination or ruling by any federal or state agency with respect to the offer or sale of such Shares; and

 

6.02         At any time EquiServe may apply to any officer of the Fund for instructions, and may, with permission from the Fund, consult with legal counsel for the Fund with respect to any matter arising in connection with the services to be performed by EquiServe

 

10



 

under this Agreement, and EquiServe and its agents or subcontractors shall not be liable and shall be indemnified by the Fund for any action taken or omitted by it in reliance upon such instructions or on the opinion of Fund’s counsel.  EquiServe, its agents and subcontractors shall be protected and indemnified in acting upon any paper or document furnished by or on behalf of the Fund, reasonably believed to be genuine and to have been signed by the proper person or persons, or upon any instruction, information, data, records or documents provided EquiServe or its agents or subcontractors by telephone, in person, machine readable input, telex, CRT data entry or other similar means authorized by the Fund, and shall not be held to have notice of any change of authority of any person, until receipt of written notice thereof from the Fund.  EquiServe, its agents and subcontractors shall also be protected and indemnified in recognizing stock certificates which are reasonably believed to bear the proper manual or facsimile signatures of the officers of the Fund, and the proper countersignature of any former transfer agent or former registrar, or of a co-transfer agent or co-registrar.

 

6.03         In order that the indemnification provisions contained in this Article 6 shall apply, upon the assertion of a claim for which the Fund may be required to indemnify EquiServe, EquiServe shall promptly notify the Fund of such assertion, and shall keep the Fund advised with respect to all developments concerning such claim.  The Fund shall have the option to participate with EquiServe in the defense of such claim or to defend against said claim in its own name or in the name of EquiServe.  EquiServe shall in no case confess any claim or make any compromise in any case in which the Fund may be required to indemnify EquiServe except with the Fund’s prior written consent.

 

Article 7                                                Standard of Care

 

7.01         EquiServe shall at all times act in good faith and agrees to use its best efforts within reasonable limits to insure the accuracy of all services performed under this

 

11



 

Agreement, but assumes no responsibility and shall not be liable for loss or damage due to errors unless said errors are caused by its negligence, bad faith, or willful misconduct or that of its employees.

 

Article 8                                                Covenants of the Fund and EquiServe

 

8.01         The Fund shall promptly furnish to EquiServe the following:

 

(a)           A certified copy of the resolution of the Board of Directors, or Trustees, as the case may be, of the Fund authorizing the appointment of EquiServe and the execution and delivery of this Agreement.

 

(b)           A copy of the Articles of Incorporation or Declaration of Trust, as the case may be, and By Laws of the Fund and all amendments thereto.

 

8.02         EquiServe hereby agrees to establish and maintain facilities and procedures reasonably acceptable to the Fund for safekeeping of stock certificates, check forms and facsimile signature imprinting devices, if any; and for the preparation or use, and for keeping account of, such certificates, forms and devices.  EquiServe will comply with all applicable laws and regulations.

 

8.03         EquiServe shall keep records relating to the services to be performed hereunder, in the form and manner as it may deem advisable.  To the extent required by Section 31 of the 1940 Act, as amended, and the Rules thereunder, EquiServe agrees that all such records prepared or maintained by EquiServe relating to the services to be performed by EquiServe hereunder are the property of the Fund and will be preserved, maintained and made available in accordance with such Section and Rules, and will be surrendered promptly to the Fund on and in accordance with its request

 

8.04         EquiServe and the Fund agree that all books, records, information and data pertaining to the business of the other party which are exchanged or received pursuant to the

 

12



 

negotiation or the carrying out of this Agreement shall remain confidential, and shall not be voluntarily disclosed to any other person, except as may be required by law.

 

8.05         In cases of any requests or demands for the inspection of the Shareholder records of the Fund, EquiServe will endeavor to notify the Fund and to secure instructions from an authorized officer of the Fund as to such inspection.  EquiServe reserves the right, however, to exhibit the Shareholder records to any person whenever it is advised by its counsel that it may be held liable for the failure to exhibit the Shareholder records to such person.

 

Article 9                                                Termination of Agreement

 

9.01         This Agreement may be terminated by either party upon ninety (90) days’ written notice to the other.

 

9.02         Should the Fund exercise its right to terminate, all out-of-pocket expenses associated with the movement of records and material will be borne by the Fund, along with a de-conversion fee equivalent to the average of three months’ fees (excludes out-of-pocket expenses listed on invoices).

 

Article 10                                         Assignment

 

10.01       Except as provided in Section 10.03 below, neither this Agreement nor any rights or obligations hereunder may be assigned by either party without the written consent of the other party

 

10.02       This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.

 

Article 11                                         Amendment

 

11.01       This Agreement maybe amended or modified by a written agreement executed by both parties and authorized or approved by a resolution of the Board of Directors or Trustees, as the case may be, of the Fund.

 

13



 

Article 12                                         Massachusetts Law to Apply

 

12.01       This Agreement shall be construed and the provisions thereof interpreted under and in accordance with the laws of the Commonwealth of Massachusetts.

 

Article 13                                         Force Majeure

 

13.01       In the event either party is unable to perform its obligations under the terms of this Agreement because of acts of God, strikes, equipment or transmission failure or damage reasonably beyond its control, or other causes reasonably beyond its control, such party shall not be liable for damages to the other for any damages resulting from such failure to perform or otherwise from such causes.  In any such event, the non-performing party shall be excused from any further performance and observance of the obligations so affected only for so long as such circumstances prevail and such party continues to use commercially reasonable efforts to recommence performance or observance as soon as possible.

 

Article 14                                         Consequential Damages

 

14.01       Neither party to this Agreement shall be liable to the other party for consequential damages under any provision of this Agreement or for any consequential damages arising out of any act or failure to act hereunder.

 

Article 15                                         Merger of Agreement

 

15.01       This Agreement constitutes the entire agreement between the parties hereto and supersedes any prior agreement with respect to the subject hereof whether oral or written.

 

Article 16                                         Survival

 

16.01       All provisions regarding indemnification, warranty, liability and limits thereon, and confidentiality and/or protection of proprietary rights and trade secrets shall survive the termination.

 

14



 

Article 17                                         Severability

 

17.01       If any provision or provisions of this Agreement shall be held to be invalid, unlawful, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

 

Article 18                                         Counterparts

 

18.01       This Agreement may be executed by the parties hereto on any number of counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument.

 

15



 

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be executed in their names and on their behalf by and through their duly authorized officers, as of the day and year first above written.

 

 

Credit Suisse Asset Management Income Fund, Inc.

 

 

By:

/s/ Michael A. Pignataro

 

Name:

Michael A. Pignataro

 

Title:

Chief Financial Officer

 

 

 

EquiServe, Inc.
EquiServe Trust Company, N.A.

 

(on behalf of both entities)

 

By:

/s/ Dennis V. Moccia

 

Name:

Dennis V. Moccia

 

Title:

Managing Director

 

 

16


Exhibit 99.(k)(2)

 

AMENDMENT TO THE
FEE AND SERVICE SCHEDULE
FOR STOCK TRANSFER SERVICES

 

 

between

 

 

CREDIT SUISSE ASSET MANAGEMENT
INCOME FUND, INC.

 

 

and

 

 

EQUISERVE TRUST COMPANY, N.A.

 

 

and

 

 

EQUISERVE, INC.

 



 

AMENDMENT TO THE
FEE AND SERVICE SCHEDULE
FOR STOCK TRANSFER SERVICES

 

between

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

and

 

EQUISERVE, INC.

 

and

 

EQUISERVE TRUST COMPANY, N.A.

 

This is an Amendment to the Fee and Service Schedule between EquiServe Trust Company, N.A. and EquiServe, Inc. (collectively, the “Transfer Agent”) and Credit Suisse Asset Management Income Fund, Inc. (hereinafter referred to as the “Fund”), dated March 1, 2003, whereby the Transfer Agent and the Fund agree to the changes in the following sections of the Fee and Service Schedule:

 

Transfer Agent and Registrar Fee

 

$35,000.00

 

Annual Stock Transfer/Registrar Administrative Fee

 

Direct Stock Purchase Plan (DSPP Services)

 

This section is now deleted from the Fee and Service Schedule.

 

Dividend Reinvestment Plan (DRP) Services

 

This section is now added to the Fee and Service Schedule.

