Important Legal Information

Please take the time to read this brochure. It is intended to provide you with general background information about ARS as an investment strategy. If, after reviewing this brochure, you decide to consider an investment in ARS, you will be provided with more specific information and material relating to a particular ARS. This specific information is extremely important and must be reviewed carefully before making the decision to invest in a particular ARS. Nothing contained herein should be considered a substitute for or modification of the information contained in the individual prospectus of the ARS that you wish to purchase.

In addition, regulators of the U.S. securities markets also provide resources to assist you in evaluating an ARS investment. CSSU encourages you to consult such sources as the FINRA (formerly the NASD) website (www.nasd.com), the U.S. Securities and Exchange Commission website (www.sec.gov), the North American Securities Administrators Association website (www.nasaa.org) and the Municipal Securities Rulemaking Board (www.msrb.org), all of which contain helpful information for investors relating to ARS and other investment products.

Please direct any questions or requests for further information to your CSSU investment professional.

Auction Rate Securities are variable rate securities whose interest or dividend rate (the "Rate") is reset periodically. 1) They usually have a long-term maturity (or, in the case of preferred securities, no maturity). They may be issued by municipalities or their authorities, in the form of tax-exempt or taxable bonds or by corporations in the form of bonds or preferred stock (the "Issuer(s)").

The Rate on Auction Rate Securities is reset periodically through a Dutch Auction ("Auction") bidding process that is governed by a set of auction procedures established by the Issuer and its auction agent and described in the offering documents. A Dutch Auction bidding process is an auction system in which the price of an item is gradually lowered until it meets a responsive bid and is sold. The Auction process for ARS is one in which Holders or Prospective Holders indicate their interest in buying or continuing to hold the securities being auctioned. The issuer or its Auction Agent reviews all orders and determines the highest price or the lowest Rate that will result in the sale of all securities being auctioned. Existing Holders can place orders: (i) specifying the principal amount of ARS they will continue to hold if the clearing rate in the ensuing Auction is at or above a specified rate; (ii) specifying the principal amount of ARS they will continue to hold regardless of the clearing rate in the ensuing Auction; and/or (iii) specifying the principal amount of ARS they will sell regardless of the clearing rate in the ensuing auction. Additionally, Potential Holders and Holders who want to increase their position can bid to buy a specified principal amount of ARS if the clearing rate in the ensuing Auction is at or above a specified rate.

Auctions are generally held on the business day prior to the beginning of each dividend/coupon period. Auctions for ARS usually occur on a weekly or monthly basis. Because the Rate ordinarily is reset frequently, the coupon is expected to move in relation to money market rates for instruments with a maturity of the relevant reset period and similar credit quality.

Municipal Auction Rate Debt Securities and Taxable Auction Rate Debt Securities.

Municipal Auction Rate Debt Securities and Taxable Auction Rate Debt Securities represent long-term bonds with a variable rate coupon. The interest income received is federally tax-exempt and may also be state and city tax-exempt. While many issues are not subject to the Alternative Minimum Tax ("AMT"), CSSU encourages you to speak to your tax professional in this regard. 2)

Municipal Auction Rate Preferred Securities and Taxable Auction Rate Preferred Securities.

Municipal Auction Rate Debt Securities and Taxable Auction Rate Debt Securities represent long-term bonds with a variable rate coupon. The interest income received is federally tax-exempt and may also be state and city tax-exempt. While many issues are not subject to the Alternative Minimum Tax ("AMT"), CSSU encourages you to speak to your tax professional in this regard. 3)

Special Risks Related to Preferred Securities.

Your investment in a preferred ARS represents an indirect investment in securities owned by the underlying closed-end fund (the "Fund"). Most fund shares are traded on a national securities exchange or in the over-the-counter markets. The Fund may also invest to a limited extent in common equity securities or convertible debt or convertible preferred securities. The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably.

Your investment in a preferred ARS represents an indirect investment in securities owned by the underlying closed-end fund (the "Fund"). Most fund shares are traded on a national securities exchange or in the over-the-counter markets. The Fund may also invest to a limited extent in common equity securities or convertible debt or convertible preferred securities. The value of these securities, like other market investments, may move up or down, sometimes rapidly and unpredictably.

