Tortoise Capital Advisors, LLC Provides Information on Current Auction Rate Market
In response to the volatility in the auction rate market over the past several weeks, Tortoise Capital Advisors, LLC, the investment adviser for Tortoise Energy Infrastructure Corp., Tortoise Energy Capital Corp. and Tortoise North American Energy Corp. is providing information about its funds’ auction rate notes and preferred shares.
Recent problems in the sub-prime mortgage market have adversely impacted borrowing costs in the asset-backed, commercial paper and auction rate markets. The Adviser generally seeks to hedge its funds’ interest rate exposure associated with changes in short-term LIBOR (the London Interbank Offered Rate). However, hedges are generally not available with respect to the spread above or below LIBOR. Historically, auctions for the funds’ notes and preferred shares have resulted in pricing at or below LIBOR. However, with recent spreads to LIBOR increasing, the funds’ financing costs have increased and may reduce total return to common stockholders.
To reduce the funds’ exposure in the short-term auction market, the
Adviser has extended interest or dividend reset dates on certain outstanding
note and preferred share series. The Adviser will also consider similar
extensions for other note and preferred share series. Additionally, the funds
may choose to reduce leverage or use largely undrawn lines of credit to redeem
higher cost auction rate paper. Until the auction markets stabilize, the
Adviser will post monthly auction rate updates on its Web site as shown in the
table below.
TYG
Latest Latest
Auction Auction Rate
Notes Cusip # Amount Date Rate Period
A 89147LAA8 60,000,000 9/4/07 6.75% Extended to 09/2012
B 89147LAB6 50,000,000 9/11/07 7.00% Extended to 09/2008
C 89147LAC4 55,000,000 9/17/07 6.25% 7 Day
D 89147LAD2 70,000,000 9/10/07 7.25% 28 Day
E 89147LAE0 70,000,000 8/30/07 6.55% 28 Day
305,000,000
Preferred
I 89147L209 35,000,000 9/12/07 6.25% Extended to 09/2010
II 89147L308 35,000,000 9/6/07 6.25% Extended to 09/2010
III 89147L407 60,000,000 9/19/07 6.65% 28 Day
IV 89147L506 55,000,000 9/18/07 6.85% 28 Day
185,000,000
Total 490,000,000
TYY
Latest Latest
Auction Auction Rate
Notes Cusip # Amount Date Rate Period
A 89147UAA8 60,000,000 9/13/07 7.00% 28 Day
B 89147UAB6 60,000,000 8/23/07 6.80% 28 Day
C 89147UAC4 70,000,000 9/17/07 6.90% 28 Day
190,000,000
Preferred
I 89147U209 70,000,000 9/10/07 7.30% 28 Day
II 89147U308 40,000,000 8/29/07 6.75% 28 Day
110,000,000
Total 300,000,000
TYN
Latest Latest
Auction Auction Rate
Notes Cusip # Amount Date Rate Period
A 89147TAB9 40,000,000 9/14/07 7.00% 28 Day
Preferred
I 89147T202 15,000,000 9/6/07 6.90% 28 Day
Total 55,000,000
Closed-end funds, unlike open-end funds, are not continuously offered. TYG and TYY however, have effective shelf registration statements pursuant to which they may offer, from time to time, common stock, preferred stock or debt securities. After their initial offering, the funds’ common shares are bought and sold on the NYSE. You should consider the investment objective, risks, charges and expenses of the funds carefully before investing. For this and other important information, please refer to each fund’s most recent prospectus, or as applicable, its most recent prospectus supplement and its accompanying prospectus, and read it carefully before investing. For additional information call Tortoise Capital Advisors, L.L.C. the fund adviser at (866) 362-9331.
About Tortoise Capital Advisors
Tortoise Capital Advisors, LLC is a pioneer in capital markets for master limited partnership (MLP) investment companies and a leader in closed-end funds and separately managed accounts focused on MLPs in the energy sector. As of Aug. 31, 2007, the adviser had approximately $2.9 billion of energy investment assets under management. For more information, visit our Web site at http://www.tortoiseadvisors.com.
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