Filed by Credit Suisse Asset Management Income Fund, Inc.
Pursuant to Rules 165 and 425 under the Securities Act of 1933, as amended and
deemed filed pursuant to Rule 14a-12 under the Securities Act of 1934
Investment Company Act of 1940 File Number 811-05102
Subject Companies: Credit Suisse Asset Management Strategic
Global Income Fund, Inc. and Credit Suisse Asset Management Income Fund, Inc.
CREDIT SUISSE ASSET MANAGEMENT INCOME FUND, INC.
466 Lexington Avenue, 16th Floor
New York, New York 10017
February 22, 2001
Dear Shareholder:
Today, we issued a press release announcing a proposed reorganization of
Credit Suisse Asset Management Strategic Global Income Fund, Inc. ("CGF") into
your fund, Credit Suisse Asset Management Income Fund, Inc. (the "Fund"). Under
the proposed reorganization the Fund will acquire all the assets and liabilities
of CGF in exchange for Fund shares. We have enclosed a copy of that press
release for your information, which generally outlines the reorganization and
its anticipated benefits. You will soon be receiving a Combined Proxy
Statement/Prospectus relating to the reorganization, which you should read
carefully, as it will contain important additional information regarding this
transaction. In the meantime, we wanted to take this opportunity to briefly
expand on the reasons that led us to approve this proposal.
Our approval and recommendation that shareholders vote for the
reorganization springs from a number of issues which the Fund's investment
advisor and directors have been considering over a period of time. First, while
very much wishing to retain the closed-end characteristic of the Fund, it has
been the unanimous view of the directors that an increase in the Fund's asset
size could potentially benefit shareholders in several ways: the expense ratio
could be reduced, the Fund's investment flexibility and opportunities could be
enhanced and analyst coverage of the Fund perhaps would be expanded, a factor
that the investment advisor has identified as one that may positively affect the
discount/premium at which a closed-end fund trades.
As some of you may recall, the Fund participated in a rights offering in
1996 that had the benefit of increasing the Fund's size. Presently, we have
concluded that the proposed reorganization, which is expected to result in a
combined fund with $295 million in assets, would offer shareholders the benefits
of a larger size without diluting their net asset value. Of course, it would
also permit CGF, which has fewer assets than the Fund, to experience the
advantages of expanded size as well.
In addition, we have adopted a new investment policy whereby the Fund will
be permitted to invest up to 35% of its net assets in emerging markets debt
securities and accepted a recommendation from the investment advisor to
partially reposition the Fund's portfolio. The Fund's investment objective is to
seek current income through investments primarily in debt securities. However,
the investment advisor has been under instructions from the Board to pursue the
Fund's objective prudentially. When the Fund was first formed, the high-yield
market was not as mature as it is today, and as a result this Fund has always
invested a portion of its portfolio in investment-grade debt. At the
same time, CGF has changed its investment mix to minimize investment-grade debt
and to include emerging-market debt as part of its portfolio. The Board has now
been informed of the advisor's view that it would be in the best interests of
this Fund's shareholders to have the flexibility to allocate the entire
portfolio to non-investment grade debt and to invest a portion of the portfolio
(at present 15% of net assets), as CGF does, in emerging-market debt.
The Board and the investment advisor believe that the reorganization is in
step with the Fund's objective and consistent with the repositioning of the
Fund's portfolio. For example, by assuming the assets of CGF, the Fund is
expected to be able to better pursue its objective of seeking current income
because some of those assets represent higher yielding emerging markets debt. In
addition, a portion of CGF's portfolio is comprised of domestic high yield debt
that, although still below investment grade, is rated higher than the domestic
high yield debt held by the Fund. Moreover, studies have shown that an
international component to a portfolio can help to stabilize it because domestic
and international markets will sometimes move in opposite directions.
The Board believes the proposed reorganization to be in the best interests
of the Fund's shareholders. For the reasons set forth above, we have unanimously
approved this reorganization, subject to shareholder approval.
Respectfully,
Board of Directors
Credit Suisse Asset Management
Income Fund, Inc.
There can be no assurance that the required shareholder approvals for the
reorganization will be obtained or that the reorganization will be consummated.
This letter is not an offer to sell or the solicitation of an offer to purchase
shares of the Fund, nor is it an offer to purchase or the solicitation of an
offer to sell shares of CGF. The reorganization proposal will be made only by
means of the Combined Proxy Statement/Prospectus. Investors and shareholders
should read this document carefully when it is available because it contains
important information, including certain risks associated with the
reorganization.
