485BPOS

<R>As filed with the Securities and Exchange Commission on September 12, 2000</R>

Securities Act File No. 333-40436
Investment Company Act File No. 811-2405

U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

<R>

[   ]	Pre-Effective Amendment No.
[X]	Post-Effective Amendment No.  1</R> (Check appropriate box or boxes)

Merrill Lynch Balanced Capital Fund, Inc.
(Exact Name of Registrant as Specified in its Charter)

(609) 282-2800
(Area Code and Telephone Number)

800 Scudders Mill Road
Plainsboro, New Jersey 08536
(Address of Principal Executive Offices:
Number, Street, City, State, Zip Code)

Terry K. Glenn
Merrill Lynch Balanced Capital Fund, Inc.
800 Scudders Mill Road, Plainsboro, New Jersey 08536
Mailing Address: P.O. Box 9011, Princeton, New Jersey 08543-9011
(Name and Address of Agent for Service)

Copies to:
Frank P. Bruno, Esq. BROWN & WOOD LLP One World Trade Center New York, New York 10048-0557	Michael J. Hennewinkel, Esq. MERRILL LYNCH INVESTMENT MANAGERS 800 Scudders Mill Road Plainsboro, New Jersey 08536

<R></R>

     Title of Securities Being Registered: Common Stock, Par Value $.10 per share.

     No filing fee is required because of reliance on Section 24(f) under the Investment Company Act of 1940, as amended.

<R></R>

<R>

This amendment consists of the following:

(1)     Facing Sheet of the Registration Statement.

(2)     Part C to the Registration Statement (including signature page).

Parts A and B are incorporated by reference from Pre-Effective Amendment No. 1 to this Registration Statement (File No. 333-40436) filed on August 11, 2000.

     This amendment is being filed solely to file as Exhibit No. 12 to this Registration Statement the private letter ruling received from the Internal Revenue Service.</R>

PART C

OTHER INFORMATION

Item 15. Indemnification.

     Reference is made to Article VI of Registrant’s Articles of Incorporation, Article VI of Registrant’s By-Laws, Section 2-418 of the Maryland General Corporation Law and Section 9 of the Class A, Class B, Class C and Class D Distribution Agreements.

     Article VI of the By-Laws provides that each officer and director of the Registrant shall be indemnified by the Registrant to the full extent permitted under the General Laws of the State of Maryland, except that such indemnity shall not protect any such person against any liability to the Registrant or any stockholder thereof to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office. Absent a court determination that an officer or director seeking indemnification was not liable on the merits or guilty of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office, the decision by the Registrant to indemnify such person must be based upon the reasonable determination of independent counsel or non-party independent directors, after review of the facts, that such officer or director is not guilty of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office.

     Each officer and director of the Registrant claiming indemnification within the scope of Article VI of the By-Laws shall be entitled to advances from the Registrant for payment of the reasonable expenses incurred by him in connection with proceedings to which he is a party in the manner and to the full extent permitted under the General Laws of the State of Maryland, provided, however, that the person seeking indemnification shall provide to the Registrant a written affirmation of his good faith belief that the standard of conduct necessary for indemnification by the Registrant has been met and a written undertaking to repay any such advance, if it should ultimately be determined that the standard of conduct has not been met, and provided further that at least one of the following additional conditions is met: (a) the person seeking indemnification shall provide a security in form and amount acceptable to the Registrant for his undertaking; (b) the Registrant is insured against losses arising by reason of the advance; (c) a majority of a quorum of non-party independent directors, or independent legal counsel in a written opinion, shall determine, based on a review of facts readily available to the Registrant at the time the advance is proposed to be made, that there is reason to believe that the person seeking indemnification will ultimately be found to be entitled to indemnification.

     The Registrant may purchase insurance on behalf of an officer or director protecting such person to the full extent permitted under the General Laws of the State of Maryland from liability arising from his or her activities as an officer or director of the Registrant. The Registrant, however, may not purchase insurance on behalf of any officer or director of the Registrant that protects or purports to protect such person from liability to the Registrant or to its stockholders to which such officer or director would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of his or her office.

     The Registrant may indemnify, make advances or purchase insurance to the extent provided in Article VI of the By-Laws on behalf of an employee or agent who is not an officer or director of the Registrant.

     In Section 9 of the Class A, Class B, Class C and Class D Distribution Agreements relating to the securities being offered hereby, the Registrant agrees to indemnify the Distributor and each person, if any, who controls the Distributor within the meaning of the Securities Act of 1933 (the “1933 Act”), against certain types of civil liabilities arising in connection with the Registration Statement or Prospectus and Statement of Additional Information.

     Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to Directors, officers and controlling persons of the Registrant and the principal underwriter pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a Director, officer, or controlling person of the Registrant and the principal underwriter in connection with the successful defense of any action, suit or proceeding) is asserted by such Director, officer or controlling person or the principal underwriter in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.

 

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Item 16. Exhibits.

1	(a)	—	Articles of Incorporation of the Registrant, dated July 29, 1987.(a)
	(b)	—	Articles of Amendment dated October 3, 1988 to Articles of Incorporation of the Registrant.(a)
	(c)	—	Articles of Merger between Merrill Lynch Capital Fund, Inc. and Merrill Lynch New Capital Fund, Inc. dated July 29, 1988.(b)
	(d)	—	Articles of Amendment, dated May 27, 1988, to Articles of Incorporation of the Registrant.(b)
	(e)	—	Articles of Amendment, dated October 17, 1994, to Articles of Incorporation of the Registrant.(b)
	(f)	—	Articles Supplementary, dated October 17, 1994, to Articles of Incorporation of the Registrant.(b)
	(g)	—	Articles Supplementary, dated March 17, 1995, to Articles of Incorporation of the Registrant.(b)
	(h)	—	Articles Supplementary, dated November 4, 1998, to Articles of Incorporation of the Registrant.(c)
2		—	By-Laws of the Registrant.(d)
3		—	Not applicable.
4		—	Form of Agreement and Plan of Reorganization between the Registrant and Merrill Lynch Convertible Fund, Inc.(e)
5		—	Portions of the Articles of Incorporation, as amended, and By-Laws of the Registrant defining the rights of holders of shares of common stock of the Registrant.(f)
6	(a)	—	Investment Advisory Agreement between the Registrant and Merrill Lynch Investment Managers, L.P. (“MLIM”).(a)
	(b)	—	Supplement to Investment Advisory Agreement between the Registrant and MLIM.(d)
7	(a)	—	Form of Revised Class A Shares Distribution Agreement between the Registrant and FAM Distributors, Inc. (formerly Princeton Funds Distributor, Inc.) (the “Distributor”) (including Form of Selected Dealers Agreement).(g)
	(b)	—	Class B Shares Distribution Agreement between the Registrant and the Distributor.(a)
	(c)	—	Letter Agreement between the Registrant and the Distributor, dated September 15, 1993, in connection with the Merrill Lynch Mutual Fund Adviser program.(d)
	(d)	—	Class C Shares Distribution Agreement between the Registrant and the Distributor.(g)
	(e)	—	Class D Shares Distribution Agreement between the Registrant and the Distributor.(g)
8		—	None.
9	(a)	—	Custody Agreement between the Registrant and The Bank of New York.(a)
	(b)	—	Amendment to Custody Agreement between the Registrant and The Bank of New York.(b)
10	(a)	—	Amended and Restated Class B Distribution Plan of the Registrant.(a)
	(b)	—	Form of Class C Distribution Plan of the Registrant and Class C Shares Distribution Plan Sub-Agreement.(g)
	(c)	—	Form of Class D Distribution Plan of the Registrant and Class D Shares Distribution Plan Sub-Agreement.(g)
	(d)	—	Merrill Lynch Select PricingSM System Plan pursuant to Rule l8f-3.(h)<R>
11		—	Opinion and Consent of Brown & Wood LLP, counsel for the Registrant. (i)
12		—	Private Letter Ruling from the Internal Revenue Service.
13		—	Credit Agreement between the Registrant and a syndicate of banks (j)
14	(a)	—	Consent of Deloitte & Touche LLP, independent auditors for the Registrant.(j)
	(b)	—	Consent of Deloitte & Touche LLP, independent auditors for Merrill Lynch Convertible Fund, Inc.(i)</R>
15		—	Not applicable.<R>
16		—	Power of Attorney.(k)
17	(a)	—	Prospectus dated July 3, 2000, and Statement of Additional Information dated July 3, 2000, of the Registrant.(i)
	(b)	—	Annual Report to Stockholders of the Registrant, for the year ended March 31, 2000.(l)
	(c)	—	Annual Report to Stockholders of Merrill Lynch Convertible Fund, Inc. for the year ended August 31, 1999.(l)
	(d)	—	Semi-Annual Report to Stockholders of Merrill Lynch Convertible Fund, Inc., for the six months ended February 29, 2000.(l)
	(e)	—	Form of Proxy (l)
	(f)	—	Code of Ethics (m)</R>

(a) Refiled on July 27, 1995, as an Exhibit to Post-Effective Amendment No. 32 to the Registrant’s Registration Statement on Form N-1A, pursuant to the Electronic Data Gathering, Analysis and Retrieval (“EDGAR”) phase-in requirements.

