-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FqkCNxeKB02r1dmrS0CboCxuwYrtnbuNW9TdSvuc7jvFLd6g1sDpPl/TJQDJOKEr cu7HYOkQq84Z6XFYQotZQw== 0000908737-04-000667.txt : 20040831 0000908737-04-000667.hdr.sgml : 20040831 20040831173912 ACCESSION NUMBER: 0000908737-04-000667 CONFORMED SUBMISSION TYPE: SC TO-I PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 20040831 DATE AS OF CHANGE: 20040831 GROUP MEMBERS: HYPERION STRATEGIC BOND FUND, INC. SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: HYPERION STRATEGIC BOND FUND INC CENTRAL INDEX KEY: 0001000401 IRS NUMBER: 133910721 STATE OF INCORPORATION: MD FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC TO-I SEC ACT: 1934 Act SEC FILE NUMBER: 005-58843 FILM NUMBER: 041009369 BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLAZA STREET 2: 165 BROADWAY, 36TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10006-1404 BUSINESS PHONE: 2125498400 MAIL ADDRESS: STREET 1: ONE LIBERTY PLAZA STREET 2: 165 BROADWAY, 36TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10006-1404 FORMER COMPANY: FORMER CONFORMED NAME: HYPERION HIGH YIELD CMBS FUND INC DATE OF NAME CHANGE: 20000512 FORMER COMPANY: FORMER CONFORMED NAME: EQUITABLE REAL ESTATE HYPERION HIGH YLD CMMERCL MORTG FD INC DATE OF NAME CHANGE: 19950912 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HYPERION STRATEGIC BOND FUND INC CENTRAL INDEX KEY: 0001000401 IRS NUMBER: 133910721 STATE OF INCORPORATION: MD FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC TO-I BUSINESS ADDRESS: STREET 1: ONE LIBERTY PLAZA STREET 2: 165 BROADWAY, 36TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10006-1404 BUSINESS PHONE: 2125498400 MAIL ADDRESS: STREET 1: ONE LIBERTY PLAZA STREET 2: 165 BROADWAY, 36TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10006-1404 FORMER COMPANY: FORMER CONFORMED NAME: HYPERION HIGH YIELD CMBS FUND INC DATE OF NAME CHANGE: 20000512 FORMER COMPANY: FORMER CONFORMED NAME: EQUITABLE REAL ESTATE HYPERION HIGH YLD CMMERCL MORTG FD INC DATE OF NAME CHANGE: 19950912 SC TO-I 1 schto.txt AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 31, 2004 INVESTMENT COMPANY ACT FILE NO. 811-07359 --------------------------------------------------------------------------- U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE TO ISSUER TENDER OFFER STATEMENT (Under Section 13(e)(1) of the Securities Exchange Act of 1934) (Amendment No. ___) HYPERION STRATEGIC BOND FUND, INC. (Name of Issuer and Person Filing Statement) Shares of Common Stock, Par Value $.001 per share (Title of Class of Securities) N/A (CUSIP Number of Class of Securities) JOHN H. DOLAN, PRESIDENT HYPERION STRATEGIC BOND FUND, INC. ONE LIBERTY PLAZA, 165 BROADWAY, 36th FLOOR NEW YORK, NY 10006-1404 1-800-HYPERION (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of Person Filing Statement) With copies to: DAVID C. MAHAFFEY SULLIVAN & WORCESTER LLP 1666 K STREET, N.W. WASHINGTON, D.C. 20006 CALCULATION OF FILING FEE --------------------------------------------------------------------------- Transaction Valuation: $2,000,000* Amount of Filing Fee: $400** --------------------------------------------------------------------------- * Calculated as the aggregate maximum purchase price to be paid for (i) 292,825 shares in the offer, based upon the net asset value per share ($6.83) on July 30, 2004. ** Calculated as 1/50th of 1% of the Transaction Valuation. | | Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. Amount Previously Paid:_______________ Filing Party:__________________ Form or Registration No.:_______________ Date Filed:___________________ | | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. Check the appropriate boxes below to designate any transactions to which the statement relates: | | third-party tender offer subject to Rule 14d-1. |X| issuer tender offer subject to Rule 13e-4. | | going-private transaction subject to Rule 13e-3. | | amendment to Schedule 13D under Rule 13d-2. Check the following box if the filing is a final amendment reporting the results of the tender offer: | | Item 1. Summary Term Sheet. Reference is made to the Summary Term Sheet of the Offer to Purchase that is attached as Exhibit (a)(1)(i) and is incorporated herein by reference. Item 2. Subject Company Information. (a) The name of the issuer is the Hyperion Strategic Bond Fund, Inc. The address and telephone number of its principal offices are One Liberty Plaza, 165 Broadway, 36th Floor, New York, NY 10006-1404. (b) The title of the securities being sought is shares of common stock, par value $.001 per share (the "Shares"), of the Fund. As of July 30, 2004 there were approximately 20,297,543.329 million Shares issued and outstanding. (c) The Shares are not currently traded on an established secondary trading market. Item 3. Identity and Background of Filing Person. The Fund is tendering for its own shares. Item 4. Terms of the Transaction. (a)(1)(i) The Fund is seeking tenders for 292,825 shares of its common stock (the "Offer"). (ii) For each Share tendered, the security holder will receive a cash amount equal to the net asset value per Share (the "NAV") calculated on the day the tender offer terminates, upon the terms and subject to the conditions set forth in the Offer to Purchase dated August 31, 2004 (the "Offer to Purchase"). A copy of the Offer to Purchase and the related Letter of Transmittal is attached hereto as Exhibit (a)(1)(i) and Exhibit (a)(1)(ii), respectively. Reference is hereby made to the cover page and Section 1 "Price; Number of Shares" of the Offer to Purchase, which are incorporated herein by reference. (iii) The Offer is scheduled to expire on September 30, 2004, unless extended. (iv) Not applicable. (v) Reference is hereby made to Section 1 "Price; Number of Shares" and Section 13 "Extension of Tender Period; Termination; Amendments" of the Offer to Purchase, which are incorporated herein by reference. (vi) Reference is hereby made to Section 3 "Withdrawal Rights" of the Offer to Purchase, which is incorporated herein by reference. (vii) Reference is hereby made to the Cover Page, Section 2 "Procedure for Tendering Shares" and Section 3 "Withdrawal Rights" of the Offer to Purchase, which are incorporated herein by reference. (viii) Reference is hereby made to Section 2 "Procedure for Tendering Shares" of the Offer to Purchase, which is incorporated herein by reference. (ix) Reference is hereby made to the cover page and Section 1 "Price; Number of Shares" of the Offer to Purchase, which are incorporated herein by reference. (x) Reference is hereby made to Section 7 "Certain Effects of the Offer" of the Offer to Purchase, which is incorporated herein by reference. (xi) Reference is hereby made to Section 2 "Procedure for Tendering Shares" and Section 12 "Certain Federal Income Tax Consequences" of the Offer to Purchase, which are incorporated herein by reference. (xii) Reference is hereby made to Section 12 "Certain Federal Income Tax Consequences" of the Offer to Purchase, which is incorporated herein by reference. (2) Not applicable. (b) The Fund has been informed that no Directors, officers or affiliates of the Fund intend to tender Shares pursuant to the Offer. Item 5. Past Contracts, Transactions, Negotiations and Agreements. None. Item 6. Purposes of the Transaction and Plans and Proposals. (a) Reference is hereby made to Section 6 "Purpose of the Offer" of the Offer to Purchase, which is incorporated herein by reference. (b) Reference is hereby made to Section 7 "Certain Effects of the Offer" of the Offer to Purchase, which is incorporated herein by reference. (c)(1) None. (2) None. (3) None. (4) None. (5) None. (6) None. (7) None. (8) None. (9) None. (10) None. Item 7. Source and Amount of Funds or Other Considerations. (a) Reference is hereby made to Section 8 "Source and Amount of Funds" of the Offer to Purchase, which is incorporated herein by reference. (b) None. (d)(1) The Fund has sufficient cash to purchase the tendered shares; however the Fund may borrow all or part of the funds necessary to