·                   Quarterly reinvestment and monthly cash investment transactions to DRP participant accounts

·                   Preparing and mailing a dividend reinvestment detailed statement with an additional enclosure to each DRP participant

·                   Processing automatic monthly investments via ACH

·                   Preparing and mailing a cash investment detailed statement with an additional enclosure to each DRP participant

·                   Maintaining DRP accounts and establishing new participant accounts

·                   Processing termination and withdrawal requests

·                   Supplying summary reports for each reinvestment/investment to the Fund

·                   Certificate depository

·                   Handling stockholder and Fund inquiries concerning the DRP

 

2



 

·                   Preparing and mailing Form 1099 to participants, including DRP participants and related filings with the IRS

·                   Certificate depository for safekeeping of certificates

·                   Provide Form 1099-B with each sale check to participant

 

3



 

IN WITNESS WHEREOF, the Transfer Agent and the Fund hereto have caused this Amendment to be executed in their names and on their behalf by and through their duly authorized officers, as of this 30 th  day of September, 2003.

 

EquiServe, Inc.

 

Credit Suisse Asset Management Income Fund, Inc.

EquiServe Trust Company,  N.A.

 

 

 

 

 

On Behalf of Both Entities:

 

 

 

 

 

 

 

 

By:

/s/ Dennis V. Moccia

 

By:

/s/ Michael A. Pignataro

Name:

Dennis V. Moccia

 

Name:

Michael A. Pignataro

Title:

Managing Director

 

Title:

Chief Financial Officer

 

4



 

FEE AND SERVICE SCHEDULE
FOR STOCK TRANSFER SERVICES

 

between
CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

and

 

EQUISERVE TRUST COMPANY, N.A

 

and

 

EQUISERVE, INC.

 

TERM

 

This Fee and Service Schedule is by and between, Credit Suisse Asset Management Income Fund, Inc., (“the Fund”) and EquiServe, Inc., and EquiServe Trust Company, N.A. (collectively, “EquiServe”, or individually “EQI” and the “Trust Company”, respectively) whereby EquiServe will perform the following services with respect to the Common Stock or shares of beneficial interest, as the case may be, of the Fund.

 

The term of this Fee and Service Schedule shall be for a period of three (3) years , commencing from March 1, 2003 , the effective date of this Fee and Service Schedule (the “Initial Term”).

 

This Agreement shall be self renewing, and providing that service mix and volumes remain constant, and no other Credit Suisse Fund is merged into the Fund, the final year’s fees listed under the Fees for Standard Services section shall be increased by the accumulated change in the National Employment Cost Index for Service Producing Industries (Finance, Insurance, Real Estate) for the preceding years of the contract, as published by the Bureau of Labor Statistics of the United States Department of Labor.  Fees will be increased on this basis every three years.

 

FEES AND SERVICES

Transfer Agent and Registrar Fee

$38,000.00

 

Annual Stock Transfer/Registrar Administrative Fee (this fee will be reduced to $35,000.00 per year once the Direct Stock Purchase Program cash investment cycle is reduced from weekly to monthly)

 

 

 

 

 

Includes the standard Transfer Agent and Registrar services as stated in the following sections:

 

Administrative Services

·                   Annual administrative services as Transfer Agent and Registrar for the Common Stock or shares of beneficial interest, as the case may be, of the Fund

 

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·                   Remote inquiry access to the Fund records via PC or terminal with telecommunication software

 

Account Maintenance

·                   Maintaining record shareholder accounts to include the following services:

·                   Processing of new shareholder accounts

·                   Posting and acknowledging address changes

·                   Processing other routine file maintenance adjustments

·                   Posting all transactions, including debit and credit certificates to the stockholder file

·                   Researching and responding to all registered shareholder inquiries

·                   Responding to requests for audit confirmations

 

Routine Certificate Issuance

·                   Issuance, cancellation and registration of certificates to include the following services:

·                   Production and mailing of daily transfer reports

·                   Processing of all legal transfers including New York window and mail items

·                   Combining certificates into large and/or smaller denominations

·                   Replacing lost certificates and indemnity bonds

·                   Placing, maintaining and removing stop-transfer notations

 

Annual Meeting Services

·                   Preparing a full stockholder list as of the Annual Meeting Record Date

·                   Addressing proxy cards for all registered shareholders

·                   Enclosing and mailing proxy card, proxy statement, return envelope and Annual Report to all registered shareholders

·                   Receiving, opening and examining returned proxies

·                   Writing in connection with unsigned or improperly executed proxies

·                   Tabulating returned proxies

·                   Provide on-line access to proxy vote status

·                   Attending Annual Meeting as Inspector of Election (Travel expenses billed as incurred)

·                   Preparing a final Annual Meeting List reflecting how each account has voted on each proposal

·                   Interface with outside proxy solicitor

·                   Proxy proof, one (1) per annum

 

Mailing, Reporting and Miscellaneous Services

·                   Mailing of address change confirmation cards to shareholders old address

·                   Coding “multiple” accounts at a single household to suppress duplicate mailings of reports

·                   Providing EquiServe’s toll free number for Shareholder Services

·                   Mailing of the Fund’s Fact Sheet, quarterly

·                   Addressing and enclosing Semi-Annual Reports, two (2) per annum for registered shareholders

 

2



 

·                   Preparing a full Statistical Report to reflect shareholder base by geographic residence code, class code, and share group, one (1) per annum (in addition to the stockholder lists covered under the Annual Meeting Services section)

 

Due Diligence Mailing and Direct Filing of Abandoned Property Services

·                   Preparing and mailing Due Diligence notices to all qualifying shareholder accounts as defined by the State Filing Matrix

·                   Processing returned Due Diligence notices and remitting property to shareholders prior to escheatment

·                   Preparing and filing Preliminary and Final Abandoned Property Reports

·                   Preparing and filing checks for each state covering unclaimed funds per state requirements

·                   Issuing and filing stock certificate(s) registered to the applicable state(s) representing returned (RPO) certificates and underlying share certificates.

·                   Manual input for states requiring electronic reporting via diskette

 

$ 5.00

 

Per Escheated Account, per annum, in Excess of 100

$ 3.00

 

Per account, per annum, for Due Diligence Mailing and Respondent Processing

$ 1.00

 

Per account, per annum, for Electronic Reporting (Via Diskette)

 

Dividend Services

As Dividend Disbursing Agent and Paying Agent, EquiServe, will perform the dividend related services indicated below, pursuant to the following terms and conditions:

 

·                   Checks to be drawn on Fleet National Bank and all funds must be received before or on mailing date 11:00 a.m., Eastern Time via Federal Funds Wire, ACH or Fleet National Bank Demand Deposit Account debit

·                   Preparing and mailing quarterly dividends with an additional enclosure with each dividend check

·                   Preparing a hard copy dividend list as of each dividend record date

·                   Preparing and filing Federal Information Returns (Form 1099) of dividends paid in a year and mailing a statement to each stockholder

·                   Preparing and filing State Information Returns of dividends paid in a year to stockholders resident within such state

·                   Preparing and filing annual withholding return (Form 1042) and payments to the government of income taxes withheld from Non-Resident Aliens

·                   Replacing lost dividend checks

·                   Providing photocopies of cancelled checks when requested

·                   Reconciling paid and outstanding checks

·                   Coding “undeliverable” accounts to suppress mailing dividend checks to same

 

3



 

·                   Processing and recordkeeping of accumulated uncashed dividends

·                   Furnishing requested dividend information to stockholders

·                   Performing the following duties as required by the Interest and Dividend Tax Compliance Act of 1983:

·                   Withholding tax from shareholder accounts not in compliance with the provisions of the Act

·                   Reconciling and reporting taxes withheld, including additional 1099 reporting requirements, to the Internal Revenue Service

·                   Responding to shareholder inquiries regarding the Regulations

·                   Mailing to new accounts who have had taxes withheld, to inform them of procedures to be followed to curtail subsequent back-up withholding

·                   Annual mailing to pre-1984 accounts which have not yet been certified

·                   Performing shareholder file adjustments to reflect certification of accounts

·                   Automated Clearing House crediting of dividends

 

Direct Stock Purchase Plan (DSPP) Services

·                   Reinvestment and/or cash investment transactions of DSPP participant accounts

·                   Preparing and mailing a dividend reinvestment detailed statement (as applicable) with an additional enclosure to each DSPP participant

·                   Preparing and mailing a cash investment detailed statement (as applicable) with an additional enclosure to each DSPP participant

·                   Maintaining DSPP accounts and establishing new participant accounts

·                   Processing sale and termination requests

·                   Processing withdrawal requests

·                   Supplying quarterly summary reports for reinvestment/investment to Customer

·                   Certificate depository for safekeeping of certificates

·                   Handling shareholder inquiries concerning the DSPP

·                   Provide form 1099-B with each sale check to participant

·                   Provide Internet presentation of DSPP materials and Internet fulfillment

·                   Provide telephonic fulfillment of DSPP materials

 

4



 

ITEMS NOT COVERED

 

Additional Services

Items not included in the fees and services set forth in this Fee and Service Schedule including, but not limited to, services associated with the payment of a stock dividend, stock split, corporate reorganization, or any services associated with a special project, are to be billed separately, on an appraisal basis.

