Notes to Financial Statements
Prudential-Bache Structured Maturity Fund, Inc., doing business as Prudential Structured Maturity Fund (the
``Fund''), is registered under the Investment Company Act of 1940, as a diversified, open-end management
investment company. The Fund consists of two portfolios--the Income Portfolio (the ``Portfolio'') and the
Municipal Income Portfolio. The Municipal Income Portfolio has not yet begun operations. The Fund was
incorporated in Maryland on June 8, 1988 and had no operations until July 1989 when 8,613 shares of the
Portfolio's common stock were sold for $100,000 to Prudential Mutual Fund Management, Inc. (``PMF'').
Investment operations commenced on September 1, 1989. The Portfolio's investment objective is high current
income consistent with the preservation of principal. The ability of issuers of debt securities held by the Portfolio
to meet their obligations may be affected by economic developments in a specific industry or region.
Securities Valuation: The Board of Directors has authorized the use of an independent pricing service to
determine valuations of U.S. Government and corporate obligations. The pricing service considers such factors as
security prices, yields, maturities, call features, ratings and developments relating to specific securities in arriving at
securities valuations. When market quotations are not readily available, a security is valued by appraisal at its fair
value as determined in good faith under procedures established under the general supervision and responsibility of
the Board of Directors.
Short-term securities which mature in more than 60 days are valued at current market quotations. Short-term
securities which mature in 60 days or less are valued at amortized cost.
In connection with transactions in repurchase agreements, the Portfolio's custodian or designated subcustodians,
as the case may be under triparty repurchase agreements, takes possession of the underlying collateral securities,
the value of w