complete the tender offer by executing a 90 day reverse repurchase agreement between the Fund and Morgan Stanley and Company. The collateral for the agreement would consist of a portion of a Credit Suisse First Boston 2003-C5 A2 bond, and the rate of the agreement would be set at LIBOR plus 10 basis points. (2) The Fund would continue to finance the reverse repurchase agreement, which is consistent with the Fund's investment strategy. Item 8. Interest in Securities of the Subject Company. (a) The Fund does not own any treasury shares. The following executive Officers and Directors currently own shares: Thomas F. Doodian, Treasurer - 35.977 Shares Julie S. Madnick, Portfolio Manager - 35.977 Shares Joseph Tropeano, Secretary - 35.977 Shares Jeffrey C. Williams, Portfolio Manager - 35.976 Shares (b) On July 1, 2004, the Virginia Retirement System purchased 4,016,064.257 Shares at a price of $7.47 per Share. The transaction was effected by wire in New York. Item 9. Persons/Assets Retained, Employed, Compensated or Used. (a) None. (b) None. Item 10. Financial Statements. (a) The Fund's financial statements for the fiscal years ended July 31, 2002 and 2003, have been audited by Schwartz & Hofflich LLP whose reports, along with the Fund's financial statements, are included in the Fund's 2002 and 2003 Annual Reports respectively, which are incorporated herein by reference. The unaudited financial information of the Fund for the six months ended January 31, 2004 is included in the Fund's 2004 Semi-Annual Report, which is incorporated herein by reference. (b) Not applicable. Item 11. Additional Information. (a) None. (b) The offer to Purchase is incorporated herein by reference in its entirety. Item 12. Exhibits. (a)(1)(i) Offer to Purchase. (ii) Form of Letter of Transmittal. (iii) Letter to Stockholders. (iv) Announcement. (2)-(4) Not applicable. (5)(i) Audited Financial Statements of the Fund for the fiscal year ended July 31, 2002.* (ii) Audited Financial Statements of the Fund for the fiscal year ended July 31, 2003.** (iii) Unaudited Financial Statements of the Fund for the six-months ended January 31, 2004.*** (iv) Consent of Schwartz & Hofflich LLP. * Incorporated by reference to the Fund's Annual Report for the fiscal year ended July 31, 2002 on Form N-30D as filed with the Securities and Exchange Commission ("SEC") on September 30, 2002. ** Incorporated by reference to the Fund's Annual Report for the fiscal year ended July 31, 2003 on form N-CSR as filed with the SEC on October 9, 2003. *** Incorporated by reference to the Fund's Semi-Annual Report for the six- months ended January 31, 2004 on Form N-CSRS as filed with the SEC on April 8, 2004. (b) Not applicable. (d) Not applicable. (g) Not applicable. (h) Not applicable. Item 13. Information Required by Schedule 13E-3. Not applicable. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Hyperion Strategic Bond Fund, Inc. By: /s/ John H. Dolan ______________________________ John H. Dolan President August 31, 2004 EXHIBIT INDEX Exhibit (a)(1) (i) Offer to Purchase. (ii) Form of Letter of Transmittal. (iii) Letter to Stockholders. (iv) Announcement. (5) (iv) Consent of Schwartz & Hofflich LLP. EX-99. 2 exha1i.txt - ------------------------------------------------------------------------------- HYPERION STRATEGIC BOND FUND, INC. One Liberty Plaza, 165 Broadway, 36th Floor New York, NY 10006-1404 OFFER TO PURCHASE FOR CASH 292,825 OF ITS ISSUED AND OUTSTANDING SHARES AT NET ASSET VALUE PER SHARE SUMMARY TERM SHEET THIS SUMMARY HIGHLIGHTS CERTAIN INFORMATION IN THIS OFFER TO PURCHASE. TO UNDERSTAND THE OFFER FULLY AND FOR A MORE COMPLETE DESCRIPTION OF THE TERMS OF THE OFFER, YOU SHOULD CAREFULLY READ THIS ENTIRE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL FOR THE FUND. WE HAVE INCLUDED SECTION REFERENCES TO DIRECT YOU TO A MORE COMPLETE DESCRIPTION OF THE TOPICS IN THIS SUMMARY. o WHAT SECURITIES IS HYPERION STRATEGIC BOND FUND, INC. OFFERING TO PURCHASE? Hyperion Strategic Bond Fund, Inc. (the "Fund") is offering to purchase up to 292,825 Shares of its common stock ("Shares") that may be held by you and other stockholders. If more than 292,825 Shares are surrendered (or "tendered") by stockholders in response to this Offer, the Fund expects either to extend its Offer period and increase the number of Shares it is offering to purchase or to purchase the Shares tendered on a pro rata basis. The Offer is not conditioned upon the tender of any minimum number of Shares. See Section 1 "Price; Number of Shares." o HOW DO I TENDER MY SHARES? See Section 2 "Procedure for Tendering Shares." If your Shares are registered in the name of your broker, dealer, commercial bank, trust company or other nominee, you must contact the entity and request that your Shares be tendered to the Fund. If you wish to tender your Shares and your respective Shares are registered in your name, you may send your a properly completed and executed Letter of Transmittal and any additional documents required by the Letter of Transmittal to the Transfer Agent. The Transfer Agent must receive these documents prior to the scheduled expiration of the Offer (currently Thursday, September 30, 2004 at 4:00 p.m. Eastern time). o HOW MUCH IS THE FUND OFFERING TO PAY ME FOR MY SHARES? The Fund will pay you cash in an amount equal to the Fund's net asset value ("NAV") per Share as of the close of business of the New York Stock Exchange on the expiration date (currently Thursday, September 30, 2004). As of July 30, 2004, the Fund's NAV, which fluctuates on a monthly basis, was $6.83 per Share. See Section 1 "Price; Number of Shares." o WILL I HAVE TO PAY ANY FEES OR COMMISSION IF I TENDER MY SHARES? The Fund will not charge you a fee if you tender your Shares. If you tender your Shares through a broker, dealer or other nominee, that broker, dealer or other nominee may charge you a fee for processing the transaction on your behalf. See Section 2 "Procedure for Tendering Shares." o WILL THERE BE ANY TAX CONSEQUENCES TO ME IF I TENDER MY SHARES? If your tendered Shares are accepted, it will be a taxable transaction either in the form of a "sale or exchange" or under certain circumstances as a "dividend." You should consult your tax advisor regarding the tax consequences to you of tendering your Shares. See Section 12 "Certain Federal Income Tax Consequences." o WHEN WILL THE OFFER EXPIRE? HOW WILL I KNOW IF THE OFFERING PERIOD IS EXTENDED OR IF THE OFFER IS TERMINATED? The Offer expires Thursday, September 30, 2004 at 4:00 p.m. Eastern Time, unless the Fund notifies you that it is either extending or terminating its Offer. If the Fund extends its Offer period, the Fund's public announcement will be made not later than 9:00 a.m. on the next business day after the previously scheduled expiration date. See Section 1 "Price; Number of Shares" and Section 13 "Extension of Tender Period; Termination; Amendment." o MAY I WITHDRAW MY TENDERED SHARES? You may withdraw your tendered Shares at any time prior to the expiration date, which, unless extended, is currently Thursday, September 30, 2004 at 4:00 p.m. Eastern Time. Additionally, if the Fund has not yet accepted your tendered Shares for payment, you may withdraw your tendered Shares at any time after October 28, 2004. To withdraw your tendered Shares, you should contact your financial advisor or other nominee, or you should submit proper written notice to the Fund's Transfer Agent. See Section 3 "Withdrawal Rights." o DOES THE FUND HAVE THE FINANCIAL RESOURCES TO PAY ME FOR MY SHARES? The Fund expects to have adequate money to finance the purchase of its tendered Shares. See Section 8 "Source and Amount of Funds." o WHY IS THE FUND MAKING AN OFFER TO PURCHASE SHARES OF ITS COMMON STOCK? No established secondary trading market currently exists for the Fund's Shares. As a result, the Fund's Board of Directors decided to provide liquidity for stockholders by making an Offer. The Fund cannot assure you that you will be provided with sufficient liquidity, or that the Fund will make a