 

Services required by legislation or regulatory fiat which become effective after the date of acceptance of this Fee and Service Schedule shall not be a part of the Standard Services and shall be billed by appraisal.  All additional services not specifically covered under this Fee and Service Schedule will be billed by appraisal, as applicable.

 

Billing Definition of Number of Accounts

For billing purposes, the number of accounts will be based on open accounts on file at the beginning of each billing period, plus any new accounts added during that period.

 

ACCEPTANCE

 

In witness whereof, the parties hereto have caused this Fee and Service Schedule to be executed by their respective officers, hereunto duly agreed and authorized, as of the effective date of this Fee and Service Schedule.

 

EquiServe Trust Company, N.A.

 

The Credit Suisse Asset Management Income Fund, Inc.

EquiServe, Inc.

 

 

 

 

 

(on behalf of both entities:)

 

 

 

 

 

 

 

 

By:

/s/  Dennis V. Moccia

 

By:

/s/  Michael A. Pignataro

Name:

Dennis V. Moccia

 

Name:

Michael A. Pignataro

Title:

Managing Director

 

Title:

Chief Financial Officer

 

This Fee and Service Schedule shall serve as an attachment to the Registrar, Transfer Agency and Service Agreement dated March 1, 2003.

 

5



 

EXHIBIT A

 

Out of Pocket Expenses

 

Out of pocket expenses associated with, but not limited to, the following are not included in the fees quoted in this Fee and Service Schedule and are billable as incurred.

 

Postage (Outgoing and Business Reply)

Envelopes

Labels

Forms and Stationery and Proxy Cards

Fulfillment

Proxy Proof Set-up

Record Retention

Insurance Premiums (Mailing certificates)

Delivery and Freight charges (including overnight delivery; Airborne Express, FedEx, etc.)

Typesetting (proxy cards, due diligence mailings, etc.)

Printing (proxy cards, etc.)

Destruction of excess/obsolete material

DTC trade transaction expenses (Treasury buybacks, etc.)

Custody Settlement charges

Telephone usage and line expenses

Lost Shareholder Program database search

 

Please Note:

 

Good funds to cover postage expenses in excess of $10,000 for shareholder mailings must be received in full by 12:00 p.m. Eastern Time on the scheduled mailing date.  Postage expenses less than $10,000 will be billed as incurred.

 

SKU numbers are required on all material received for mailing.  A special handling fee of $10.00 per box will be assessed for all material not marked with a SKU number.  Such material includes, but is not limited to:  proxy statements, annual and quarterly reports, and news releases. Overtime charges will be assessed in the event of services are required to be performed after business hours due to late delivery of material for mailings to shareholders by the Fund unless the mail date is rescheduled.  Exhibit B provides the Specifications for packing and shipping materials to EquiServe.

 

6



 

EXHIBIT B

 

 

SPECIFICATIONS FOR PACKING AND SHIPPING MATERIALS TO EQUISERVE

Revised 1/16/2001

 

Please follow these packing and shipping guidelines to help us handle your materials most efficiently. For specifics concerning your company’s mailing, please contact your client services team.

 

·                   Delivery timing:

Please ship your materials to arrive according to the schedule listed below. Some larger mailings will require more time. If more time is needed, our client service team will work with you to schedule the appropriate amount of time for processing your mailing.

 

1 - 10,000

 

Noon 2 business days prior to the mail date

10,000- 25,000

 

By 5 p.m. 3 business days prior to the mail date

25,000- 50,000

 

By 5 p.m. 4 business days prior to the mail date

50,001 +

 

Acct. Manager will establish delivery schedule with Client and Output Services

 

·                   Shipping addresses:

EquiServe: Raritan Center, 118 Fernwood Avenue, Edison NJ 08837-3857

Output Technology Solutions: Eastern Region, 46 Harvard Street, Westwood MA 02090-2398

Output Technology Solutions: Hartford Region, 125 Ellington Road, So. Windsor CT 06074-4112

CIC: 130 Commerce Road, Carlstadt NJ 07072

Standard Register: Parker Warehouse, 21 Parker Drive, Avon, MA 02322

 

·                   Receiving hours:

Monday through Friday, 8:00a.m. to 4:00p.m.

With advance notice, we offer extended dock hours during proxy season. To arrange extended hours (After 4:00p.m. and weekends) please contact your client services team.

 

·                   Documentation:

Every shipment, including courier deliveries, needs proper documentation.

A delivery receipt and a packing list. Both should include the following information:

1.   Name of client

2.   Description of material

3.   SKU or Form number (see attached)

4.   Total number of boxes/packages delivered

5.   Quantity per box/package

6.   Total number of pieces delivered/volume

7.   Identification of partial shipment

8.   Purchase order number if available

 

7



 

Each box must be marked with the Client Name, Material Description, SKU #, Quantity per box, Box # and Total # of boxes.

*You can prepare one document and make copies to use for both purposes. Attach the packing list to the outside of one box in an envelope or plastic pouch.

 

Packing Pointers:

Do not shrink-wrap materials individually or in bundles. This includes Annual Reports.

Use only paper bands if sending banded material. Please do not use string, strapping or rubber bands.

When bundling or grouping material, please make sure that all pieces in the bundle or group face in the same direction.

Box or package each type of enclosure separately. Do not mix enclosures in cartons.

Label cartons to show the type of material and number of pieces.

Attach a sample of the material to the outside of each carton.

Maximum weight per carton should not exceed 50 lbs.

 

·                   Quarterly Reports, Folded Proxy Statements and Newsletters:

Folded material must be “C” fold or Barrel fold. DO NOT have any enclosure “Z” folded.

Paper-band material in groups of 50 to 100.

Use paper bands that are at least 2 to 3 inches wide.

Place cardboard sheets between each layer.

To eliminate the need for cardboard, you can crisscross the groups of reports or statements.

 

·                   Annual Reports and flat Proxy Statements:

Layer in groups of 50 Annual Reports.

Do not shrink-wrap individual pieces or groups of pieces.

Place cardboard sheets between each layer.

To eliminate the need for cardboard, you can crisscross the groups of reports or statements.

Do not place layers of paper or cardboard between individual reports.

 

·                   Using Skids:

Place only one type of material on each skid.  If you load cartons on a skid, each carton should contain the same number of pieces.

 

Maximum skid size:

 

40” X 48”

Maximum height:

 

54” - including pallet

Maximum weight:

 

3,000 lbs.

 

Pallet must be forklift accessible on the 40” side.

Pallet should be stretch-wrapped to prevent spillage of contents.

 

·                   Using skid packs or Power packs:

Most printers are able to wrap material neatly and securely on skids without using cartons.  We strongly recommend this packing method, especially for clients with shareholder bases of more than 40,000.  Please do not shrink-wrap material in bundles.

 

Skid packs, also known as Power packs or Gaylords, cut expenses and processing time.  Unnecessary cartons cost money, delay processing and must be disposed of for recycling.  Skid packs can be used for nearly any kind of mailing enclosure, including quarterly and annual reports, proxy statements and newsletters.

 

8



 

Using skid packs or Power packs (continued) :

Ship only 90% of your material on skid packs.  Ship the remaining 10% in cartons.  We will use the skid packs first for better inventory control and easier return shipping of leftover material.

