sc13d

DATED: May 8, 2008

/s/ Clifford D. Corso

Clifford D. Corso

Vice President

0000893220-08-001404.txt : 20080508 0000893220-08-001404.hdr.sgml : 20080508 20080508152221 ACCESSION NUMBER: 0000893220-08-001404 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20080508 DATE AS OF CHANGE: 20080508 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: RIVUS BOND FUND CENTRAL INDEX KEY: 0000030125 IRS NUMBER: 231745238 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-62407 FILM NUMBER: 08813706 BUSINESS ADDRESS: STREET 1: 113 KING STREET CITY: ARMONK STATE: NY ZIP: 10508 BUSINESS PHONE: 9142734545 MAIL ADDRESS: STREET 1: 113 KING STREET CITY: ARMONK STATE: NY ZIP: 10508 FORMER COMPANY: FORMER CONFORMED NAME: 1838 BOND DEBENTURE TRADING FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: DREXEL BOND DEBENTURE TRADING FUND DATE OF NAME CHANGE: 19890511 FORMER COMPANY: FORMER CONFORMED NAME: DREXEL INCOME SECURITIES INC DATE OF NAME CHANGE: 19711102 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MBIA INC CENTRAL INDEX KEY: 0000814585 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [6351] IRS NUMBER: 061185706 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 113 KING ST CITY: ARMONK STATE: NY ZIP: 10504 BUSINESS PHONE: 914-273-4545 MAIL ADDRESS: STREET 1: 113 KING ST CITY: ARMONK STATE: NY ZIP: 10504 SC 13D 1 w57750sc13d.htm SCHEDULE 13D sc13d

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 13D

UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. __)*

RIVUS BOND FUND

(Name of Issuer)

Shares of Beneficial Interest

(Title of Class of Securities)

769667106

(CUSIP Number)

ROBERT B. MURPHY, ESQ.
PEPPER HAMILTON LLP
600 FOURTEENTH ST., N.W.
WASHINGTON, D.C. 20005-2004
Fax: 202-318-6224
Direct Dial: 202-220-1454

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

April 28, 2008

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-l(b)(3) or (4), check the following box. o

NOTE: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-l(a) for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).


SCHEDULE 13D
CUSIP No.		769667106

NAME OF REPORTING PERSON MBIA Inc.

S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON 06-1185706

CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP

(a) o

(b) o

SEC USE ONLY

SOURCE OF FUNDS

CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

CITIZENSHIP OR PLACE OF ORIGINATION

State of Connecticut

SOLE VOTING POWER

NUMBER OF

293,300 shares of Beneficial Interest

SHARED VOTING POWER

BENEFICIALLY

OWNED BY

None.

EACH

SOLE DISPOSITIVE POWER

REPORTING

PERSON

293,300 shares of Beneficial Interest

WITH

SHARED DISPOSITIVE POWER

None.

AGGREGATED AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

293,300 shares of Beneficial Interest

CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

5.98%

TYPE OF REPORTING PERSON

IC, HC

TABLE OF CONTENTS


	Item 1. Security and Issuer
	Item 2. Identity and Background
	Item 3. Source and Amount of Funds or Other Consideration
	Item 4. Purpose of Transaction
	Item 5. Interest in Securities of the Issuer
	Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
	Item 7. Materials to be filed as Exhibits
SIGNATURES

SCHEDULE 13D

CUSIP NO. 769667106

Item 1. Security and Issuer.

This Schedule relates to the acquisition (the “Acquisition”) of shares (the “Shares”) of the class of beneficial interest (the “Beneficial Interests”) of Rivus Bond Fund, a Delaware Statutory Trust (the “Issuer”). The principal executive offices of the Issuer are located at 113 King Street, Armonk, NY 10504.

Item 2. Identity and Background.

	(a)	This statement is filed by MBIA Inc., a Connecticut corporation (the “Reporting Person”). The Reporting Person is the indirect parent
of MBIA Capital Management Corp., a registered investment adviser under the Investment Company Act of 1940 and investment adviser to the Issuer.

	(b)	The principal address of the Reporting Person is 113 King Street, Armonk, NY 10504.

	(c)	The principal business of the Reporting Person is the provision of financial guarantee insurance and other forms of credit protection as
well as investment management services to public finance and structured finance issuers, investors and capital market participants on a global basis.