similar tender Offer in the future. Neither the Fund nor its Board of Directors makes any recommendation as to whether or not you should tender you Shares. See Section 6 "Purpose of the Offer." o WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER? The Offer is not conditioned upon the tender of any minimum number of Shares. The Fund is not required to accept or pay for any Shares tendered. Under certain circumstances, the Fund may terminate or amend its Offer or postpone the acceptance of the Shares for payment. See Section 5 "Certain Conditions of the Offer." o IF I DECIDE NOT TO TENDER MY SHARES, HOW WILL THE OFFER AFFECT MY SHARES? If you do not tender your Shares, you may be subject to certain risks resulting from the Fund reducing its assets to pay for tendered Shares. These risks include increased volatility in the Fund's NAV and higher expenses. These risks should be reduced to the extent that the Fund sells new Shares. See Section 7 "Certain Effects of the Offer." o WHO SHOULD I CALL IF I NEED MORE INFORMATION? Questions and requests for assistance may be directed to your financial advisor or other nominee, or to the Transfer Agent at the address and telephone number set forth below. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal should be directed to the transfer agent as set forth below. Transfer Agent: American Stock Transfer & Trust 59 Maiden Lane New York, NY 10038 Attn: Hyperion Strategic Bond Fund, Inc. (877) 248-6417 HYPERION STRATEGIC BOND FUND, INC. One Liberty Plaza, 165 Broadway, 36th Floor New York, NY 10006-1404 OFFER TO PURCHASE FOR CASH 292,825 OF ITS ISSUED AND OUTSTANDING SHARES AT NET ASSET VALUE PER SHARE THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE ARE 4:00 P.M., EASTERN TIME, ON THURSDAY, SEPTEMBER 30, 2004, UNLESS EXTENDED. To the Holders of Shares of HYPERION STRATEGIC BOND FUND, INC.: Hyperion Strategic Bond Fund, Inc. (the "Fund") is offering to purchase up to 292,825 of its issued and outstanding shares of common stock, par value $.001 per share (the "Shares"), for cash at a price equal to their net asset value ("NAV") as of the close of business on the New York Stock Exchange on Thursday, September 30, 2004, the Expiration Date, unless extended, upon the terms and conditions set forth in this Offer to Purchase (the "Offer") and the related Letter of Transmittal. The Shares are not currently traded on an established secondary market. The NAV on July 30, 2004 was $6.83 per Share. If more than 292,825 Shares of the Fund are duly tendered prior to the expiration of the Offer, assuming no changes in the factors originally considered by the Fund's Board of Directors when it determined to make the Offer, the Fund will either (1) extend its Offer period, if necessary, and increase the number of Shares that the Fund is offering to purchase to an amount which it believes will be sufficient to accommodate the excess Shares tendered, as well as any Shares tendered during the extended Offer period, or (2) purchase the Shares tendered on a pro rata basis. THE FUND'S OFFER IS BEING MADE TO ALL STOCKHOLDERS OF THE FUND AND IS NOT CONDITIONED UPON ANY MINIMUM NUMBER OF SHARES BEING TENDERED. IMPORTANT If you desire to tender all or any portion of your Shares, you should either (1) request your broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you, or (2) if you own your Shares directly, complete and sign the Fund's Letter of Transmittal and mail or deliver it along with any Share certificate(s) and any other required documents to the Fund's Transfer Agent. If your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such broker, dealer, commercial bank, trust company or other nominee if you desire to tender your Shares. NEITHER THE FUND NOR ITS BOARD OF DIRECTORS, MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM TENDERING SHARES. EACH STOCKHOLDER MUST MAKE HIS OR HER OWN DECISION WHETHER TO TENDER SHARES, AND IF SO, HOW MAY SHARES TO TENDER. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON BEHALF OF THE FUND AS TO WHETHER STOCKHOLDERS SHOULD TENDER SHARES PURSUANT TO THE OFFER. NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN OR IN THE FUND'S LETTER OF TRANSMITTAL. IF GIVEN OR MADE, SUCH RECOMMENDATION AND SUCH INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF SUCH TRANSACTION NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS DOCUMENT. ANY REPRESENTATION TO THE COMPANY IS UNLAWFUL. Questions and requests for assistance may be directed to your financial advisor or other nominee, or to the Transfer Agent at the address and telephone number set forth below. Requests for additional copies of this Offer to Purchase and the Fund's Letter of Transmittal should be directed to the Transfer Agent as set forth below. August 31, 2004 HYPERION STRATEGIC BOND FUND, INC. Transfer Agent: American Stock and Transfer 59 Maiden Lane New York, NY 10038 Attn: Hyperion Strategic Bond Fund, Inc. (877) 248-6417 - ------------------------------------------------------------------------------- TABLE OF CONTENTS Section Page 1. Price; Number of Shares 6 2. Procedure for Tendering Shares 7 3. Withdrawal Rights 8 4. Payment for Shares 9 5. Certain Conditions of the Offer 9 6. Purpose of the Offer 10 7. Certain Effects of the Offer 10 8. Source and Amount of Funds 10 9. Financial Information 10 10. Certain Information About the Fund 11 11. Additional Information 11 12. Certain Federal Income Tax Consequences 11 13. Extension of Tender Period; Termination; Amendments 13 14. Miscellaneous 13 - ------------------------------------------------------------------------------- 1. Price; Number of Shares. The Fund will purchase up to 292,825 of its issued and outstanding Shares which are tendered and not withdrawn prior to 4:00 p.m., Eastern time, on September 30, 2004 (such time and date being hereinafter called the "Initial Expiration Date") unless it determines to accept none of them. The Fund reserves the right to extend its Offer. See Section 13 "Extension of Tender Period; Termination; Amendments." The later of the Initial Expiration Date or the latest time and date to which an Offer is extended is hereinafter called the "Expiration Date." The purchase price of the Fund's Shares will be its NAV as of the close of the New York Stock Exchange on the Expiration Date. The Fund's Offer is being made to all stockholders of the Fund and is not conditioned upon any minimum number of Shares being tendered. If more than 292,825 Shares are duly tendered prior to the expiration of the Offer, assuming no changes in the factors originally considered by the Fund's Board of Directors when it determined to make the Offer, the Fund will either (1) extend its Offer period, if necessary, and increase the number of Shares that the Fund is offering to purchase to an amount which it believes will be sufficient to accommodate the excess Shares tendered as well as any Shares tendered during the extended Offer period, or (2) purchase the Shares on a pro rata basis. As of June 30, 2004 there were approximately 20,297,543.329 million Shares issued and outstanding and there were 111 holders of record of Shares. The Fund has been informed that none of the Directors, officers or affiliates of the Fund intends to tender any Shares pursuant to the Offer. The Fund's Shares are not currently traded on any established secondary market. 