 

Have your printer stretch-wrap the cardboard sides of each skid pack for added protection against inclement weather.  (Don’t shrink-wrap individual items or bundles of items.)

 

·                         Surplus Material:   We regret that we do not have warehousing facilities to store surplus material after your mail date.  Please let your client service team know before your mailing whether you would like us to dispose of your material or ship it back at your expense.

Special arrangements can be made by contacting your client services team.

 

SKU NUMBER INFORMATION

 

WHAT IS A SKU NUMBER?

A SKU number is a unique Stock Keeping Unit Number assigned and printed on each different type of material mailed.  It is anticipated that all print vendors will begin incorporating unique and different Stock Keeping Unit Numbers on all material delivered to Print/Mail locations.

 

WHY UTILIZE SKU NUMBERS?

In an effort to continuously improve service to our mutual clients, enhanced quality control practices for inventory tracking purposes have been implemented at Print/Mail locations. Improved client specific inventory tracking is made possible through the identification of a unique stock tracking number by printers.

 

WHO ASSIGNS THE SKU NUMBER?

The recommended SKU Number pattern is as follows: Company number or Issue ID (client identification numbers) followed by the specific material abbreviation, and the current year. This number will be communicated by the client for whom the material is being printed, and assigned by the Account Administrator at EquiServe.  If you need additional information on a SKU Number, please contact the Account Administrator at EquiServe at (781) 575-2000.

 

Sample SKU Number Patterns:

The ABC Company 2000 Annual Report “0707-AR-01”

 

XYZ Financial 2000 Proxy Statement “XYZCM-PS-01”

 

ARE THERE SPECIFIC LIMITATIONS AND PRINTING CONSIDERATIONS? YES!

 

·       Character limitation of 15 spaces.

·       Dashes recommended (to better separate key information).

·       Each dash represents a character limitation.

·       Position of number:

Booklet style material ; reverse side of document, lower right corner.

One page material ; front of document, lower right corner.

 

9


Exhibit 99.(k)(3)

 

 

 

AMENDMENT TO THE
FEE AND SERVICE SCHEDULE
FOR STOCK TRANSFER SERVICES

 

between

 

CREDIT SUISSE ASSET MANAGEMENT
INCOME FUND, INC.

 

and

 

EQUISERVE TRUST COMPANY, N.A.

 

and

 

EQUISERVE, INC.

 



 

AMENDMENT TO THE
FEE AND SERVICE SCHEDULE
FOR STOCK TRANSFER SERVICES

 

between

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

and

 

EQUISERVE, INC.

 

and

 

EQUISERVE TRUST COMPANY, N.A.

 

This is an Amendment to the Fee and Service Schedule between EquiServe Trust Company, N.A. and EquiServe, Inc. (collectively, the “Transfer Agent”) and Credit Suisse Asset Management Income Fund, Inc. (hereinafter referred to as the “Fund”), dated March 1, 2003, whereby the Transfer Agent and the Fund agree to the changes in the following sections of the Fee and Service Schedule:

 

Transfer Agent and Registrar Fee

 

$35,000.00                                           Annual Stock Transfer/Registrar Administrative Fee

 

Direct Stock Purchase Plan (DSPP Services)

 

This section is now deleted from the Fee and Service Schedule.

 

Dividend Reinvestment Plan (DRP) Services

 

This section is now added to the Fee and Service Schedule.

 

·                   Quarterly reinvestment and monthly cash investment transactions to DRP participant accounts

 

·                   Preparing and mailing a dividend reinvestment detailed statement with an additional enclosure to each DRP participant

 

·                   Processing automatic monthly investments via ACH

 

·                   Preparing and mailing a cash investment detailed statement with an additional enclosure to each DRP participant

 

·                   Maintaining DRP accounts and establishing new participant accounts

 

·                   Processing termination and withdrawal requests

 



 

·                   Supplying summary reports for each reinvestment/investment to the Fund

 

·                   Certificate depository

 

·                   Handling stockholder and Fund inquiries concerning the DRP

 

·                   Preparing and mailing Form 1099 to participants, including DRP participants and related filings with the IRS

 

·                   Certificate depository for safekeeping of certificates

 

·                   Provide Form 1099-B with each sale check to participant

 



 

IN WITNESS WHEREOF , the Transfer Agent and the Fund hereto have caused this Amendment to be executed in their names and on their behalf by and through their duly authorized officers, as of this 30th day of September, 2003.

 

EquiServe, Inc.

 

 

EquiServe Trust Company, N.A.

 

Credit Suisse Asset Management Income Fund, Inc.

 

 

 

On Behalf of Both Entities:

 

 

 

 

 

By:

/s/ Dennis V. Moccia

 

By:

/s/ Michael A. Pignataro

Name:

Dennis V. Moccia

 

Name:

Michael A. Pignataro

Title:

Managing Director

 

Title:

Chief Financial Officer

 



 

FEE AND SERVICE SCHEDULE
FOR STOCK TRANSFER SERVICES

 

between

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

 

and

 

EQUISERVE TRUST COMPANY, N.A

 

and

 

EQUISERVE, INC.

 

TERM

 

This Fee and Service Schedule is by and between, Credit Suisse Asset Management Income Fund, Inc., (“the Fund”) and EquiServe, Inc., and EquiServe Trust Company, N.A. (collectively, “EquiServe”, or individually “EQI” and the “Trust Company”, respectively) whereby EquiServe will perform the following services with respect to the Common Stock or shares of beneficial interest, as the case may be, of the Fund.

 

The term of this Fee and Service Schedule shall be for a period of three (3) years , commencing from March 1, 2003 , the effective date of this Fee and Service Schedule (the “Initial Term”).

 

This Agreement shall be self renewing, and providing that service mix and volumes remain constant, and no other Credit Suisse Fund is merged into the Fund, the final year’s fees listed under the Fees for Standard Services section shall be increased by the accumulated change in the National Employment Cost Index for Service Producing Industries (Finance, Insurance, Real Estate) for the preceding years of the contract, as published by the Bureau of Labor Statistics of the United States Department of Labor.  Fees will be increased on this basis every three years.

 

FEES AND SERVICES

 

Transfer Agent and Registrar Fee

 

$38,000.00

 

Annual Stock Transfer/Registrar Administrative Fee (this fee will be reduced to $35,000.00 per year once the Direct Stock Purchase Program cash investment cycle is reduced from weekly to monthly)

 

Includes the standard Transfer Agent and Registrar services as stated in the following sections:

 

Administrative Services

 

·                   Annual administrative services as Transfer Agent and Registrar for the Common Stock or shares of beneficial interest, as the case may be, of the Fund

 

1



 

·                   Remote inquiry access to the Fund records via PC or terminal with telecommunication software

 

Account Maintenance

 

·                   Maintaining record shareholder accounts to include the following services:

 

·                   Processing of new shareholder accounts

 

·                   Posting and acknowledging address changes

 

·                   Processing other routine file maintenance adjustments

 

·                   Posting all transactions, including debit and credit certificates to the stockholder file

 

·                   Researching and responding to all registered shareholder inquiries

 

·                   Responding to requests for audit confirmations

 

Routine Certificate Issuance

 

·                   Issuance, cancellation and registration of certificates to include the following services:

 

·                   Production and mailing of daily transfer reports

 

·                   Processing of all legal transfers including New York window and mail items

 

·                   Combining certificates into large and/or smaller denominations

 

·                   Replacing lost certificates and indemnity bonds

 

·                   Placing, maintaining and removing stop-transfer notations

 

Annual Meeting Services

 

·                   Preparing a full stockholder list as of the Annual Meeting Record Date

 

·                   Addressing proxy cards for all registered shareholders

 

·                   Enclosing and mailing proxy card, proxy statement, return envelope and Annual Report to all registered shareholders

 

·                   Receiving, opening and examining returned proxies

 

·                   Writing in connection with unsigned or improperly executed proxies

 

·                   Tabulating returned proxies

 

2



 

·                   Provide on-line access to proxy vote status

 

·                   Attending Annual Meeting as Inspector of Election (Travel expenses billed as incurred)

 

·                   Preparing a final Annual Meeting List reflecting how each account has voted on each proposal

 

·                   Interface with outside proxy solicitor

 

·                   Proxy proof, one (1) per annum

 

Mailing, Reporting and Miscellaneous Services

 

·                   Mailing of address change confirmation cards to shareholders old address

 

·                   Coding “multiple” accounts at a single household to suppress duplicate mailings of reports

 

·                   Providing EquiServe’s toll free number for Shareholder Services

 

·                   Mailing of the Fund’s Fact Sheet, quarterly

 

·                   Addressing and enclosing Semi-Annual Reports, two (2) per annum for registered shareholders

 

·                   Preparing a full Statistical Report to reflect shareholder base by geographic residence code, class code, and share group, one (1) per annum (in addition to the stockholder lists covered under the Annual Meeting Services section)

 

Due Diligence Mailing and Direct Filing of Abandoned Property Services

 

·                   Preparing and mailing Due Diligence notices to all qualifying shareholder accounts as defined by the State Filing Matrix

 

·                   Processing returned Due Diligence notices and remitting property to shareholders prior to escheatment

 

·                   Preparing and filing Preliminary and Final Abandoned Property Reports

 

·                   Preparing and filing checks for each state covering unclaimed funds per state requirements

 

·                   Issuing and filing stock certificate(s) registered to the applicable state(s) representing returned (RPO) certificates and underlying share certificates.