(b) Previously filed on July 27, 1995 as an Exhibit to Post-Effective Amendment No. 32 to Registrant’s Registration Statement on Form N-1A.

(c) Previously filed on May 26, 1999 as an Exhibit to Post-Effective Amendment No. 36 to the Registrant’s Registration Statement on Form N-1A.

 

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(d) Previously filed as an Exhibit to Post-Effective Amendment No. 30 to Registrant’s Registration Statement on Form N-1A.

(e) Included as Exhibit 1 to the Proxy Statement and Prospectus contained in this Registration Statement.

(f) Reference is made to Article IV, Article V (Sections 3, 5, 6 and 7), Articles VI, VII and IX of the Registrant’s Articles of Incorporation, as filed as Exhibits 1(a), (b), (c), (d), (e) and (f) to Post-Effective Amendment No. 32 to the Registrant’s Registration Statement on Form N-1A and to Article II, Article III (Sections 1, 3, 5 and 6), Articles VI, VII, XIII and XIV of the Registrant’s By-Laws, filed as Exhibit 2 to Post-Effective Amendment No. 30 to Registrant’s Registration Statement on Form N-1A.

(g) Previously filed as an exhibit to Post Effective Amendment No. 31 to the Registrant’s Registration Statement on Form N-1A.

(h) Incorporated by reference to Post-Effective Amendment No. 13 to the Registration Statement on Form N-1A of Merrill Lynch New York Municipal Bond Fund of Merrill Lynch Multi-State Municipal Series Trust (File No. 2-99473), filed on January 25, 1996.<R>

(i)	Previously filed on August 11, 2000 as an Exhibit to the Registrant’s Registration Statement on Form N-14.
(j)	Incorporated by reference to Exhibit 8(b) to the Registration Statement on Form N-1A of Master Premier Growth Trust (File No. 811-09733), filed on December 21, 1999.
(k)	Included on the signature page of the N-14 Registration Statement filed on June 29, 2000 and incorporated herein by reference.<R>

(l) Previously filed on June 29, 2000 as an Exhibit to the Registrant’s Registration Statement on Form N-14.</R>

(m) Incorporated by reference to Exhibit 15 to Post-Effective Amendment No. 8 to the Registration Statement on Form N-1A of Merrill Lynch Middle East/Africa Fund, Inc. (File No. 811-07155), filed on March 29, 2000.</R>

Item 17. Undertakings.

     (1) The undersigned Registrant agrees that prior to any public reoffering of the securities registered through use of a prospectus which is part of this Registration Statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, as amended, the reoffering prospectus will contain information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by other items of the applicable form.

     (2) The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act of 1933, as amended, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of securities at that time shall be deemed to be the initial bona fide offering of them.

     (3) The Registrant undertakes to file, by post-effective amendment, either a copy of the Internal Revenue Service private letter ruling applied for or an opinion of counsel as to certain tax matters, within a reasonable time after receipt of such ruling or opinion.

 

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SIGNATURES

<R>     As required by the Securities Act of 1933, this Registration Statement has been signed on behalf of the Registrant, in the Township of Plainsboro and State of New Jersey, on the 12th day of September, 2000.</R>

	Merrill Lynch Balanced Capital Fund, Inc.
	(Registrant)
By	/s/ DONALD C. BURKE
	(Donald C. Burke, Vice President and Treasurer)

     As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signatures	Title	Date
TERRY K. GLENN* (Terry K. Glenn)	President and Director    (Principal Executive Officer)
DONALD C. BURKE* (Donald C. Burke)	Vice President and Treasurer    (Principal Financial and     Accounting Officer)
M. COLYER CRUM* (M. Colyer Crum)	Director
LAURIE SIMON HODRICK* (Laurie Simon Hodrick)	Director
JACK B. SUNDERLAND* (Jack B. Sunderland)	Director
J. THOMAS TOUCHTON* (J. Thomas Touchton)	Director
FRED G. WEISS* (Fred G. Weiss)	Director
ARTHUR ZEIKEL* (Arthur Zeikel)	Director
*By: /s/ DONALD C. BURKE (Donald C. Burke, Attorney-in-Fact)	Director	<R>September 12, 2000</R>

 

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EXHIBITS TO INDEX

Exhibit Number		Description
<R>
12	—	Private Letter Ruling from the Internal Revenue Service. </R>

EX-12

Internal Revenue Service                          Department of the Treasury

Index Number: 0368.03-00; 0368.13-00              Washington, DC 20224

Donald C. Burke, Vice President/Treasurer         Person to Contact:
Merrill Lynch Convertible Fund, Inc.              Paula Hu-Pitzer, ID# 50-03517
800 Scudders Mill Road                            Telephone Number:
Plainsboro, NJ 08536                              (202) 622-7550
                                                  Refer Reply To:
                                                  CC:CORP:B05 - PLR-109772-00
                                                  Date:
                                                  August 22, 2000