2. Procedure for Tendering Shares. In order for you to tender any of your Shares, you may either: (a) request your broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you, in which case a Letter of Transmittal is not required, or (b) if the Shares are registered in your name, send the Transfer Agent, at the address set forth on page 5, any certificate(s) for such Shares, a properly completed and executed Letter of Transmittal for the Fund and any other required documents. Please contact Jennifer Donovan at (877) 248-6417 for any additional document which may be required. A. Procedures for Beneficial Owners Holding Shares Through Brokers or Nominees. If your Shares are registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such broker, dealer, commercial bank, trust company or other nominee if you desire to tender your Shares. You should contact such broker, dealer, commercial bank, trust company or other nominee in sufficient time to permit notification of your desire to tender to reach the Transfer Agent by the Expiration Date. No brokerage commission will be charged on the purchase of Shares by the Fund pursuant to the Offer. However, a broker or dealer may charge a fee for processing the transaction on your behalf. B. Procedures for Registered Stockholders. If you will be mailing or delivering a Letter of Transmittal and any other required documents to the Transfer Agent in order to tender your Shares, they must be received on or prior to the Expiration Date by the Transfer Agent at its address set forth on page 5 of this Offer to Purchase. Signature on a Letter of Transmittal MUST be guaranteed by a member firm of a registered national securities exchange, or a commercial bank or trust company having an office, branch or agency in the United States, the existence and validity of which may be verified by the Transfer Agent through the use of industry publications. Notarized signatures are not sufficient. Payment for Shares tendered and purchased will be made only after receipt by the Transfer Agent on or before the Expiration Date of a properly completed and duly executed Letter of Transmittal and any other required documents. If your Shares are evidenced by certificates, those certificates also must be received by the Transfer Agent on or prior to the Expiration Date. The method of delivery of any documents, including certificates for shares, is at the election and risk of the party tendering the shares. If documents are sent by mail, it is recommended that they sent by registered mail, properly insured, with return receipt requested. C. Determinations of Validity. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tenders will be determined by the Fund, in its sole discretion, whose determination shall be final and binding. The Fund reserves the absolute right to reject any or all tenders determined by it not to be in appropriate form or the acceptance of or payment for which would, in the opinion of counsel for the Fund, be unlawful. The Fund also reserves the absolute right to waive any of the conditions of the Offer or any defect in any tender with respect to any particular Shares or any particular stockholder, and the Fund's interpretations of the terms and conditions of its Offer will be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such times as the Fund shall determine. Tenders will not be deemed to have been made until the defects or irregularities have been cured or waived. Neither the Fund, the administrator for the Fund, Hyperion Capital Management, Inc. ("HCM"), nor the Transfer Agent, nor any other person shall be obligated to give notice of any defects or irregularities, nor shall any of them incur any liability for failure to give such notice. D. Tender Constitutes an Agreement. A tender of Shares made pursuant to any one of the procedures set forth above will constitute an agreement between the tendering stockholder and the Fund in accordance with the terms and subject to the conditions of the applicable Offer. 3. Withdrawal Rights. You may withdraw Shares tendered at any time prior to the Expiration Date and, if the Shares have not been accepted for payment by the Fund, at any time after October 28, 2004. Stockholders whose accounts are maintained through broker, dealer, commercial bank, trust company, or other nominee should notify such nominee prior to the Expiration Date. Stockholders whose accounts are maintained directly through the Transfer Agent should submit written notice to the Transfer Agent. To be effective, any notice of withdrawal must be timely received by the Transfer Agent at the address set forth on page 5 of this Offer to Purchase. Any notice of withdrawal must specify the name of the person having deposited the Shares to be withdrawn, the number of Shares to be withdrawn, and, if any certificate representing such Shares have been delivered or otherwise identified to the Transfer Agent, the name of the registered holder(s) of such Shares as set forth in such certificates and the number of Shares to be withdrawn. If any certificates have been delivered to the Transfer Agent, then, prior to the release of such certificate, you must also submit the certificate numbers shown on the particular certificates evidencing such Shares and the signature on the notice of the withdrawal must be guaranteed by an eligible institution. All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Fund in its sole discretion, whose determination shall be final and binding. Shares properly withdrawn shall not thereafter be deemed to be tendered for purposes of the Offer. However, withdrawn Shares may be tendered by following one of the procedures described in Section 2 "Procedure for Tendering Shares." 4. Payment for Shares. For purposes of its Offer, the Fund will be deemed to have accepted for payment (and thereby purchased) its Shares that are tendered as, if and when it give oral or written notice to the Transfer Agent of its election to purchase such Shares. Payment for Shares will be made promptly by the Transfer Agent to tendering stockholders as directed by the Fund. Any certificates for Shares not purchased (see Section 1 "Price; Number of Shares" and Section 5 "Certain Conditions of the Offer"), or for Shares not tendered included in certificates forwarded to the Transfer Agent, will be returned promptly following the termination, expiration or withdrawal of the relevant Offer, without expense to the tendering stockholder. The Fund will pay all transfer taxes, if any, payable on the transfer to it of its Shares purchased pursuant to its Offer. If any tendered certificates are registered in the name of any person other than the person signing the Letter of Transmittal, the amount of any such transfer taxes (whether imposed on the registered holder or such other person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted. The Fund will not pay any interest on the purchase price under any circumstances. 5. Certain Conditions of the Offer. The Fund shall not be required to accept for payment or pay for any of its Shares tendered, and may terminate or amend its Offer or may postpone the acceptance for payment of, or payment for, its Shares tendered, if: (1) such purchases would impair the Fund's status as a regulated investment company under the Internal Revenue Code of 1986, as amended (the "Code") (which would cause the Fund's income to be taxed at the corporate level in addition to the taxation of stockholders who receive dividends from the Fund); (2) the Fund would not be able to liquidate portfolio securities in a manner which is orderly and consistent with the Fund's investment objective and policies in order to enable the Fund to purchase Shares tendered pursuant to the Offer; or (3) there is, in the Board of Director's judgment, any (a) legal action or proceeding instituted or threatened challenging the Offer or otherwise materially adversely affecting the Fund, (b) declaration of a banking moratorium by Federal or state authorities or any suspension of payment by banks in the United States or New York State, which is material to the Fund, (c) limitation imposed by Federal or state authorities on the extension of credit by lending institutions, (d) commencement of war, armed hostilities, acts of terrorism or other international or national calamity directly or indirectly involving the United States, which is material to the Fund, or (e) other event or condition which would have a material adverse effect on the Fund or its stockholders if Shares tendered pursuant to the Offer were purchased. If the Fund determines to amend its Offer or to postpone the acceptance for payment of or payment for Shares tendered, it will, to the extent necessary, extend the period of time during which the Offer is open. Moreover, in the event any of the foregoing conditions are modified or waived in whole or in part at any time, the Fund will promptly make a public announcement of such waiver and may, depending on the materiality of the modification or waiver, extend the Offer period. See Section 13 "Extension of Tender Period; Termination; Amendments." 