 

·                   Manual input for states requiring electronic reporting via diskette

 

3



 

 

 $ 5.00

Per Escheated Account, per annum, in Excess of 100

 

 

 $ 3.00

Per account, per annum, for Due Diligence Mailing and Respondent Processing

 

 

 $ 1.00

Per account, per annum, for Electronic Reporting (Via Diskette)

 

Dividend Services

 

As Dividend Disbursing Agent and Paying Agent, EquiServe, will perform the dividend related services indicated below, pursuant to the following terms and conditions:

 

·                   Checks to be drawn on Fleet National Bank and all funds must be received before or on mailing date 11:00 a.m., Eastern Time via Federal Funds Wire, ACH or Fleet National Bank Demand Deposit Account debit

 

·                   Preparing and mailing quarterly dividends with an additional enclosure with each dividend check

 

·                   Preparing a hard copy dividend list as of each dividend record date

 

·                   Preparing and filing Federal Information Returns (Form 1099) of dividends paid in a year and mailing a statement to each stockholder

 

·                   Preparing and filing State Information Returns of dividends paid in a year to stockholders resident within such state

 

·                   Preparing and filing annual withholding return (Form 1042) and payments to the government of income taxes withheld from Non-Resident Aliens

 

·                   Replacing lost dividend checks

 

·                   Providing photocopies of cancelled checks when requested

 

·                   Reconciling paid and outstanding checks

 

·                   Coding “undeliverable” accounts to suppress mailing dividend checks to same

 

·                   Processing and recordkeeping of accumulated uncashed dividends

 

·                   Furnishing requested dividend information to stockholders

 

·                   Performing the following duties as required by the Interest and Dividend Tax Compliance Act of 1983:

 

4



 

·                   Withholding tax from shareholder accounts not in compliance with the provisions of the Act

 

·                   Reconciling and reporting taxes withheld, including additional 1099 reporting requirements, to the Internal Revenue Service

 

·                   Responding to shareholder inquiries regarding the Regulations

 

·                   Mailing to new accounts who have had taxes withheld, to inform them of procedures to be followed to curtail subsequent back-up withholding

 

·                   Annual mailing to pre-1984 accounts which have not yet been certified

 

·                   Performing shareholder file adjustments to reflect certification of accounts

 

·                   Automated Clearing House crediting of dividends

 

Direct Stock Purchase Plan (DSPP) Services

 

·                   Reinvestment and/or cash investment transactions of DSPP participant accounts

 

·                   Preparing and mailing a dividend reinvestment detailed statement (as applicable) with an additional enclosure to each DSPP participant

 

·                   Preparing and mailing a cash investment detailed statement (as applicable) with an additional enclosure to each DSPP participant

 

·                   Maintaining DSPP accounts and establishing new participant accounts

 

·                   Processing sale and termination requests

 

·                   Processing withdrawal requests

 

·                   Supplying quarterly summary reports for reinvestment/investment to Customer

 

·                   Certificate depository for safekeeping of certificates

 

·                   Handling shareholder inquiries concerning the DSPP

 

·                   Provide form 1099-B with each sale check to participant

 

·                   Provide Internet presentation of DSPP materials and Internet fulfillment

 

·                   Provide telephonic fulfillment of DSPP materials

 

5



 

ITEMS NOT COVERED

 

Additional Services

 

Items not included in the fees and services set forth in this Fee and Service Schedule including, but not limited to, services associated with the payment of a stock dividend, stock split, corporate reorganization, or any services associated with a special project, are to be billed separately, on an appraisal basis.

 

Services required by legislation or regulatory fiat which become effective after the date of acceptance of this Fee and Service Schedule shall not be a part of the Standard Services and shall be billed by appraisal.  All additional services not specifically covered under this Fee and Service Schedule will be billed by appraisal, as applicable.

 

Billing Definition of Number of Accounts

 

For billing purposes, the number of accounts will be based on open accounts on file at the beginning of each billing period, plus any new accounts added during that period.

 

ACCEPTANCE

 

In witness whereof, the parties hereto have caused this Fee and Service Schedule to be executed by their respective officers, hereunto duly agreed and authorized, as of the effective date of this Fee and Service Schedule.

 

EquiServe Trust Company, N.A.

EquiServe, Inc.

 

The Credit Suisse Asset Management Income Fund, Inc.

 

 

 

(on behalf of both entities)

 

 

 

 

 

By:

/s/ Dennis V. Moccia

 

By:

/s/ Michael A. Pignataro

Name:

Dennis V. Moccia

 

Name:

Michael A. Pignataro

Title:

Managing Director

 

Title:

Chief Financial Officer

 

This Fee and Service Schedule shall serve as an attachment to the Registrar, Transfer Agency and Service Agreement dated March 1, 2003.

 

6



 

Exhibit A

 

Out of Pocket Expenses

 

Out of pocket expenses associated with, but not limited to, the following are not included in the fees quoted in this Fee and Service Schedule and are billable as incurred.

 

Postage (Outgoing and Business Reply)

Envelopes

Labels

Forms and Stationery and Proxy Cards

Fulfillment

Proxy Proof Set-up

Record Retention

Insurance Premiums (Mailing certificates)

Delivery and Freight charges (including overnight delivery; Airborne Express, FedEx, etc.) Typesetting (proxy cards, due diligence mailings, etc.)

Printing (proxy cards, etc.)

Destruction of excess/obsolete material

DTC trade transaction expenses (Treasury buybacks, etc.)

Custody Settlement charges

Telephone usage and line expenses

Lost Shareholder Program database search

 

Please Note:

 

Good funds to cover postage expenses in excess of $10,000 for shareholder mailings must be received in full by 12:00 p.m. Eastern Time on the scheduled mailing date.  Postage expenses less than $10,000 will be billed as incurred.

 

SKU numbers are required on all material received for mailing.  A special handling fee of $10.00 per box will be assessed for all material not marked with a SKU number.  Such material includes, but is not limited to: proxy statements, annual and quarterly reports, and news releases.  Overtime charges will be assessed in the event of services are required to be performed after-business hours due to late delivery of material for mailings to shareholders by the Fund unless the mail date is rescheduled.  Exhibit B provides the Specifications for packing and shipping materials to EquiServe.

 

7



 

Exhibit B

 

 

SPECIFICATIONS FOR PACKING AND SHIPPING MATERIALS TO EQUISERVE
Revised 1/16/2001

 

Please follow these packing and shipping guidelines to help us handle your materials most efficiently.  For specifics concerning your company’s mailing, please contact your client services team.

 

·                   Delivery timing:

 

Please ship your materials to arrive according to the schedule listed below.  Some larger mailings will require more time.  If more time is needed, our client service team will work with you to schedule the appropriate amount of time for processing your mailing.