A preferred stock rating is an assessment of the capacity and willingness of an issuer to pay preferred stock obligations. The ratings on the preferred shares are not recommendations to purchase, hold, or sell those shares. Further, the ratings do not comment as to market price or suitability for a particular investor.

Risk is inherent in all investing. Therefore, before investing you should consider certain risks carefully when you invest in ARS. Below is a discussion of the primary risks of investing in ARS.

Failed Auction.

If there are more shares offered for sale in the Auction than there are buyers for those shares, the auction will fail and the Rate will be set at a specified Maximum Rate. Although the Maximum Rate is generally above the market rate, you might not be able to exit your position by means of the Auction process, and your position may therefore become illiquid. In the instance of a Failed Auction, CSSU may, but is under no obligation to, place a proprietary Buy at Rate order (or Cover Bid) for all or part of the Auction to preclude a Failed Auction from being declared. The Cover Bid may be a single bid or a series of bids at staggered rate levels and, while it may allow you to sell your shares, it will cause the clearing rate for the auction to be lower than the Maximum Rate.

All Hold Auctions and All Hold Rate.

Customers that wish to remain holders may be periodically reminded that submitting unpriced orders in the form of Deem Hold or Hold orders may result in an All Hold Auction, in which case they would receive the "All Hold Rate," which is typically below the market rate. CSSU will not inform an investor that there are no bids that specify a Rate and that the resulting Rate will be an All Hold Rate. In the instance of a potential All Hold Auction, CSSU may enter orders for its own account in any Auction for a bona fide trading purpose. If CSSU has proprietary inventory, CSSU may, but is under no obligation to, utilize such inventory to place a proprietary Hold at Rate order in the Auction.

CSSU expects its customers to make an informed investment decision whether to submit priced or unpriced order. If an All Hold Auction is declared, all such customers must receive the "All Hold Rate" pursuant to the customer's Deem Hold or Hold order. CSSU Personnel are not permitted to change a customer's bid in any manner or submit a "market" rate or any other rate for a customer's unpriced hold order. The formula for determining the All Hold Rate is set forth in the Issuer's offering documents.

Proprietary Bids to Set A Market Rate.

If in its good faith judgment, CSSU believes that an auction could clear at a rate that does not reflect the market for such securities at the time of the Auction, CSSU may, but is under no obligation to, place a proprietary Buy at Rate order ahead of a bid in the Auction to reflect the true market rate. CSSU's order in these instances could have the effect of causing the clearing rate to be higher or lower than it otherwise might have been and could cause other orders to be rejected or to be only partially filled.

Propriety Bids By CSSU.

In the event that CSSU places a proprietary order in an Auction, CSSU will do so with knowledge of other investors' orders prior to submitting its own order in the Auction.

Secondary Market Risk.

Because ARS are sold at auction and not listed on an exchange, holders who wish to sell may be unable to do so, or may only be able to sell a pro-rated percentage of their holdings. The issue will essentially become illiquid until a subsequent successful auction is conducted, the issuer redeems the issue, or a secondary market develops. Unsolicited orders for purchases or sales of securities to be effected in the secondary market may be accepted at any time unless CSSU is acting as the lead broker dealer in which case unsolicited orders for purchase or sales of securities to be effected in the secondary market may not be accepted until the Auction close. Firm personnel may not pre-arrange before an Auction sales of proprietary positions in the secondary market.

If you try to sell your shares between auctions, you may not be able to sell any or all of your shares. Broker dealers are not required to maintain a secondary market for ARS, and if you sell your shares to a broker dealer between auctions, you may receive less than the price you paid for them.

Credit Risk.

Credit risk is the risk that a preferred or debt security in the closed-end fund's portfolio will decline in price or fail to make dividend payments when due because the issuer of the security experiences a decline in its financial status. Most ARS are rated Aaa/AAA through credit enhancement or over collateralization. Aa and A issues are also available. However, these ratings do not eliminate or necessarily mitigate the risks of investing in ARS. A rating agency could downgrade the ARS shares, which may make your shares less liquid at an auction or in the secondary market.

Interest Rate Risk.

Interest rate risk is the amount that the market value of a bond will change in the event that interest rates change. When market interest rates rise, the market value of fixed-income securities generally will fall. Thus, the net asset value of the underlying closed-end fund will tend to decline if market interest rates rise.