6. Purpose of the Offer. Currently there is no secondary market for the Fund's Shares. The Fund's Board of Directors has determined that it would be in the best interest of stockholders for the Fund to take action to attempt to provide liquidity to stockholders. The Fund will not at any time be required to make tender offers in the future. 7. Certain Effects of the Offer. The purchase of Shares pursuant to the Fund's Offer will have the effect of increasing the proportionate interest in the Fund of stockholders who do not tender their Shares. If you retain your Shares, however, you will be subject to any increased risks that may result from the reduction in the Fund's aggregate assets resulting from payment for the Shares, including, for example, the potential for greater volatility due to decreased diversification and higher expenses. However, the Fund believes that those risks will be reduced to the extent new Shares are sold. All Shares purchased by the Fund pursuant to its Offer will be retired by the Fund's Board of Directors. 8. Source and Amount of Funds. The price to be paid by the Fund for Shares tendered in its Offer will equal its NAV as of the close of the New York Stock Exchange on the Expiration Date. Based on the NAV on July 30, 2004, the aggregate purchase price if (i) 292,825 Shares are tendered and accepted for payment will be approximately $2,000,000 million. The Fund anticipates that the purchase price for shares acquired by the Fund pursuant to its Offer may be derived by the Fund from (i) cash on hand, (ii) the proceeds from the sale of cash equivalents held by the Fund, (iii) the proceeds of sales of portfolio investments held by the Fund, and /or (iv) borrowings by the Fund. The Fund has sufficient cash to purchase the tendered shares; however the Fund may borrow all or part of the funds necessary to complete the tender offer by executing a 90 day reverse repurchase agreement between the Fund and Morgan Stanley and Company. The collateral for the agreement would consist of a portion of a Credit Suisse First Boston 2003-C5 A2 bond, and the rate of the agreement would be set at LIBOR plus 10 basis points. The Fund would continue to finance the reverse repurchase agreement, which is consistent with the Fund's investment strategy. Under the 1940 Act, the Fund may not declare any dividend or other distribution upon any class of its capital stock, or purchase any such capital stock, unless the aggregate indebtedness of the Fund has at the time of the declaration of any such dividend or distribution or at the time of any such purchase an asset coverage of at least 300% for the Fund after deducting the amount of such dividend, distribution, or purchase price, as the case may be. Also, certain types of borrowings by the Fund may result in the Fund being subject to covenants in credit agreements, including those relating to the Fund's asset coverage and portfolio composition requirements and those restricting the Fund's payment of dividends and distributions. 9. Financial Information. Comprehensive financial information is included in the Fund's financial statements, copies of which have been filed with the Securities and Exchange Commission (the "SEC") and are incorporated herein by reference. You may request a copy the Fund's Annual Reports or the Fund's 2004 Semi-Annual Report at no charge by calling 1-800-HYPERION between 8:30 a.m. and 5:30 p.m., Eastern time, on any business day. 10. Certain Information About the Fund. The Fund was incorporated under the laws of the State of Maryland on September 12, 1995 and is a non-diversified, closed-end, management investment company registered under the 1940 Act. The Fund's investment objective is to provide high total return by investing, under normal circumstances, at least 65% of its assets in securities backed by interests in real estate. The investment objective of the Fund is fundamental and may not be changed without approval by the holders of more than 75% of the shares of the Fund's common stock. No assurance can be given that the Fund's objective will be achieved. Like all investors in interest bearing securities, the Fund is exposed to the risk that the prices of individual securities held by the portfolio may fluctuate, in some cases significantly, in response to changes in credit conditions and prevailing levels of interest rates. At least 80% of the Fund's assets are invested in debt. This policy is not fundamental and can be changed with at least 60 days prior notice to shareholders. There have not been any transactions involving the Fund's Shares that were effected during the past 60 business days by any executive officer or Director of the Fund, by any person controlling the Fund, by any executive officer or director of any corporation ultimately in control of the Fund or by any associate or subsidiary of any of the foregoing including any executive officer or director of any such subsidiary. On July 1, 2004, the Virginia Retirement System purchased 4,016,064.257 Shares from the Fund at a price of $7.47 per Share. The principal executive offices of the Fund are located at One Liberty Plaza, 165 Broadway, 36th Floor, New York, NY 10006-1404. 11. Additional Information. The Fund has filed an issuer tender offer statement on Schedule TO with the SEC which includes certain additional information relating to its Offer. Such material may be inspected and copied at prescribed rates at the SEC's public reference facilities at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of such material may also be obtained by mail at prescribed rates from the Public Reference Branch of the SEC at 450 Fifth Street, N.W., Washington, DC 20549. The SEC maintains a web site (http://www.sec.gov) that contains the Fund's Schedule TO and other information regarding the Fund. 12. Certain Federal Income Tax Consequences. The following discussion is a general summary of the Federal income tax consequences of a sale of Shares pursuant to the Offer. You should consult your own tax advisor for a complete description of the tax consequences to you of a sale of Shares pursuant to the Offer. The sale of Shares pursuant to the Offer will be a taxable transaction for Federal income tax purposes, either as a "sale or exchange," or under certain circumstances, as a "dividend." In general, the transaction should be treated as a sale or exchange of the Shares under Section 302 of the Code, if the receipt of cash (a) is "substantially disproportionate" with respect to the stockholder, (b) results in a "complete redemption" of the stockholder's interest, or (c) is "not essentially equivalent to a dividend" with respect to the stockholder. A "substantially disproportionate" distribution generally requires a reduction of at least 20% in the stockholder's proportionate interest in the Fund after all shares are tendered. A "complete redemption" of a stockholder's interest generally requires that all Shares of the Fund directly owned or attributed to such stockholder under Section 318 of the Code be disposed of. A distribution "not essentially equivalent to a dividend" requires that there be a "meaningful reduction" in the stockholder's interest in the Fund, which should be the case if the stockholder has a minimal interest in the Fund, exercises no control over Fund affairs and suffers a reduction in his proportionate interest in the Fund. If the sale of your Shares meets any of these three tests for "sale or exchange" treatment, you will recognize gain or loss equal to the difference between the amount of cash received pursuant to the Offer and the adjusted tax basis of the Shares sold. Such gain or loss will be a capital gain or loss if the