Federated Fund Directors' Letter to Fund Shareholders
(PITTSBURGH, Pa., Nov. 28, 2005) —
The purpose of the Independent Directors of the Federated Funds is to represent the interests of shareholders in the Federated Funds. I previously wrote to you to express our deep disappointment with the market timing and late trading issues that Federated had publicly disclosed and to assure you that the Independent Directors of the Federated Funds were committed to addressing the challenges presented and maintaining your trust in the Funds. Federated has now announced resolution of the regulatory investigations resulting from these issues. I write to assure you that we have taken comprehensive action designed to prevent the identified lapses from recurring.
All of the funds that were found to be harmed as a result of market timing or late trading issues have been reimbursed to the full amount of the losses identified by an independent consultant. We have instituted reforms to ascertain that our compliance processes and procedures are clearly sufficient to prevent these issues from recurring. These efforts will be vigilantly maintained to ensure that the confidence you place in Federated Funds is justified.
John E. Murray, Jr.
Federated Independent Directors.