Redemption Risk. The issuer of an ARS may be required to redeem the ARS if the underlying closed-end fund does not meet an asset coverage ratio required by law to correct a failure to meet a rating agency guideline in a timely manner. In addition, the issue may voluntarily redeem the ARS in certain circumstances.

Prepayment (Call) Risk.

Call risk is the potential amount that future cash flow will be reduced in the event that a bond is called prior to maturity. This call feature allows the issuer to repurchase the security prior to its stated maturity. An issuer can redeem an obligation if the issuer can refinance the debt at a lower cost due to declining interest rates or an improvement in the credit standing of the issuer. During periods of declining interest rates, the issuer of a security may exercise its option to prepay principal earlier than scheduled, which would cause you to reinvest in lower yielding securities.

Refunding Risk.

When interest rates decline, the issuer may exercise the call feature of the underlying debt instrument and replace it with another debt instrument paying a lower interest rate. Refunding risk refers to the possibility that an issuer will not be able to borrow funds adequate for refinancing the current bond at maturity and the resulting default creates potential losses for the investor.

Price Talk.

Price Talk refers to a range of Rates that represents the good faith judgment of CSSU, based on market and other information at a given time, of the range within which the Auction is likely to clear. Price Talk serves only as a guideline for investors as to where CSSU believes that the Auction is likely, but not guaranteed, to clear. It may be based, among other things, on the clearing rate for prior Auctions for those securities as well as similar securities, the credit quality of the issuer, market factors and general economic conditions. It is CSSU's policy that Price Talk should be established before the start of the Auction and sent to all Holders or Prospective Holders in writing via e-mail or Bloomberg. Price Talk can only be updated if a major macro-economic or credit event occurred in the specified securities and will be disseminated to all Holders and Prospective Holders. Price Talk cannot include specific information regarding customer or proprietary bids or intentions.

Impermissible Order Types.

Unless the offering documents allow them, "at the market" buy orders and "all or none" bids may not be solicited or accepted. Firm personnel may not accept discretionary orders from customers, nor solicit, accept, or discuss orders before the Auction to be executed in the auctioned securities following the Auction. Firm personnel may not maintain a separate list of orders received before the Auction for execution following the Auction. No agreement may be reached prior to the Auction to take a customer out of a position at a predetermined price after the Auction. Firm personnel may not agree in advance with a customer to generate an effective yield to the customer or arrange, before Auction execution, for actual or effective discounts to positions after the Auction, including by means of delayed settlement or prearranged purchase and sale transactions in the secondary market.

Order Entry Deadline.

CSSU will not accept customer orders and order changes for participation in an Auction within 15 minutes of the Auction Agent's deadline. Also, CSSU will not to accept customer orders in an Auction for CSSU ARS issues except to the extent permitted in the offering documents.

Tax Consequences and Other Features.

The ARS market is divided into three segments: tax-exempt, taxable and tax-advantaged. Tax-exempt and tax-advantaged issues provide income that is either fully or partially exempt from federal income taxation and may also be exempt from state and local taxes. 4) It should be noted, however, that the availability of certain tax benefits may be materially limited by factors such as residency, purpose for or timing of distributions, or other factors, as applicable.

Credit Suisse Securities (USA) LLC currently permits both the Private Banking Liaison Desk (the retail desk) and the CSSU Fixed Income Division (the institutional desk) to submit bids directly and independently to the Auction Agents or other broker-dealers. CSSU has taken steps to restrict information such that when the retail desk and the institutional desk participate in the same auction, they act at arms-length as would CSSU and any other third-party broker-dealer.

The Private Banking USA business in Credit Suisse Securities (USA) LLC is a regulated broker dealer and investment adviser. It is not a chartered bank, trust company or depository institution. It is not authorized to accept deposits or provide corporate trust services and it is not licensed or regulated by any state or federal banking authority.

1. The Rate is an interest rate in the case of auction rate bonds, or a dividend rate in the case of auction rate preferred stock.
2. The "AMT" is a Federal tax aimed at ensuring that wealthy individuals, trusts, estates and corporations pay at least some income tax.
3. Closed end fund is a fund that has a fixed number of shares
4. As a financial services firm, CSSU does not provide tax advice. All tax related questions should be referred to your tax professional.