	(d)	The Reporting Person has not been convicted in a criminal proceeding during the last five years.

	(e)	The Reporting Person has been a party, during the last five years, to a civil proceeding or a judicial administrative body of competent
jurisdiction which resulted in its being subjected to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

In November 2004, the Reporting Person received identical document subpoenas from the Securities and Exchange Commission (“SEC”) and the New York Attorney General’s Office (“NYAG”) requesting information with respect to non-traditional or loss mitigation insurance products developed, offered or sold by the Reporting Person to third parties from January 1, 1998 to the present. While the subpoenas did not identify any specific transaction, subsequent conversations with the SEC and the NYAG revealed that the investigation included the arrangements entered into by its wholly owned subsidiary MBIA Insurance Corporation (“MBIA Corp.”) in 1998 in connection with the bankruptcy of the Delaware Valley Obligated Group, an entity that is part of Allegheny Health, Education and Research Foundation (“AHERF”).

On March 9, 2005, the Reporting Person received a subpoena from the U.S. Attorney’s Office for the Southern District of New York (“U.S. Attorney”) seeking information related to the agreements it entered into in connection with the AHERF loss. Thereafter, the Reporting Person has received additional subpoenas, substantively identical to each other, and additional informal requests, from the SEC and the NYAG for documents and other information.

On August 19, 2005, the Reporting Person received a “Wells Notice” from the SEC indicating that the staff of the SEC is considering recommending that the SEC bring a civil injunctive action against the Reporting Person alleging violations of federal securities laws “arising from the Reporting Person’s action to retroactively reinsure losses it incurred from the AHERF bonds the Reporting Person had guaranteed, including, but not limited to, its entering into excess of loss agreements and quota share agreements with three separate counterparties.”

On January 29, 2007, the Reporting Person announced that it and its principal operating subsidiary MBIA Corp. (together with the Reporting Person, the “Companies”) had concluded civil settlements with the SEC, the NYAG, and the New York State Insurance Department (“NYSID”) with respect to transactions entered into by the Companies in 1998 following defaults on insured bonds issued by AHERF.

The terms of the settlements, under which the Companies neither admit nor deny wrongdoing, include: (i) A restatement, which was completed and reported in the Reporting Person’s third quarter 2005 earnings release, of the Reporting Person’s GAAP and statutory financial results for 1998 and subsequent years related to the agreements with AXA Re Finance S.A. and Muenchener Rueckversicherungs-Gesellshaft, as discussed in “Note 2: Restatement Of Consolidated Financial Statements” in the Notes to Consolidated Financial Statements of the Reporting Person and Subsidiaries included in the Reporting Person’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (the “2005 10-K”) in Part II, Item 8 and “Restatement of Consolidated Financial Statements” in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 in the 2005 10-K; (ii) Payment of penalties and disgorgement totaling $75 million, of which $60 million will be distributed to shareholders of the Reporting Person pursuant to the Fair Fund provisions of the Sarbanes-Oxley Act of 2002 and $15 million will be paid to the State of New York. the Reporting Person accounted for the $75 million in penalties and disgorgement as a charge in the third quarter of 2005; (iii) The Companies’ consent to a cease and desist order with respect to future violations of securities laws; (iv) A report by the Reporting Person’s independent auditors, PricewaterhouseCoopers, to the Reporting Person’s Board of Directors, the SEC staff, the NYAG and the NYSID concerning the Reporting Person’s accounting for and disclosure of advisory fees and the assets of certain conduits; and (v) retention of an Independent Consultant to review and report to the SEC, the NYAG and the NYSID on the evaluation previously undertaken at the direction of the Audit Committee of the Reporting Person’s Board of Directors by Promontory Financial Group LLC of the Reporting Person’s controls, policies and procedures with respect to compliance, internal audit, governance, risk management and records management; the Reporting Person’s implementation of Promontory’s recommendations; the Reporting Person’s accounting for and disclosure of its investment in Capital Asset Holdings GP, Inc.; and the Reporting Person’s accounting for and disclosure of its exposure to the US Airways 1998-1 Repackaging Trust and any other transaction in which the Reporting Person paid or acquired all or substantially all of an issue of insured securities other than as a result of a claim under the related policy.

The foregoing summary description of the terms of the settlements is qualified in its entirety by reference to Exhibits 10.82-10.85 filed in the Reporting Person’s Current Report on Form 8-K filed with the SEC on January 31, 2007.