Shares sold have been held by you as a capital asset. In general, capital gain or loss with respect to Shares sold will be long-term capital gain or loss if the holding period for such Shares is more than one year. The maximum capital gains rate currently applicable to such a sale of Shares would be 15% for individuals. If none of the Code Section 302 tests described above is met, you may be treated as having received, in whole or in part, a dividend, return of capital or capital gain, depending on (i) whether there are sufficient earnings and profits to support a dividend and (ii) your tax basis in the relevant Shares. The tax basis in the Shares tendered to the Fund will be transferred to any remaining Shares held by you in the Fund. In addition, if the sale of Shares pursuant to the Offer is treated as a "dividend" to a tendering stockholder, a constructive dividend under Code Section 305(c) may result to a non-tendering stockholder whose proportionate interest in the earnings and assets of the Fund has been increased as a result of such tender. Accordingly, the differentiation between "dividend" and "sale or exchange" treatment can be important with respect to the amount and character of income that tendering stockholders are deemed to receive. While the marginal tax rates for dividends and capital gains remain the same for corporate stockholders, the top income tax rate applicable to ordinary income dividends of the Fund paid to individual shareholders currently exceeds the maximum tax rate on capital gains (15%). The gross proceeds paid to a stockholder or other payee pursuant to the Offer will be subject to a withholding tax unless either: (a) the stockholder has provided the stockholder's taxpayer identification number/social security number, and certifies under penalty of perjury: (i) that such number is correct, and (ii) either that (A) the stockholder is exempt from backup withholding, (B) the stockholder is not otherwise subject to backup withholding as a result of a failure to report all interest or dividends, or (C) the Internal Revenue Service has notified the stockholder that the stockholder is no longer subject to backup withholding; or (b) an exception applies under applicable law and Treasury regulations. Foreign stockholders may be required to provide the Transfer Agent with a completed Form W-8BEN, available from the Transfer Agent, in order to avoid backup withholding. Unless a reduced rate of withholding or a withholding exemption is available under an applicable tax treaty, a stockholder who is a nonresident alien or a foreign entity may be subject to a 30% United States withholding tax on the gross proceeds received by such stockholder, if the proceeds are treated as a "dividend" under the rules described above. Foreign stockholders should consult their tax advisers regarding application of these withholding rules. 13. Extension of Tender Period; Termination; Amendments. The Fund reserves the right, at any time and from time to time, to extend the period of time during which its Offer is pending by making an announcement thereof. Such announcement will be issued no later than 9:00 a.m., Eastern time, on the next business day after the previously scheduled Expiration Date and will disclose the approximate number of relevant Shares tendered as of that date. In the event that the Fund elects to extend its Offer period, the NAV for the Fund's Shares tendered will be determined as of the close of business of the New York Stock Exchange on the Expiration Date, as extended. During any such extension, all Shares previously tendered and not purchased or withdrawn will remain subject to the Fund's Offer. The Fund also reserves the right, at any time and from time to time up to and including the Expiration Date, to (a) terminate its Offer and not to purchase or pay for any Shares, and (b) amend its Offer in any respect, including but not limited to, amending the number of its Shares subject to its Offer. If a material change is made to the terms of the relevant Offer, the Fund will promptly make a public announcement of any such change. Without limiting the manner in which the Fund may choose to make a public announcement of an extension, termination or amendment of the Offer, except as provided by applicable law (including Rule 13e-4(e)(2) under the Securities Exchange Act of 1934), the Fund shall have no obligation to publish, advertise or otherwise communicate any such public announcement, other than by making a press release. 14. Miscellaneous. The Offer is not being made to, nor will tenders be accepted from, stockholders in any jurisdiction in which each Offer or its acceptance would not comply with the securities laws of such jurisdiction. The Fund is not aware of any jurisdiction in which its Offer or tenders pursuant thereto would not be in compliance with the laws of such jurisdiction. However, the Fund reserves the right to exclude stockholders from its Offer in any jurisdiction in which it is asserted that the Offer cannot lawfully be made. The Fund believes such exclusion is permissible under applicable tender offer rules, provided the Fund makes a good faith effort to comply with any state law deemed applicable to its Offer. HYPERION STRATEGIC BOND FUND, INC. August 31, 2004 EX-99. 3 letteroftrans.txt LETTER OF TRANSMITTAL HYPERION STRATEGIC BOND FUND, INC. Pursuant to the Offer to Purchase Dated August 31, 2004 THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE IS 4:00 P.M., EASTERN TIME, ON SEPTEMBER 30, 2004, UNLESS EXTENDED This Letter of Transmittal is to be used only if the stockholder is a record owner of shares who desires to effect the tender offer transaction himself or herself by transmitting the necessary documents to the Fund's Transfer Agent and does not intend to request his or her broker to effect the transaction for him or her. No certificates will be presented. All shares are held in a dividend reinvestment position.
- --------------------------------------------------------------------- ------------------------------------------------------------- Name(s) and Address(es) of Registered Holder(s) Number of Shares (Please Fill in Exactly the Name(s) in Tendered Which Shares Are Registered) - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- - --------------------------------------------------------------------- ------------------------------------------------------------- Account No. - --------------------------------------------------------------------- ------------------------------------------------------------- REGISTRATION IF CHECKS ARE TO BE ISSUED IN A NAME OTHER THAN THAT SHOWN AT THE TOP OF THIS FORM OR ARE TO BE SENT TO AN ADDRESS OTHER THAN THAT SHOWN AT THE TOP OF THIS FORM, PLEASE CHECK |_| THE BOX AT THE RIGHT AND COMPLETE THE FOLLOWING INFORMATION
- -------------------------------------------------------------- --------------------------------------------------------- SPECIAL ISSUANCE INSTRUCTIONS SPECIAL ISSUANCE INSTRUCTIONS To be completed ONLY if checks(s) are to be To be completed ONLY if check(s) are to be mailed to issued in the name of someone other than the registered someone other than the registered holder(s) or such holder(s) registered holder(s) at an address other than shown on the top of this form. Name: __________________________________ Address: ________________________________ Name: __________________________________ ________________________________________ Address: ________________________________ - ---------------------------------------- ---------------------------------------- EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NUMBER - -------------------------------------------------------------- ---------------------------------------------------------
