UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 16, 2004
S&P 500(R) GEARED(SM) Fund Inc.
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(Exact name of registrant as specified in its chapter)
Maryland 333-118070 33-1103720
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4 World Financial Center 5th Floor, New York, NY 10080
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 212-449-8118
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(Former name or former address, if changed since last report)
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Item 7. Regulation FD Disclosure.
The following press release was issued by S&P 500(R) GEARED(SM) Fund
Inc. on December 16, 2004:
S&P 500(R) GEARED(SM) FUND INC. UNDERWRITERS EXERCISE
OVER-ALLOTMENT OPTION
New York, NY - December 16, 2004 - S&P 500(R) GEARED(SM) Fund Inc. (NYSE: GRE)
announced today that it has closed on the underwriters' overallotment option in
connection with its previously announced common stock offering. The underwriters
exercised 240,000 common shares, a portion of their option. The gross proceeds
from the overallotment exercise were $4,582,399.20 and closed on December 15.
The total gross proceeds from the offering, including the initial public
offering and the over-allotment, were $133,462,376.70.
The Fund's investment objective is to provide total returns, exclusive of fees
and expenses of the Fund, linked to the annual performance of the S&P 500
Composite Stock Price Index (the "S&P 500(R) Index" or "Index"). Where the Index
has negative returns for an annual period (approximately one year), the Fund
seeks to provide annual price returns that track the performance of the Index on
a one-for-one basis over the annual period. Where the performance of the Index
is positive for an annual period, the Fund seeks to deliver a "geared" return
equal to approximately three times the annual price returns of the Index up to a
maximum index participation level (the "Maximum Index Participation"). "Price
returns" means that the performance of the Index reflects only the price
movements of the common stocks included in the Index and does not reflect any
dividends declared or paid on those stocks. Regardless of whether the annual
price returns of the Index are positive or negative, to the extent the Fund
receives dividends on its long S&P 500(R) portfolio, the Fund will distribute
those dividends (exclusive of fees and expenses) to its shareholders. The Fund
will not participate in any Index returns in excess of the Maximum Index
Participation, and as a result the Fund's performance over an annual period will
be subject to a maximum annual return cap (the "Annual Return Cap").
The Exercise of a portion of the overallotment has increased the Fund's assets
and has decreased the Maximum Index Participation and Annual Return Cap. Based
on terms available at the time of the exercise of the overallotment, the actual
Maximum Index Participation and actual Annual Return Cap are approximately 4.05%
and 12.15% accordingly.
In instances where the return of the Index exceeds the Annual Return Cap, the
Fund will under-perform the Index. In future years, the Annual Return Cap could
be higher or lower than the Annual Return Cap for the first annual period and
could possibly be less than 1%. There can be no assurance that the Fund will
achieve its investment objective or be able to structure its investments as
anticipated. The Fund is not intended as a complete investment program.
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This press release is neither an offer to sell nor a solicitation of an offer to
buy shares of common stock. The offering of these securities will be made only
by means of a prospectus. Copies of a prospectus can be obtained from Merrill
Lynch & Co., 4 World Financial Center, New York, New York 10080.
This press release contains forward looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Actual results may differ from
the results projected in the forward looking statements.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
S&P 500(R) GEARED(SM) Fund Inc.
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(Registrant)
/s/ Christopher Yeagley
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(Signature)
Date: December 16, 2004
----------------- By: Christopher Yeagley
Title: Vice-President
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