On July 25, 2007, the Reporting Person announced that the Independent Consultant retained by the Reporting Person in connection with the regulatory settlements completed his review. The Independent Consultant concluded that the Reporting Person’s accounting and disclosures concerning these matters were consistent with GAAP and the federal securities laws. The Independent Consultant also reported to the SEC, the NYAG and the NYSID on the evaluation previously undertaken at the direction of the Audit Committee of the Reporting Person’s board of directors by Promontory Financial Group LLC. Promontory’s review included a comprehensive assessment of the Reporting Person’s compliance organization and monitoring systems, internal audit functions, governance process and other controls, including risk management and records management policies and procedures. The Independent Consultant examined the design of Promontory’s review and the Reporting Person’s implementation of Promontory’s recommendations. The Independent Consultant found that both the Promontory review and the Reporting Person’s implementation of Promontory’s recommendations were reasonable and concluded that no further changes or improvements to the Reporting Person’s policies and procedures were necessary to achieve best practices.

The Independent Consultant reported his findings to the SEC, the NYAG and the NYSID, and to the Reporting Person’s board of directors. The regulatory agencies have now completed their review of the Independent Consultant’s report. The Reporting Person does not expect any further enforcement actions in connection with the matters covered by the Independent Consultant’s report.

The Reporting Person has received subpoenas or informal inquiries from a variety of regulators, including the SEC, the Securities Division of the Secretary of the Commonwealth of Massachusetts, and other states’ regulatory authorities, regarding a variety of subjects, including disclosures made by the Reporting Person to underwriters and issuers of certain bonds, the Warburg Pincus transaction, the Reporting Person’s announcement of preliminary loss reserve estimates on December 10, 2007 related to the Reporting Person’s residential mortgage-backed securities exposure, and disclosures regarding the Reporting Person’s CDO exposure, the Reporting Person’s communications with rating agencies, and the methodologies used by rating agencies for determining the credit rating of municipal debt. The Reporting Person is cooperating fully with each of these regulators and is in the

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process of satisfying all such requests. The Reporting Person may receive additional inquiries from these or other regulators and expects to provide additional information to such regulators in response to any inquiries with respect to these or other matters in the future.

(f)

The Reporting Person is a Connecticut corporation located in the State of New York.

Item 3. Source and Amount of Funds or Other Consideration.

All of the funds associated with the Acquisition, as discussed below by the Reporting Person were from the working capital of the Reporting Person. The amount of funds concerned in the acquisition of such securities as of the date of this report, totals approximately $5,129,638, of which $5,144,303 was the cost of the securities and $14,665 was the brokerage commission paid for the purchase of the securities.

Item 4. Purpose of Transaction.

The Reporting Person acquired the Shares for investment purposes in consideration of the future prospects of the Issuer as an effective long-term fixed-income vehicle providing consistent dividend income. In addition to its belief in the Issuer and its management, the Reporting Person believes that the Acquisition will more closely align its interests with those of the Issuer’s shareholders. In addition the Reporting Person wishes to demonstrate its confidence in and commitment to the Issuer and its shareholders in light of a potential shareholder competing solicitation, as previously reported by the Issuer.

The Reporting Persons may acquire additional shares of Beneficial Interest, or dispose of the Shares, from time to time, in open market or privately negotiated transactions. In addition, the Reporting Person has been offered an opportunity to acquire shares of Beneficial Interest from a third party. While the Reporting Person has not entered into any agreements in this regard, it reserves the right to do so and to engage in discussions with respect to such opportunities at any time. Except as set forth above, the Reporting Person has no plans or proposals with respect to any of the matters set forth in paragraphs (a) through (j) of Item 4 of Schedule 13D.

Item 5. Interest in Securities of the Issuer.

(a) The Reporting Person beneficially owns 293,300 shares of Beneficial Interest, constituting approximately 5.98% of the outstanding class of Beneficial Interest (computed on the basis of 4,907,678 shares of Beneficial Interest outstanding as of December 31, 2007 as reported in the semi-annual report to shareholders).

(b) The Reporting Person owns 293,300 shares of Beneficial Interest and has sole voting and dispositive power for all such shares.

(c) During the past sixty days, the Reporting Person has purchased a total of 293,300 shares of Beneficial Interest on the open market.

(d) Not applicable.

(e) Not applicable.

