[Federal Register Volume 62, Number 122 (Wednesday, June 25, 1997)]
[Notices]
[Page 34328]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16634]


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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 22721; 811-4445]


State Bond Income Funds, Inc.; Notice of Application

June 19, 1997.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Notice of application for deregistration under the Investment 
Company Act of 1940 (the ``Act'').

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APPLICANT: State Bond Income Funds, Inc.

RELEVANT ACT SECTION: Order requested pursuant to section 8(f).

SUMMARY OF APPLICATION: Applicant requests an order declaring that it 
has ceased to be an investment company.

FILING DATES: The application was filed on February 20, 1997, and 
amended on May 29, 1997.

HEARING OR NOTIFICATION OF HEARING: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
applicant with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on July 14, 1997, 
and should be accompanied by proof of service on applicant, in the form 
of an affidavit, or, for lawyers, a certificate of service. Hearing 
requests should state the nature of the writer's interest, the reason 
for the request, and the issues contested. Persons may request 
notification of a hearing by writing to the SEC's Secretary.

ADDRESSES: Secretary, SEC, 450 Fifth Street, N.W., Washington, D.C. 
20549. Applicant: State Bond Income Funds, Inc., 100 North Minnesota 
Street, P.O. Box 69, New Ulm, Minnesota 56073-0069.

FOR FURTHER INFORMATION CONTACT:
John K. Forst, Staff Attorney, at (202) 942-0569, or Elizabeth G. 
Osterman, Assistant Director, at (202) 942-0564 (Division of Investment 
Management, Office of Investment Company Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee from 
the SEC's Public Reference Branch.

Applicant's Representations

    1. Applicant is a registered open-end management investment 
company, organized as a Maryland corporation. Applicant filed its 
notification of registration on Form N-8A under the Act on November 5, 
1985. SEC records indicate that applicant also fined a registration 
statement on Form N-1A under the Act and under the Securities Act of 
1933 on November 5, 1985. On December 13, 1985, applicant commenced its 
initial public offering. Applicant is advised by ARM Capital Advisors, 
Inc. (``ARM'').
    2. On August 16, 1996, applicant's board of directors considered an 
Agreement and Plan of Reorganization (the ``Reorganization Agreement'') 
between applicant and Federated Fund for U.S. Government Securities, 
Inc. (the ``Federated Fund''). The Federated Fund is advised by 
Federated Advisers, a subsidiary of Federated Investors (together, 
``Federated''). Pursuant to the Reorganization Agreement, applicant 
would transfer all of its assets to the Federated Fund in exchange for 
Class A shares of the Federated Fund. The directors identified certain 
potential benefits likely to result from the reorganization, including, 
(a) operating efficiencies as a result of the larger combined size of 
the applicant and the Federated Fund, (b) applicant and the Federated 
Fund have substantially similar investment objectives, (c) applicant's 
maximum front end sales charge is higher than that of the Federated 
Fund, (d) expenses of the reorganization will be borne by ARM and/or 
Federated, and (e) the anticipated tax free nature of the 
reorganization. The directors concluded that the reorganization 
presents no significant risks or costs that would outweigh the benefits 
discussed above. Applicant's board of directors unanimously approved 
the reorganization at a meeting of the board held on August 26, 1996.
    3. On October 2, 1996, Federated Fund filed a registration 
statement and proxy materials on Form N-14 soliciting approval of the 
reorganization by applicant's shareholders. The registration statement 
was declared effective on October 24, 1996. Shareholders approved the 
reorganization at a special meeting held on December 9, 1996.
    4. On December 13, 1996, the date of the reorganization, applicant 
had 2,508,514.997 shares of common stock outstanding. Applicant's net 
asset value was $5.09 per share and its aggregate net asset value was 
$12,774,913.98. Applicant transferred assets valued at $12,774,913.98, 
and received in exchange 1,625,428.350 Class A shares of the Federated 
Fund, representing an aggregate net asset value equal to the aggregate 
net asset value of applicant's transferred shares. Such shares were 
then distributed to the shareholders of applicant, on that date, in 
proportion to each shareholder's interest in applicant based on net 
asset value.
    5. All costs involved in the reorganization will be paid by ARM 
and/or Federated.
    6. Applicant has no securityholders and no remaining assets, debts, 
or liabilities as of the date of the application.
    7. Applicant is not a party to any litigation or administrative 
proceeding. Applicant is not now engaged, and does not propose to 
engage, in any business activities other than those necessary for the 
winding up of its affairs.
    8. Applicant intends to file articles of dissolution with the 
Maryland State Department of Assessments and Taxation following 
deregistration.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 97-16634 Filed 6-24-97; 8:45 am]
BILLING CODE 8010-01-M