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY, SIGN AND COMPLETE THE W-9 FORM Ladies and Gentlemen: The undersigned hereby tenders to Hyperion Strategic Bond Fund, Inc., a closed-end investment company incorporated under the laws of the State of Maryland (the "Fund"), the shares described above of its common stock, par value $.001 per share (the "Shares"), at a price equal to the net asset value per Share ("NAV") calculated on the Expiration Date (as defined in the Offer to Purchase), in cash, upon the terms and conditions set forth in the Offer to Purchase dated August 31, 2004, receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together constitute the "Offer"). The undersigned hereby sells to the Fund all Shares tendered hereby that are purchased pursuant to the Offer and hereby irrevocably constitutes and appoints the Transfer Agent as attorney in fact of the undersigned, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to present such Shares and any applicable Share certificates for cancellation of such Shares on the Fund's books. The undersigned hereby warrants that the undersigned has full authority to sell the Shares tendered hereby and that the Fund will acquire good title thereto, free and clear of all liens, charges, encumbrances, conditional sales agreements or other obligations relating to the sale thereof, and not subject to any adverse claim, when and to the extent the same are purchased by it. Upon request, the undersigned will execute and deliver any additional documents necessary to complete the sale in accordance with the terms of the Offer. The undersigned recognizes that under certain circumstances set forth in the Offer to Purchase, the Fund may not be required to purchase any of the Shares tendered hereby. In that event, the undersigned understands that, in the case of Shares evidenced by certificates, certificate(s) for any Shares not purchased will be returned to the undersigned at the address indicated above. In the case of Shares not evidenced by certificates and held in an investment account, the Transfer Agent will cancel the tender order and no Shares will be withdrawn from the account. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and the obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer, this tender is irrevocable. SIGN HERE (See Instructions 1, 5, and 8) SIGNATURE(S) OF STOCKHOLDERS ____________________________________________________________ - ----------------------------------------------------------------------------- DATED:____________________________________ Must be signed by registered holder(s) exactly as name(s) appear on first page. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth the following information: NAME(S) ____________________________________________________________________ - ----------------------------------------------------------------------------- CAPACITY (full title) _________________________________________________________ ADDRESS ___________________________________________________________________ - ----------------------------------------------------------------------------- AREA CODE AND TELEPHONE NO. ___________________________________________ - ------------------------------------------------------------------------------- GUARANTEE OF SIGNATURE(s) (SEE INSTRUCTIONS) NAME OF FIRM _____________________________________________________________ ADDRESS ___________________________________________________________________ ---------------------------------------------------------------------------- AUTHORIZED SIGNATURE ___________________________________________________ NAME ______________________________________________________________________ AREA CODE AND TELEPHONE NO. ____________________________________________ - -------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ SUBSTITUTE FORM W-9 REQUEST FOR TAXPAYER IDENTIFICATION NUMBER AND CERTIFICATION (PLEASE REFER TO ACCOMPANYING GUIDELINES) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ PART 1 - PLEASE ENTER YOUR -> |_||_||_||_||_||_||_||_||_| SOCIAL SECURITY NUMBER OF EMPLOYER IDENTIFICATION NUMBER - ---------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- PART 2 - CERTIFICATION - Under penalties of perjury, I certify that: PART 3 - CERTIFICATION FOR FOREIGN RECORD HOLDERS (1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me) and Under penalties of perjury, I certify that I am not a United States citizen or (2) I am not subject to backup withholding either because I have not been resident (or I am signing for a foreign notified by the Internal Revenue Service ("IRS") that I am subject to corporation, partnership, estate or trust). backup withholding as a result to report all interest or dividends, or the IRS has notified me that I am not subject to backup withholding. Signature _________________________ date ______________________________ Certification Instructions - You must cross out item (2) in Part 2 above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received another notification from the IRS stating that you are not longer subject to backup withholding, do not cross out item (2). SIGNATURE_____________________________________ DATE_________________________________ - --------------------------------------------------------------------------------------------------------------------------------
INSTRUCTIONS Forming Part of the Terms and Conditions of the Offer 1. Guarantee of Signatures. All signatures on this Letter of Transmittal must be guaranteed by a member firm of a registered national securities exchange or a commercial bank or trust company having an office, branch or agency in the United States. This Letter of Transmittal is to be used only if you may effect the tender offer transaction yourself and do not intend to request your broker to effect the transaction for you. 2. Delivery of Letter of Transmittal. A properly completed and duly executed Letter of Transmittal, should be mailed or delivered to the Transfer Agent on or prior to the Expiration Date at the appropriate address as noted on the bottom on the last page herein and must be received by the Transfer Agent prior to the Expiration Date. The method of delivery of all documents is at the election and risk of the tendering stockholder. 3. Inadequate Space. If the space provided is inadequate, the number of Shares should be listed on a separate signed schedule attached hereto. 4. Partial Tenders. If fewer than all of the Shares in your investment account or evidenced by any certificate submitted are to be tendered, fill in the number of Shares which are to be tendered in the column entitled "No. of Shares Tendered." If applicable, a new certificate for the remainder of the Shares evidenced by your old certificate(s) will be sent to you as soon as practicable after the Expiration Date of the Offer. All Shares represented by certificate(s) listed or in your investment account are deemed to have been tendered unless otherwise indicated. 5. Signatures on Letter of Transmittal, Authorization and Endorsements. (a) If the Letter of Transmittal is signed by the registered holder of the Shares tendered hereby, the signatures(s) must correspond with the name(s) in which the Shares are registered. (b) If the Shares are held of record by two or more joint holders, all such holders must sign this Letter of Transmittal. (c) If any tendered Shares are registered in different names it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Shares. (d) When this Letter of Transmittal is signed by the registered holder(s) of the Shares listed and, if applicable, of the certificates transmitted hereby, no endorsements of certificates or separate authorizations are required. (e) If this Letter of Transmittal or any certificates or authorizations are signed by trustees, executors, administrators, guardians, attorneys in fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and must submit proper evidence satisfactory to the Fund of their authority so to act. 6. Transfer Taxes. The Fund will pay all the taxes, if any, payable on the transfer to it of Shares purchased pursuant to the Offer. If tendered certificates are registered in the name of any person other than the person(s) signing this Letter of Transmittal, the amount of any transfer taxes (whether imposed on the registered holder or such other person) payable on account of the transfer to such person will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes or exemption therefrom is submitted. 