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

The Reporting Person is the indirect parent of MBIA Capital Management Corp., which serves as the Issuer’s investment adviser pursuant to an investment advisory agreement dated June 30, 2006.

Item 7. Materials to be filed as Exhibits

(a) Investment Advisory Agreement by and between the MBIA Capital Management Corp. and Issuer dated June 30, 2006 is attached hereto as Exhibit 1.

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SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, the undersigned certifies that the information set forth in the Statement is true, correct and complete.

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EX-1 2 w57750exv1.htm RIVUS BOND FUND INVESTMENT ADVISORY AGREEMENT exv1

EXHIBIT 1

RIVUS BOND FUND

INVESTMENT ADVISORY AGREEMENT

AGREEMENT, made by and between RIVUS BOND FUND, a Delaware statutory trust (hereinafter called the “Fund”), and MBIA Capital Management Corp., a Delaware corporation (hereinafter called the “Investment Adviser”).

W I T N E S S E T H:

WHEREAS, the Fund has been organized and operates as an investment company registered under the Investment Company Act of 1940 (the “1940 Act”) and engages in the business of investing and reinvesting its assets in securities, and the Investment Adviser is a registered Investment Adviser under the Investment Advisers Act of 1940 (the “Advisers Act”) and engages in the business of providing investment management services; and

WHEREAS, the Fund has selected the Investment Adviser to serve as the investment adviser for the Fund; and

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and each of the parties hereto intending to be legally bound, it is agreed as follows:

1. The Fund hereby employs the Investment Adviser to manage the investment and reinvestment of the Fund’s assets and to administer its affairs, subject to the direction of the Board of Directors and officers of the Fund for the period and on the terms hereinafter set forth. The Investment Adviser hereby accepts such employment and agrees during such period to render the services and assume the obligations herein set forth for the compensation herein provided. The Investment Adviser shall, for all purposes herein, be deemed to be an independent contractor, and shall, unless otherwise expressly provided and authorized, have no authority to act for or to represent the Fund in any way, or in any way be deemed an agent of the Fund. The Investment Adviser shall regularly make decisions as to what securities to purchase and sell on behalf of the Fund and shall record and implement such decisions and shall furnish the Board of Directors of the Fund with such information and reports regarding the Fund’s investments as the Investment Adviser deems appropriate or as the Directors of the Fund may reasonably request. Subject to compliance with the requirements of the 1940 Act, the Investment Adviser may

retain as a sub-adviser to the Fund, at the Investment Adviser’s own expense, any investment adviser registered under the Advisers Act.

2. The Fund shall conduct its own business and affairs and shall bear the expenses and salaries necessary and incidental thereto including, but not in limitation of the foregoing, the costs incurred in: the maintenance of its corporate existence; the maintenance of its own books, records and procedures; dealing with its own shareholders; the payment of dividends; transfer of stock, including issuance, redemption and repurchase of shares; preparation of share certificates; reports and notices to shareholders; calling and holding of shareholders’ meetings; miscellaneous office expenses; brokerage commissions; custodian fees; legal and accounting fees; and taxes. Officers and employees of the Investment Adviser may be trustees, directors, officers and employees of the funds of which the Investment Adviser serves as investment adviser. Officers and employees of the Investment Adviser who are directors, officers and/or employees of the Fund shall not receive any compensation from the Fund for acting in such dual capacity.

In the conduct of the respective businesses of the parties hereto and in the performance of this Agreement, the Fund and Investment Adviser may share facilities common to each, with appropriate proration of expenses between them.

3. (a) The Investment Adviser shall place and execute Fund orders for the purchase and sale of portfolio securities with broker-dealers. Subject to the primary objective of obtaining the best available prices and execution, the Investment Adviser will place orders for the purchase and sale of portfolio securities for the Fund with such broker-dealers as it may select from time to time, including brokers who provide statistical, factual and financial information and services to the Fund, to the Investment Adviser, or to any other fund for which the Investment Adviser provides investment advisory services. Broker-dealers who sell shares of the funds of which the Investment Adviser is investment adviser shall only receive orders for the purchase or sale of portfolio securities to the extent that the placing of such orders is in compliance with the Rules of the Securities and Exchange Commission and National Association of Securities Dealers, Inc.

