OVERLAND PARK, Kan. – In response to the continued volatility in the auction rate market, Tortoise Capital Advisors, LLC, the investment adviser for Tortoise Energy Infrastructure Corp. (NYSE: TYG), Tortoise Energy Capital Corp. (NYSE: TYY) and Tortoise North American Energy Corp. (NYSE: TYN), is providing updated information about its closed-end funds’ Auction Rate Notes (Notes) and Preferred Shares.

Recently, the markets for auction rate securities have faced reduced demand and an increased number of auctions have reset at their maximum stated rate, which is referred to as a failed auction. A failed auction results when there are not enough bidders in the auction at rates below the maximum rate as prescribed by the terms of the security. When an auction fails, the rate paid to continuing or new bidders is set at the maximum rate. The maximum rate varies widely among issuers. A failed auction does not cause an acceleration of, or otherwise have any impact on, outstanding principal amounts due, or in the case of preferred stock, cause a mandatory redemption or affect the security’s liquidation preference. In the event of a failed auction, interest and dividends continue to be paid at the maximum rates and times determined in the indenture or articles supplementary.

Currently, based on the Notes and Preferred Shares ratings, the maximum rate is 200 percent of the greater of: (i) the applicable AA Composite Commercial Paper Rate or the applicable Treasury Index Rate or (ii) the applicable LIBOR rate. Last week, TYY experienced a failed auction for its Series II Preferred Shares which reset at 6.23 percent, and TYG experienced a failed auction for its Series C Notes which reset at 6.27 percent. The credit ratings for the securities have not been impacted by the auction results and the Adviser does not expect that they will be.

“In our view, the failed auctions for TYY and TYG are related to liquidity issues facing the auction market and are not a reflection of the quality of the underlying assets,” said Terry Matlack, Tortoise Capital Advisors’ Managing Director. “The maximum rates we have experienced in the failed auctions are similar to rates generated by our auctions over the last several months, due in part to a lower LIBOR reference rate.”

Since August 2007, the funds have been executing on a plan to maintain financial flexibility and lessen their exposure to the auction rate markets. The Adviser has identified new institutional term debt investors and certain of the funds have extended interest and dividend reset dates on some of the series of outstanding Notes and Preferred Shares. TYG has extended interest/dividend reset dates on its Series A and B Notes to five years and one year, respectively, and on its Series I and II Preferred Shares for three years. In addition, TYG redeemed in full its $70 million Series E Notes, and intends to redeem in full its $55 million Series C Notes in March. TYY recently completed a private offering of $100 million of its Series D Notes with a maturity of seven years and used the proceeds to redeem in full its $60 million Series B Notes and $20 million of each of its Series A and C Notes.

The Adviser will consider institutional placements of debt, extensions for other note and preferred share series, the use of bank lines of credit to redeem higher cost auction rate paper, or other alternatives as may be appropriate in its efforts to match longer term financing sources with long term investments. Also, TYG and TYY have issued common equity during the last year when the Adviser and the funds’ Board of Directors believed it to be beneficial to shareholders.

“We employ leverage with a belief that it will create value to shareholders and of course that occurs when the all-in expected return from our investments exceeds our cost of leverage,” added Terry Matlack. “We believe those conditions continue to exist even with the higher cost of leverage we’re now experiencing.”

In order to provide more timely information, during the coming months and until further notice, the Adviser will continue to post auction rate updates daily on its Web site at www.tortoiseadvisors.com.

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 Jan. 31, 2008, the adviser had approximately $2.9 billion of energy investment assets under management. For more information, visit our Web site at www.tortoiseadvisors.com.

Safe Harbor Statement

This press release shall not constitute an offer to sell or a solicitation to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer or solicitation or sale would be unlawful prior to registration or qualification under the laws of such state or jurisdiction.

Posted: 02|23|08 at 11:15 am. Filed under: Finance News.