7. Irregularities. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by the Fund in its sole discretion, whose determination shall be final and binding. The Fund reserves the absolute right to reject any or all tenders determined by it not to be in appropriate form or the acceptance of or payment for which would, in the opinion of counsel for the Fund, be unlawful. The Fund also reserves the absolute right to waive any of the conditions of the Offer or any defect in any tender with respect to any particular Shares or any particular stockholder, and the Fund's interpretations of the terms and conditions of the Offer (including these instructions) will be final and binding. Unless waived, any defects or irregularities in connection with tenders must be cured within such time as the Fund shall determine. Tenders will not be deemed to have been made until all defects and irregularities have been cured or waived. Neither the Fund, Hyperion Capital Management, Inc., the Transfer Agent, nor any other person shall be obligated to give notice of defects or irregularities in tenders, nor shall any of them incur any liability for failure to give any such notice. 8. Important Tax Information. Under Federal income tax law, a stockholder whose tendered Shares are accepted for payment is required by law to provide the Transfer Agent (as payer) with his correct taxpayer identification number, which is accomplished by completing and signing the Signature Form. AMERICAN STOCK TRANSFER AND TRUST COMPANY 59 MAIDEN LANE NEW YORK, NEW YORK 10038 (877) 248-6417 Delivery to an address other than that shown above does not constitute valid delivery. ( EX-99. 4 exha1iii.txt Exhibit (a)(1)(iii) [HCM Letterhead] August 31, 2004 Dear Stockholder: We are enclosing a copy of the Hyperion Strategic Bond Fund, Inc. (the "Fund") offer to purchase dated August 31, 2004 (the "Offer to Purchase"), 292,825 issued and outstanding shares (the "Shares"). The Offer to Purchase is for cash at net asset value ("NAV") per share as of the expiration date of the offer. Together with the Offer to Purchase we are sending you a form of Letter of Transmittal (the "Letter") for use by stockholders that you should read carefully. Certain selected financial information with respect to the Fund is set forth in the Offer to Purchase. If, after reviewing the information set forth in the Offer to Purchase and Letter, you wish to tender Shares for purchase by the Fund, please follow the instructions contained in the Offer to Purchase and Letter. Neither the Fund nor its Board of Directors makes any recommendation to any stockholders as to whether or not to tender Shares. Each stockholder is urged to consult his or her broker or tax adviser before deciding whether to tender any Shares. The Fund's fiscal year-end was July 31, 2004. In the Fund's last fiscal year, the Fund distributed $12,775,362 to its stockholders, which represents approximately $0.69 per share. The last NAV calculated for the Fund on July 31, 2004 was $6.83 per share. For the Fund's fiscal year ended July 31, 2004, the Fund's highest NAV was $7.50 per share and its lowest NAV was $6.82 per share. Requests for additional copies of the Offer to Purchase, the Letter and any other tender offer documents may be directed to the undersigned, Hyperion Capital Management, Inc. at (800) HYPERION. Also, please feel free to contact the undersigned, should you have any other questions on the enclosed material. We appreciate your continued interest in the Hyperion Strategic Bond Fund, Inc. Yours truly, Hyperion Capital Management, Inc. EX-99. 5 exha1iv.txt - ------------------------------------------------------------------------------ This announcement is not an offer to purchase or solicitation of offers to sell Shares. The Offer is made only by the Offer to Purchase dated August 31, 2004, and the related Letter of Transmittal. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which making or accepting the Offer would violate that jurisdiction's laws. Hyperion Strategic Bond Fund, Inc. Notice of Offer to Purchase for Cash 292,825 of its Issued and Outstanding Shares at Net Asset Value Per Share ----------------------------- ------------------------------------------------------------------------------ THE EXPIRATION DATE AND THE WITHDRAWAL DEADLINE FOR THE OFFER is 4:00 p.m., EASTERN TIME ON THURSDAY SEPTEMBER 30, 2004, UNLESS EXTENDED. ------------------------------------------------------------------------------ Hyperion Strategic Bond Fund, Inc. (the "Fund") is offering to purchase up to 292,825 of its issued and outstanding shares of common stock par value $.001 per share (the "Shares") at a price equal to their net asset value ("NAV") as of the close of business on the New York Stock Exchange on the Expiration Date, September 30, 2004, unless extended, upon the terms and conditions set forth in the Offer to Purchase dated August 31, 2004 (the "Offer"). The NAV on July 30, was $6.83 per Share. The purpose of the Offer is to provide liquidity to the Fund's stockholders, since the Fund's shares are not sold on a secondary market. The Offer is not conditioned upon the tender of any minimum number of Shares. If more than 292,825 Shares are duly tendered prior to the expiration of the Offer assuming no changes in the factors originally considered by the Fund's Board of Directors when it determined to make the Offer, the Fund will either (1) extend its Offer period, if necessary, and increase the number of Shares that the Fund is offering to purchase to an amount which it believes will be sufficient to accommodate the excess Shares tendered, as well as any Shares tendered during the extended Offer period, or (2) purchase 292,825 Shares (or such larger number of Shares sought), on a pro rata basis. Shares tendered pursuant to the Offer may be withdrawn at any time prior to 4:00 p.m., Eastern time on Thursday, September 30, 2004, unless the offer is extended, and, if not yet accepted for payment by the Fund, Shares may also be withdrawn after October 28, 2004. The information required to be disclosed by paragraph (d)(1) of Rule 13e-4 under the Securities Exchange Act of 1934, as amended, is contained in the Offer to Purchase and is incorporated herein by reference. The Offer to Purchase and the related Letter of Transmittal for the Fund contain important information that should be read carefully before any decision is made with respect to the Offer. Questions and requests for assistance or for copies of the Offer to Purchase, the Fund's Letter of Transmittal, and any other tender offer documents, may be directed to Jennifer Donovan at the address and telephone number below. Copies will be furnished promptly at no expense to you and also may be obtained by completing and returning the coupon below to American Stock Transfer & Trust. 1-800-HYPERION ------------------------------------------------------------------------ Mail to: American Stock Transfer & Trust 59 Maiden Lane New York, NY 10038 Please send me Hyperion Strategic Bond Fund, Inc. Tender Offer materials Name__________________________Address__________________________________ Business Phone _______________City ___________________________________ Home Phone ___________________ State_____________________Zip _________ ------------------------------------------------------------------------ August 31, 2004 Hyperion Capital Management, Inc. [LOGO] ------------------------------------------------------------------------ EX-99. 6 exha5iv.txt CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the use in this Schedule TO of our reports dated September 19, 2002 and September 19, 2003, relating to the financial statements of The Hyperion Strategic Bond Fund, Inc., which are incorporated by reference into such Schedule TO. /s/ Schwartz & Hofflich LLP Schwartz & Hofflich LLP Norwalk, CT August 31, 2004 -----END PRIVACY-ENHANCED MESSAGE-----