 

1 – 10,000

 

Noon 2 business days prior to the mail date

10,000 – 25,000

 

By 5 p.m. 3 business days prior to the mail date

25,000 – 50,000

 

By 5 p.m. 4 business days prior to the mail date

50,001 +

 

Acct. Manager will establish delivery schedule with Client and Output Services

 

·                   Shipping addresses:

 

EquiServe:  Raritan Center, 118 Fernwood Avenue, Edison NJ 08837-3857

 

Output Technology Solutions:   Eastern Region, 46 Harvard Street, Westwood MA 02090- 2398

 

Output Technology Solutions:   Hartford Region, 125 Ellington Road, So. Windsor CT 06074- 4112

 

CIC:   130 Commerce Road, Carlstadt NJ 07072

 

Standard Register:   Parker Warehouse, 21 Parker Drive, Avon, MA 02322

 

·                   Receiving hours:

 

Monday through Friday, 8:00a.m. to 4:00 p.m.

 

With advance notice, we offer extended dock hours during proxy season.  To arrange extended hours (After 4:00 p.m. and weekends) please contact your client services team.

 

·                   Documentation:

 

Every shipment, including courier deliveries, needs proper documentation.

 

8



 

A delivery receipt and a packing list.  Both should include the following information:

 

1.               Name of client

2.               Description of material

3.               SKU or Form number (see attached)

4.               Total number of boxes/packages delivered

5.               Quantity per box/package

6.               Total number of pieces delivered/volume

7.               Identification of partial shipment

8.               Purchase order number if available

 

Each box must be marked with the Client Name, Material Description, SKU #, Quantity per box, Box # and Total # of boxes.

 

*You can prepare one document and make copies to use for both purposes.  Attach the packing list to the outside of one box in an envelope or plastic pouch.

 

Packing Pointers:

 

Do not shrink-wrap materials individually or in bundles.  This includes Annual Reports.

 

Use only paper bands if sending banded material.  Please do not use string, strapping or rubber bands.

 

When bundling or grouping material, please make sure that all pieces in the bundle or group face in the same direction.

 

Box or package each type of enclosure separately.  Do not mix enclosures in cartons.

 

Label cartons to show the type of material and number of pieces.

 

Attach a sample of the material to the outside of each carton.

 

Maximum weight per carton should not exceed 50 lbs.

 

·                   Quarterly Reports, Folded Proxy Statements and Newsletters:

 

Folded material must be “C” fold or Barrel fold.  DO NOT have any enclosure “Z” folded.

 

Paper-band material in groups of 50 to 100.

 

Use paper bands that are at least 2 ‘A to 3 inches wide.

 

Place cardboard sheets between each layer.

 

To eliminate the need for cardboard, you can crisscross the groups of reports or statements.

 

·                   Annual Reports and flat Proxy Statements:

 

Layer in groups of 50 Annual Reports.

 

9



 

Do not shrink-wrap individual pieces or groups of pieces.

 

Place cardboard sheets between each layer.

 

To eliminate the need for cardboard, you can crisscross the groups of reports or statements.

 

Do not place layers of paper or cardboard between individual reports.

 

·                   Using Skids:

 

Place only one type of material on each skid.  If you load cartons on a skid, each carton should contain the same number of pieces.

 

Maximum skid size:

40” x 48”

Maximum height:

54” – including pallet

Maximum weight:

3,000 lbs.

 

Pallet must be forklift accessible on the 40” side.

 

Pallet should be stretch-wrapped to prevent spillage of contents.

 

·                   Using skid packs or Power packs:

 

Most printers are able to wrap material neatly and securely on skids without using cartons.  We strongly recommend this packing method, especially for clients with shareholder bases of more than 40,000.  Please do not shrink-wrap material in bundles.

 

Skid packs, also known as Power packs or Gaylords, cut expenses and processing time.  Unnecessary cartons cost money, delay processing and must be disposed of for recycling.  Skid packs can be used for nearly any kind of mailing enclosure, including quarterly and annual reports, proxy statements and newsletters.

 

Ship only 90% of your material on skid packs.  Ship the remaining 10% in cartons.  We will use the skid packs first for better inventory control and easier return shipping of leftover material.

 

Have your printer stretch-wrap the cardboard sides of each skid pack for added protection against inclement weather.  (Don’t shrink-wrap individual items or bundles of items.)

 

·                   Surplus Material:   We regret that we do not have warehousing facilities to store surplus material after your mail date.  Please let your client service team know before your mailing whether you would like us to dispose of your material or ship it back at your expense.

 

Special arrangements can be made by contacting your client services team.

 

10



 

SKU NUMBER INFORMATION

 

WHAT IS A SKU NUMBER?

 

A SKU number is a unique Stock Keeping Unit Number assigned and printed on each different type of material mailed.  It is anticipated that all print vendors will begin incorporating unique and different Stock Keeping Unit Numbers on all material delivered to Print/Mail locations.

 

WHY UTILIZE SKU NUMBERS?

 

In an effort to continuously improve service to our mutual clients, enhanced quality control practices for inventory tracking purposes have been implemented at Print/Mail locations.  Improved client specific inventory tracking is made possible through the identification of a unique stock tracking number by printers.

 

WHO ASSIGNS THE SKU NUMBER?

 

The recommended SKU Number pattern is as follows: Company number or Issue ID (client identification numbers) followed by the specific material abbreviation, and the current year.  This number will be communicated by the client for whom the material is being printed, and assigned by the Account Administrator at EquiServe.  If you need additional information on a SKU Number, please contact the Account Administrator at EquiServe at (781) 575-2000.

 

Sample SKU Number Patterns:

The ABC Company 2000 Annual Report               “0707-AR-01”

XYZ Financial 2000 Proxy Statement “XYZCM-PS-01”

 

ARE THERE SPECIFIC LIMITATIONS AND PRINTING CONSIDERATIONS? YES!

 

·                   Character limitation of 15 spaces.

·                   Dashes recommended (to better separate key information).

·                   Each dash represents a character limitation.

·                   Position of number:

 

Booklet style material ; reverse side of document, lower right corner.

One page material ; front of document, lower right corner.

 

11



 

FEE AND SERVICE SCHEDULE FOR STOCK TRANSFER SERVICES

 

between

 

EACH OF THE CREDIT SUISSE ASSET MANAGEMENT CLOSED END INVESTMENT COMPANIES

 

and

 

COMPUTERSHARE INC.

 

and

 

COMPUTERSHARE TRUST COMPANY, N.A.

 

This Fee and Service Schedule (“Schedule”) is by and between, (“the Fund”) and Computershare Inc. (“Computershare”) (formerly known as EquiServe, Inc.) and Computershare Trust Company, N.A. (the “Trust Company”), (formerly known as EquiServe Trust Company, N.A.) (collectively, “Transfer Agent”) and Each of the Credit Suisse Asset Management Closed End Investment Companies, listed on Exhibit B (the “Company”), whereby the Transfer Agent will perform the following services for the Company.  This Fee and Service Schedule is an attachment to the Agreement.  Terms used, but not otherwise defined in this Schedule, shall have the same meaning as those terms in the Agreement.

 

TERM

 

The fees set forth in this Schedule shall be effective for a period of three (3) years , commencing from the effective date of January 1, 2011 (the “Initial Term”).  Sixty (60) days before the expiration of the Initial Term or a Renewal Term, whichever is applicable, the parties to this Agreement will agree upon a Fee Schedule for the upcoming Renewal Term.  If no new fee schedule is agreed upon, provided that service mix and volumes remain constant, the fees listed in the Schedule shall be increased (a) by the accumulated change in the National Employment Cost Index for Service Producing Industries (Finance, Insurance, Real Estate) for the preceding years of the contract, as published by the Bureau of Labor Statistics of the United States Department of Labor; or (b) to the Transfer Agent’s minimum fees then in effect, whichever is greater.  Fees will be increased on this basis for each successive Renewal Term.

 

FEES

 

Ongoing Account Management*

 

This fee covers all administration of the services listed in the services section except as noted below.  Out of pocket costs associated with providing these services will be charged separately.

 

$35,000.00* Annual Stock Transfer/Registrar Fee for - Credit Suisse Asset Management Income Fund Inc.

 

$19,000.00* Annual Stock Transfer/Registrar Fee for - Credit Suisse High Yield Bond Fund

 

1



 


* If the average volume of transactions, inquiries, or telephone calls significantly increases during the term of this Agreement as a result of outside factors or unforeseen circumstances for which the Transfer Agent is not the proximate cause, the Transfer Agent and the Company shall negotiate an additional fee.