The Fund and its executive officers and directors may be deemed to be
participants in the solicitation of proxies from shareholders with respect to
the proposed reorganization and related matters. Information regarding such
officers and directors is included in the Fund's proxy statement for the 2000
annual meeting of shareholders filed with the Securities and Exchange Commission
on April 5, 2000 and the attached press release. The Combined Proxy
Statement/Prospectus relating to the proposed reorganization will include
updated information with respect to the executive officers and directors of the
Fund. These documents and other filed documents relating to the Fund are or will
be available to investors for free at the Website of the Securities and Exchange
Commission (www.sec.gov). The latest
annual report and semi-annual report of the Fund may also be obtained by writing
to the Fund c/o Credit Suisse Asset Management, LLC, 466 Lexington Avenue, 16th
Floor, New York, New York 10017 or by calling toll-free 1-800-293-1232.
Credit Suisse Asset Management Strategic Global Income Fund, Inc.
Credit Suisse Asset Management Income Fund, Inc.
466 Lexington Avenue, 16th Floor
New York, New York 10017
Credit Suisse Asset Management Strategic
Global Income Fund, Inc. and Credit Suisse
Asset Management Income Fund, Inc.
announce strategic initiatives and
proposed reorganization
For Immediate Release
February 22, 2001
Contact: Investor Relations
Credit Suisse Asset Management, LLC
1-800-293-1232
New York, New York. Credit Suisse Asset Management Strategic Global Income
Fund, Inc. (NYSE:CGF) ("CGF") and Credit Suisse Asset Management Income Fund,
Inc. (NYSE:CIK) ("CIK") each announced today that its Board of Directors has
approved a number of strategic initiatives and a proposed reorganization with a
view towards enhancing shareholder value, as follows:
o REALIGNMENT OF CIK PORTFOLIO. Both CIK and CGF seek high current
income. CIK historically has pursued this objective by investing
principally in high yield fixed income securities of domestic issuers,
while investing a relatively small percentage of its net assets in
investment-grade debt securities (currently approximately 15%). CGF
has pursued its investment objective by investing not less than 65% of
its net assets in
domestic high yield securities, and up to 35% of its net assets in
emerging markets debt. In the view of CIK's investment advisor, Credit
Suisse Asset Management, LLC ("CSAM"), CIK would be better positioned
to enhance its dividend yield if it were to reduce its portfolio of
investment-grade debt securities and increase its exposure to emerging
market debt securities. The CIK Board of Directors has endorsed the
investment advisor's view and has adopted an investment policy similar
to that of CGF with respect to emerging markets debt securities and
has accepted CSAM's recommendation to re-deploy CIK's investment-grade
debt securities portfolio (approximately 15% of net assets) in
emerging market debt securities. This decision was based on a number
of considerations, including CSAM's advice to the Board that:
o during the last several years emerging markets debt has matured
considerably as a separate asset class,
o emerging markets debt is generally not highly correlated with
domestic high yield debt and thus under current market conditions
should result in a less volatile portfolio than one investing
solely in domestic high yield securities, and
o the redeployment should enhance the overall yield on CIK's
portfolio, and thus enable the Board to give consideration to an
increase in CIK's dividend rate at some point in the future.
o REALIGNMENT OF CGF PORTFOLIO. As emerging markets debt has matured as
an asset class, the spreads over investment grade debt afforded by
such investments have narrowed, while at present comparable spreads
for domestic high yield fixed income securities have remained high. In
CSAM's view, CGF would be better positioned to enhance its dividend
yield if it were to increase its exposure to domestic high yield fixed
income securities and reduce the level committed to emerging markets
debt (which recently has been at or near the 35% maximum).
Accordingly, the Board of Directors of CGF has accepted CSAM's
recommendation to reduce CGF's emerging market debt securities
portfolio at present to approximately 15% of net assets from its
current level and re-deploy those assets in U.S. high yield
fixed-income securities. As a consequence of the changes to the
investment policies and investment mix of CIK and CGF, which have
taken effect immediately, CIK and CGF will now be pursuing
substantially identical investment objectives and policies.
o PROPOSED REORGANIZATION. The Board of Directors of CIK and CGF have
also announced a proposed reorganization in which CIK will acquire all
the assets and liabilities of CGF in exchange for CIK shares. Each
Board believes that a combination of the two funds would provide
significant benefits to its shareholders, including:
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o Economies of scale, which are expected to result in lower
operating expense ratios for each fund;
o Greater investment flexibility;
o Potentially greater coverage of the combined fund by securities
analysts; and
o Enhanced market liquidity of the combined fund's shares.