(b) Notwithstanding the provisions of subparagraph (a) above and subject to such policies and procedures as may be adopted by the Board of Directors and officers of the Fund, the Investment Adviser is authorized to pay a member of an exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of an exchange, broker or dealer

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would have charged for effecting that transaction in such instances where the Investment Adviser has determined in good faith that such amount of commission was reasonable in relation to the value of the brokerage and research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or the Investment Adviser’s overall responsibilities with respect to the Fund and to other funds for which the Investment Adviser exercises investment discretion.

4. As compensation for the services to be rendered to the Fund by the Investment Adviser under the provisions of this Agreement, the Fund shall pay to the Investment Adviser from the Fund’s assets each month an investment advisory fee at the annualized rate of 0.50% of the first $100,000,000 of the net asset value of the Fund on the last day of such month and 0.40% of the net asset value of the Fund on the last day of such month in excess of $100,000,000. The net asset value of the Fund shall be defined as the total assets of the Fund, less its liabilities, and shall be determined in accordance with any instructions of the Board of Directors.

If this Agreement shall become effective subsequent to the first day of the month, or shall terminate before the last day of the month, the Investment Adviser’s compensation for such fraction of the month shall be determined by applying the foregoing percentages to the average of the weekly net asset values of the Fund during such fraction of a month (or if none, to the net asset value of the Fund as calculated on the last day of the preceding month on which the New York Stock Exchange was open for trading) and in the proportion that such fraction of a month bears to the entire month.

If this Agreement is terminated prior to the end of any calendar month, the management fee shall be prorated for the portion of any month in which this Agreement is in effect according to the proportion which the number of calendar days during which the Agreement is in effect bears to the number of calendar days in the month.

5. The services to be rendered by the Investment Adviser to the Fund under the provisions of this Agreement are not to be deemed to be exclusive, and the Investment Adviser shall be free to render similar or different services to others so long as its ability to render the services provided for in this Agreement shall not be impaired thereby.

6. The Investment Adviser, its officers, employees, and agents may engage in other businesses, may render investment advisory services to other investment companies, or to any other corporation, association, firm or individual, and may render underwriting services to the Fund or to any other investment company, corporation, association, firm or individual.

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7. In the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of the performance of duties of the Investment Adviser to the Fund, the Investment Adviser shall not be subject to liabilities to the Fund or to any shareholder of the Fund for any action or omission in the course of, or connected with, rendering services hereunder or for any losses that may be sustained in the purchase, holding or sale of any security, or otherwise.

8. This Agreement shall be executed and become effective as of the date written below. The Agreement will continue in effect for an initial term of two years from the Effective Date (defined below) and may continue thereafter from year to year if specifically approved at least annually by the “vote of a majority of the outstanding voting securities” of the Fund or by the Board and, in either event, by the vote of a majority of the Directors who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for such purpose. No amendment to this Agreement shall be effective unless the terms thereof have been approved by the vote of a majority of Directors of the Fund who are not parties to the Agreement or interested persons of any such party, cast in person at a meeting called for the purpose of voting on such approval. Notwithstanding the foregoing, this Agreement may be terminated by the Fund at any time, without the payment of a penalty, on sixty days’ written notice to the Investment Adviser of the Fund’s intention to do so, pursuant to action by the Board of Directors of the Fund or pursuant to a vote of a majority of the outstanding voting securities of the Fund. The Investment Adviser may terminate this Agreement at any time, without the payment of penalty on sixty days’ written notice to the Fund of its intention to do so. Upon termination of this Agreement, the obligations of all the parties hereunder shall cease and terminate as of the date of such termination, except for any obligation to respond for a breach of this Agreement committed prior to such termination, and except for the obligation of the Fund to pay to the Investment Adviser the fee provided in Paragraph 4 hereof, prorated to the date of termination. This Agreement shall automatically terminate in the event of its assignment.

9. This Agreement shall extend to and bind the heirs, executors, administrators and successors of the parties hereto.

10. For the purposes of this Agreement, the terms “vote of a majority of the outstanding voting securities”; “interested persons”; and “assignment” shall have the meaning defined in the 1940 Act.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed on their behalf by their respective officers thereunto duly authorized all as of October 31, 2005 (the “Effective Date”) and as amended and restated as of June 30, 2006.


				Rivus Bond Fund

		By:		/s/ Clifford Corso

				Clifford Corso
				President

				MBIA Capital Management Corp.

		By:		/s/ Clifford Corso

				Clifford Corso
				President

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