 

Lost Owner/Shareholder Search Services

 

·                   SEC Electronic Database Search                                                                                                                                                                       $2.00 per account searched

 

SERVICES

 

Administrative Services (per fund)

 

·                   Annual administrative services as Transfer Agent and Registrar for the common stock or shares of beneficial interest, as the case may be, of the Fund

 

·                   Assignment of relationship manager

 

Account Maintenance (per fund)

 

·                   Maintain registered Shareholder accounts to include the following services:

 

·                   Create new Shareholder accounts

 

·                   Post and acknowledge address changes

 

·                   Process other routine file maintenance adjustments

 

·                   Post all transactions, including debit and credit certificates, to the Shareholder file

 

·                   Respond to requests for audit confirmations

 

·                   Perform OFAC (Office of Foreign Asset Control) and Patriot Act reporting

 

·                   Obtain tax certifications

 

Share Issuance (per fund)

 

·                   Issue, cancel and register Shares

 

·                   Process all legal transfers as appropriate

 

·                   Combine certificates into larger and/or smaller denominations

 

·                   Replace lost, stolen or destroyed certificates in accordance with UCC guidelines and Transfer Agent policy (subject to Shareholder-paid fee and bond premium)

 

·                   Place, maintain and remove stop-transfer notations

 

2



 

Shareholder Communications (per fund)

 

·                   Provide Company-specific Shareholder contact number

 

·                   Provide IVR 24/7 (subject to system maintenance)

 

·                   Respond to Shareholder inquiries (written, e-mail and web)

 

·                   Record all Shareholder calls

 

·                   Scan and image incoming correspondence from Shareholders

 

Direct Registration System (“DRS”) (per fund)

 

·                   Register, issue and transfer DRS book-entry Shares

 

·                   Issue DRS statements of holding

 

·                   Provide Shareholders with the ability to sell Shares through the IVR, telephone, mail or Internet, either via a batch order or a market order transaction in accordance with the terms and conditions, including applicable fees, of the DRS Sales Facility

 

·                   Process sales requests within the appropriate timeframe based on the type of service requested, in accordance with the terms of the DRS sales facility

 

·                   Coordinate the issuance, payment and reconcilement for any proceeds stemming from the use of the DRS sales facility, in accordance with the terms and conditions of the facility

 

·                   Coordinate the mailing of advices to Shareholders

 

·                   Accept and deposit certificated Shares into a DRS position

 

Online Access (per fund)

 

·                   Provide availability to “Issuer Online,” which provides access to Company and Shareholder information administered by Transfer Agent, which permits data management including accessing standard reports such as Top 10 - 200 Shareholder lists, submitting real-time inquiries such as an issued capital query, and reporting by holding range

 

·                   Provide availability to “Investor Centre,” which provides Shareholder account information, transaction capabilities, and downloadable forms and FAQs

 

·                   Provide On-Demand Reporting to allow Company to generate non-standard reports 24/7 at Transfer Agent’s standard fee for such reports

 

3



 

Dividend Services (per fund)

 

·                   Receive full funding one day prior to payable date by 11:00 a.m., Eastern Standard Time via Federal Funds Wire, ACH or Demand Deposit Account debit

 

·                   Coordinate the mailing of quarterly dividends with an additional enclosure with each dividend check

 

·                   Prepare and file Federal Information Returns (Form 1099) of dividends paid in a year

 

·                   Prepare and file State Information Returns of dividends paid in a year to Shareholders resident within such state

 

·                   Prepare and file annual withholding return (Form 1042) and payments to the government of income taxes withheld from Non-Resident Aliens

 

·                   Coordinate the mailing of Form 1099 to Shareholders

 

·                   Coordinate the email notification to Shareholders of the online availability of Form 1099

 

·                   Replace lost dividend checks

 

·                   Reconcile paid and outstanding checks

 

·                   Code “undeliverable” accounts to suppress mailing dividend checks to same

 

·                   Keep records of accumulated uncashed dividends

 

·                   Perform the following duties as required by the Interest and Dividend Tax Compliance Act of 1983:

 

·                   Withhold tax from Shareholder accounts not in compliance with the provisions of the Act

 

·                   Reconcile and report taxes withheld, including additional 1099 reporting requirements, to the Internal Revenue Service

 

·                   Mail to new accounts who have had taxes withheld, to inform them of procedures to be followed to curtail subsequent back-up withholding

 

·                   Perform Shareholder file adjustments to reflect certification of accounts

 

ACH services (per fund)

 

·                   Review cards for accuracy and completeness and identifying cards with incomplete information

 

·                   Mail cure letter to Shareholders with incomplete cards

 

4



 

·                   Identify cards received after the cut-off date

 

·                   Code accounts for ACH and performing pre-note test

 

·                   Identify rejected ACH transmissions, mail dividend check and explanation letter to Shareholders with rejected transmissions

 

·                   Respond to Shareholder inquiries concerning the ACH Program

 

·                   Code cards received after cut-off date

 

·                   Calculate on a quarterly basis the Share breakdown for ACH vs. other dividend payments and notifying the Company of funding amount for ACH transmissions and other payable date funds

 

·                   Credit ACH designated bank accounts automatically on dividend payable date

 

·                   Maintenance of ACH participant file, including coding new ACH accounts

 

·                   Process termination requests

 

·                   Keep adequate records including retention of authorization cards

 

International Currency Exchange Services (per fund)

 

·                   Allow Shareholders to elect to receive sale proceeds and dividend payments in foreign currencies (subject to certain geographic restrictions) by check or by electronic funds transfer in accordance with Transfer Agent’s guidelines (fees paid by Shareholders)

 

Annual Meeting Services (per fund)

 

·                   Prepare a full Shareholder list as of the Annual Meeting Record Date

 

·                   Address proxy cards for all registered Shareholders

 

·                   Coordinate the mailing of the proxy card, proxy statement, return envelope and Annual Report to all registered Shareholders

 

·                   Receive, open and examine returned proxies

 

·                   Tabulate returned proxies

 

·                   Provide on-line access to proxy vote status

 

·                   Attend Annual Meeting as Inspector of Election (travel expenses billed as incurred)

 

·                   Prepare a final Annual Meeting list reflecting how each account has voted on each proposal

 

5



 

Additional Annual Meeting Services (SUBJECT TO ADDITIONAL FEES) (per fund)

 

·                   Electronic delivery of proxy material

 

·                   Accept and load other related proxy files, 401K, ESPP and other stock issues not on our recordkeeping system

 

·                   Match load related proxy files to registered Shareholder base to eliminate duplicate mailings

 

·                   Provide householding of materials to the same address

 

·                   Provide Internet and telephone voting

 

·                   Provide 5er/ices related to notice and access requirements including web hosting of materials, notice only mailings, and mixed mailings.

 

·                   Provide proxy solicitation services by Georgeson

 

·                   Broker search and beneficial or “street holder” distribution

 

·                   Provide financial printing of 10ks, proxy statements and other related documents

 

Direct Filing of Abandoned Property (per fund)

 

·                   Coordinate the mailing of due diligence notices to all qualifying Shareholder accounts as defined by the state filing matrix

 

·                   Process returned Due Diligence notices and remitting property to Shareholders prior to escheatment

 

·                   Prepare and file Preliminary and Final Abandoned Property Reports

 

·                   Prepare and file checks for each state covering unclaimed funds as per state requirements

 

·                   Issue and file stock certificate(s) registered to the applicable state(s) representing returned (RPO) certificates and underlying Share positions

 

·                   Retain, as required by law or otherwise, records of property escheated to the states and responding, after appropriate research, to Shareholder inquiries relating to same

 

Lost Owner/Shareholder Search Services (per fund)

 

·                   Perform electronic database searches in accordance with SEC requirements

 

·                   Update new addresses provided by search firm

 

·                   Send verification form to Shareholder to validate address

 

6



 

·                   Reissue abandoned property held to Shareholders upon receipt of signed verification form

 

Additional Services

 

Items not included in the fees and services set forth in this Schedule include, but are not limited to, services associated with the payment of a stock dividend, stock split, corporate reorganization, unvested stock program, DWAC services provided to broker dealers, audit services, services provided to a vendor of the Company, or any services associated with a special project, and are to be billed separately, on an appraisal basis.

