OF SPECIAL INTEREST

MERGER WITH PUTNAM MASTER INCOME TRUST PROPOSED

The fund's Trustees have approved in principle the merger of Putnam
Master Income Trust into your fund. Putnam Master Income Trust is a
closed-end, multi-sector fixed-income fund whose objectives, strategy
and investments are substantially similar to those of your fund. The
merger may result in lower expenses for shareholders of each fund due to
the larger asset base of the combined fund. A prospectus/proxy statement
containing more information about the proposed merger is expected to be
sent to shareholders of each fund in November. Completion of the merger
is subject to a number of conditions, including final approval by each
fund's Trustees and approval by shareholders of each fund at a joint
shareholder meeting expected to be held within the coming months.

This report is not an offer to sell, nor a solicitation of an offer to
buy, shares of any fund, nor is it a solicitation of a proxy. To receive
a free copy of the prospectus/proxy statement relating to the proposed
merger (which contains important information about fees, expenses and
risk considera-tions) after a registration statement has been filed with
the SEC and becomes effective, please call 1-800-255-1581. The
prospectus/proxy statement will also be available without charge on the
SEC's website (www.sec.gov). Read the prospectus/proxy statement
carefully before making any investment decisions.