Accordingly, the Boards of Directors of both CGF and CIK (which have
common Directors) have unanimously approved the proposed
reorganization. The combined net assets of CGF/CIK, on a pro forma
basis based upon current asset levels, would be approximately $295
million. As a result of the reorganization, each CGF shareholder would
receive that number of CIK shares (plus cash in lieu of fractional
shares), having an aggregate net asset value equal to the aggregate
net asset value of such shareholder's CGF shares immediately prior to
the reorganization.
The reorganization is subject to the approval of (i) a majority of CIK
shares voted provided that the votes cast represent at least a
majority of the outstanding CIK shares and (ii) a majority of the
outstanding CGF shares. The closing of the reorganization is also
subject to various other customary closing conditions, including the
receipt of legal opinions that the transaction will qualify as a
tax-free reorganization under federal income tax law. The proposed
reorganization will be submitted for approval to the shareholders of
CIK at its annual meeting of shareholders and to the shareholders of
CGF at a special meeting of shareholders, both scheduled for Tuesday,
May 1, 2001. The Boards have set the record date for both meetings at
March 5, 2001.
o CHANGE IN ADVISORY FEE STRUCTURE. The Board of Directors of CIK has
also unanimously approved a proposal by CSAM to base the calculation
of the investment advisory fees payable by the combined fund on the
lower of its average weekly stock market price and its net asset
value. Under the current structure, the fee is .50 of 1% per annum of
average weekly net assets. The change in methodology, which is
conditional upon consummation of the reorganization, will result in a
reduction in the combined fund's investment advisory fees whenever its
shares trade at a discount to net asset value.
In addition, each Board of Directors has appointed James P. McCaughan as
Director and Chairman. Mr. McCaughan is the Chief Executive Officer of CSAM, the
investment adviser to CIK and CGF. Prior to joining CSAM, Mr. McCaughan was
President and Chief Operating Officer of Oppenheimer Capital and prior thereto
President and Chief Executive Officer of UBS Asset Management in New York. He
brings to the funds more than 20 years of experience in the investment
management business. William W. Priest, Jr. will continue as a Director of each
Fund.
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Professor Enrique Arzac, one of the independent Directors of CIK and CGF,
stated: "After a careful review of the expected benefits of the various actions
being approved today, the Board of Directors of each of CGF and CIK believes
that the realignment of the investment policies of the funds, the proposed
reorganization and the related new fee structure are in the best interests of
each fund and its shareholders."
James McCaughan stated: "The steps announced today all reflect CSAM's
ongoing commitment to enhance shareholder value. I believe that CSAM's proposal
to base its advisory fee for the combined fund on share price whenever the
fund's shares are trading at a discount to net asset value properly orients CSAM
to continue pursuing actions that enhance the fund's market value."
CGF has received notice that a shareholder, Ralph Bradshaw, intends to
solicit proxies in favor of electing himself and four other nominees to CGF's
Board of Directors at its next annual meeting of shareholders, which this year
is scheduled for July 2001. If the reorganization is approved at the special
meeting of shareholders being called for the purpose of considering the
reorganization proposal and the reorganization is consummated, that proposed
solicitation will be rendered moot, as CGF will be liquidated as part of the
plan of reorganization. If the reorganization is not consummated, the Board of
Directors of CGF intends to oppose Mr. Bradshaw and his nominees.
There can be no assurance that the required shareholder approvals for the
reorganization will be obtained or that the reorganization will be consummated.
This press release is not an offer to sell or the solicitation of an offer to
purchase shares of CIK, nor is it an offer to purchase or the solicitation of an
offer to sell shares of CGF. The reorganization proposal will be made only by
means of a combined proxy statement/ prospectus. Investors and shareholders
should read this document carefully when it is available because it contains
important information.
CGF and CIK and their executive officers and directors may be deemed to be
participants in the solicitation of proxies from CGF's and CIK's shareholders
with respect to the proposed reorganization and the change in advisory fee
structure. Information regarding such officers and directors (other than James
P. McCaughan) is included in CGF's and CIK's proxy statements for their
respective 2000 annual meetings of shareholders filed with the Securities and
Exchange Commission on April 4, 2000 (CGF) and April 5, 2000 (CIK). The combined
proxy statement/prospectus relating to the proposed reorganization will include
updated information with respect to the executive officers and directors of CGF
and CIK. These documents and other filed documents relating to CGF and CIK are
or will be available to investors for free at the Website of the Securities and
Exchange Commission (www.sec.gov). The latest annual report and semi-annual
report of each fund may also be obtained by writing to such fund
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c/o Credit Suisse Asset Management, LLC, 466 Lexington Avenue, 16th
Floor, New York, New York 10017 or by calling toll-free
1-800-293-1232.