 

Services required by legislation or regulatory fiat which become effective after the date of acceptance of this Schedule shall not be a part of the Standard Services and shall be billed by appraisal.  All additional services not specifically covered under this Schedule will be billed by appraisal, as applicable.

 

Billing Definition of Number of Accounts

 

For billing purposes, the number of accounts will be based on open accounts on file at the beginning of each billing period, plus any new accounts added during that period.  An open account shall mean the account of each Shareholder which account shall hold any full or fractional Shares of stock held by such Shareholder, outstanding funds, or reportable tax information,

 

Out-of-Pocket Expenses

 

In addition to the fees above, the Company agrees W reimburse the Transfer Agent for out-of-pocket expenses, including but not limited to postage, forms, telephone, taxes, records storage, exchange and broker fees, or advances incurred by the Transfer Agent for the items set out in Exhibit A attached hereto.  In addition, any other expenses incurred by the Transfer Agent at the request Or with the consent of the Company, will be reimbursed by the Company.

 

Bank Accounts

 

The Company acknowledges that the bank accounts maintained by Computershare in connection with the services hereunder will be in its name and that Computershare may receive investment earnings in connection with the investment at Computershare’s risk and for its benefit of funds held in those accounts from time to time.

 

7



 

ACCEPTANCE

 

In witness whereof, the parties hereto have caused this Fee and Service Schedule to be executed by their respective officers, hereunto duly agreed and authorized, as of the effective date of this Fee and Service Schedule.

 

Computershare Inc.
Computershare Trust Company, N. A.

 

Each of the Credit Suisse Asset Management Closed End Investment Companies Listed on Exhibit B

 

 

 

 

 

 

On Behalf of Both Entities:

 

 

 

 

 

By:

/s/ Dennis Moccia

 

By:

/s/ Michael A. Pignataro

 

 

 

 

 

Name:

Dennis V. Moccia

 

Name:

Michael A. Pignataro

 

 

 

 

 

Title:

Manager, Contract Administration

 

Title:

Chief Financial Officer 12/10/10

 

8



 

Exhibit A
Out of Pocket Expenses

 

Out of pocket expenses associated with, but not limited to, the following are not included in the fees quoted in this Fee end service Schedule and are billable as incurred.

 

·                   Postage (outgoing and business reply)

 

·                   Envelopes

 

·                   Forms and stationery

 

·                   Printing

 

·                   Enclosing (proxy cards, dividend checks, etc.)

 

·                   Fulfillment (transfer packages, new account packages, DRIP enrollment packages)

 

·                   Proxy proof set-up

 

·                   Record retention

 

·                   Insurance premiums (mailing certificates)

 

·                   Delivery and freight charges (including overnight delivery; Airborne Express, FedEx, etc.)

 

·                   Destruction of excess/obsolete material

 

·                   Telephone usage and line expenses

 

·                   Regulatory reports

 

·                   NCOA searches

 

Please Note:

 

Good funds to cover postage expenses in excess of $10,000 for Shareholder mailings must be received in full by 12:00 p.m. Eastern time on the scheduled mailing date.  Postage expenses less than $10,000 will be billed as incurred,

 

Overtime charges will be assessed in the event of a late delivery to the Transfer Agent of Company material for mailings to Shareholders, unless the mail date is rescheduled.  Such material includes, but is not limited to, proxy statements, quarterly and annual reports and news releases.

 

9



 

EXHIBIT B

 

 

Credit Suisse Asset Management Income Fund Inc.
Credit Suisse High Yield Bond Fund

 

10


Exhibit 99.(k)(6)

 

AMENDMENT NO. 2 TO ADMINISTRATION AGREEMENT

 

AMENDMENT No. 2 (this “Amendment”), made as of this 9th day of October 2012, to the Administration Agreement (as amended, restated, supplemented or otherwise modified and in effect from time to time, the “Agreement”) dated as of as of June 7, 2002 by and between State Street Bank and Trust Company, a Massachusetts trust company (the “Administrator”), and Credit Suisse High Yield Bond Fund (the “Fund”).  Defined terms used herein shall have the same meaning as set forth in the Agreement.

 

WHEREAS, the Fund is registered as a closed-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”);

 

WHEREAS, the Administrator and the Fund have entered into the Agreement by which the Administrator provides certain administrative services to the Fund; and

 

WHEREAS, the Fund and the Administrator wish to amend the Agreement as more fully set forth in this Amendment to add another closed-end management investment company under the 1940 Act as a party to the Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

 

1.                                        Definitions .  All capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Agreement.

 

2.                                        Amendment .  Section 1 of the Agreement is hereby amended by inserting the following new paragraph immediately after the paragraph contained therein:

 

In the event that other closed end management investment companies that are advised by Credit Suisse Asset Management, LLC wish to retain the Administrator to act as administrator hereunder with respect to such additional funds (“Additional Funds”) , the Administrator shall be notified in writing by the Additional Fund.  Upon written acceptance by the Administrator, such Additional Fund shall become subject to the provisions of this Agreement to the same extent as the existing Fund(s), except to the extent that such provisions (including those relating to the compensation and expenses payable by the Fund(s)) may be modified with respect to each Additional Fund in writing by the Additional Fund and the Administrator at the time of the addition of the Additional Fund.

 

3.                                        Additional Fund .  The Agreement is further amended, supplemented and modified as follows:

 

The Credit Suisse Asset Management Income Fund, Inc. (the “New Fund”), in accordance with Section 1, the Additional Funds provision, of the Agreement, wishes to retain the Administrator to act as administrator under the Agreement with respect to the New Fund, effective as of November 19, 2007.  In connection with such request, each of the

 



 

Funds hereby confirms to you, as of the date hereof, its representations and warranties set forth in Section 4 of the Agreement.

 

A new Schedule A shall be annexed to the Agreement in the form annexed hereto and each Fund listed on such Schedule A from time to time shall be subject to the terms and conditions of the Agreement.

 

4.                                        All other terms and conditions of the Agreement, as amended, remain in full force and effect.

 

[ Remainder of page intentionally left blank .]

 

2



 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the date first written above.

 

 

CREDIT SUISSE HIGH YIELD BOND FUND

 

 

 

By:

/s/Karen Regan

 

Name:

Karen Regan

 

Title:

Senior Vice President and Secretary

 

 

 

 

 

 

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC

 

 

 

By:

/s/Karen Regan

 

Name:

Karen Regan

 

Title:

Senior Vice President and Secretary

 

 

 

 

 

 

 

STATE STREET BANK AND TRUST COMPANY

 

 

 

By:

/s/Michael F. Rogers

 

Name:

Michael F. Rogers

 

Title:

Executive Vice President

 

3



 

SCHEDULE A

Dated as of October 9, 2012

 

Credit Suisse High Yield Bond Fund

Credit Suisse Asset Management Income Fund, Inc.

 

4


Exhibit 99.(s)

 

CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.

(A registered investment company)

 

POWER OF ATTORNEY

 

Each of the undersigned hereby authorizes Karen Regan and John G. Popp, each with full power to act without the other, as attorney-in-fact to sign on his or her behalf in the capacities indicated, and to file (or have filed) with all exhibits thereto a registration statement on Form N-2 (including amendments thereto) with respect to Credit Suisse Asset Management Income Fund, Inc. (the “Fund”).

 

This power shall be valid as to each of the undersigned until superseded by a subsequent power of attorney or revoked by written notice delivered to the President or Secretary of the Fund, such subsequent power or revocation to be effective for each signatory on an individual basis.

 

IN WITNESS WHEREOF, each of the undersigned has executed this instrument on the date shown.

 

 

By:

/s/Steven N. Rappaport

 

10/17/12

 

Steven N. Rappaport

 

Date

 

Director and Chairman of the Board

 

 

 

 

 

 

 

 

By:

/s/Terry F. Bovarnick

 

10/18/12

 

Terry F. Bovarnick

 

Date

 

Director

 

 

 

 

 

 

 

By:

/s/James Cattano

 

10/19/12

 

James Cattano

 

Date

 

Director

 

 

 

 

 

 

 

 

By:

/s/Lawrence J. Fox

 

10/17/12

 

Lawrence J. Fox

 

Date

 

Director

 

 

 

 

 

 

 

 

By:

/s/Enrique R. Arzac

 

10/23/12

 

Enrique R. Arzac

 

Date

 

Director