Acquiring            =      Merrill Lynch Capital Fund, Inc.
                            a Maryland corporation
                            EIN:  13-2757134

Target               =      Merrill Lynch Convertible Fund, Inc.
                            a Maryland corporation
                            EIN:  13-3274981


State A              =      Maryland

Dear Mr. Burke:

      This letter responds to your representative's May 5, 2000, request for
rulings on the federal income tax consequences of a proposed transaction.
Additional information was submitted in a letter dated August 8, 2000. The
information submitted for consideration is summarized below.

      Acquiring is organized under the laws of State A and operates as a
diversified open-end management company. Acquiring has elected to be taxed as a
regulated investment company ("RIC") under ss.ss. 851-855 of the Internal
Revenue Code.

      Target is organized under the laws of State A and operates as a
non-diversified open-end management company. Target has elected to be taxed as a
RIC under ss.ss. 851-855.



                                        2
PLR-109772-00

      Acquiring and Target each offers four classes of shares (Class A, Class B,
Class C and Class D) with identical rights and fees with respect to each class.
Each of Acquiring and Target is widely held. Both file their income tax returns
based on the accrual method of accounting. Each of Acquiring and Target is
registered under the Investment Company Act of 1940.

      The directors of Acquiring and Target have approved a plan of
reorganization for what is represented to be valid business reasons. Pursuant to
the plan, the following transaction is proposed (the "Transaction"):

      (1)   Target will transfer all of its assets and liabilities to Acquiring
            in exchange for equal value of newly issued Acquiring Class A, Class
            B, Class C and Class D shares. The total value of the newly issued
            shares received by Target shareholders will represent less then 50%
            of the value of Acquiring after the Transaction.

      (2)   Target will liquidate and distribute to its shareholders all of the
            Acquiring stock received in the exchange. Each Target shareholder
            will receive, on a pro rata basis, shares of the class of Acquiring
            stock with the same class designation and respective rights as the
            Target stock held by such shareholder immediately prior to the
            Transfer.

      (3)   Target will dissolve in accordance with the laws of State A and will
            terminate its registration under the 1940 Act.

      (4)   Acquiring may sell up to 66% of the assets received in the
            Transaction to unrelated purchasers and will reinvest any proceeds
            consistent with its investment objectives and policies.

      The following representations have been made in connection with the
Transaction:

      (a)   The fair market value of the Acquiring stock received by each Target
            shareholder will be approximately equal to the fair market value of
            the Target stock surrendered in the exchange.

      (b)   Acquiring will acquire at least 90 percent of the fair market value
            of the net assets and at least 70 percent of the fair market value
            of the gross assets held by Target immediately prior to the
            Transaction. For purposes of this representation, amounts paid by
            Target to shareholders who receive cash or other property, amounts
            used by Target to pay its reorganization expenses, and all
            redemptions and distributions (except for redemptions in the
            ordinary course of Target's business as an open-end investment
            company as required by section 22(e) of the 1940 Act pursuant to a



                                       3

PLR-109772-00

            demand of a shareholder and regular, normal dividends) made by
            Target immediately preceding the transfer will be included as assets
            of Target held immediately prior to the Transaction. There will be
            no payments to dissenters.

      (c)   Acquiring has no plan or intention to reacquire any of its stock
            issued in the Transaction except in connection with its legal
            obligations under section 22(e) of the 1940 Act.

      (d)   After the Transaction, Acquiring will use the assets acquired from
            Target in its business, except that a portion of these assets may be
            sold or otherwise disposed of in the ordinary course of Acquiring's
            business. Any proceeds will be invested in accordance with
            Acquiring's investment objectives. Acquiring has no plan or
            intention to sell or dispose of any of the assets of Target acquired
            in the Transaction, except for dispositions made in the ordinary
            course of business.

      (e)   Target will distribute to its shareholders the stock of Acquiring it
            receives pursuant to the plan of reorganization.

      (f)   The liabilities of Target assumed by Acquiring and any liabilities
            to which the transferred assets of Target are subject were incurred
            by Target in the ordinary course of its business.

      (g)   Following the Transaction, Acquiring will continue the historic
            business of Target or use a significant portion of Target's historic
            business assets in the continuing business.

      (h)   Acquiring, Target, and the shareholders of Target will pay their
            respective expenses, if any, incurred in connection with the
            Transaction.

      (i)   There is no intercorporate indebtedness existing between Target and
            Acquiring that was issued, acquired or will be settled at a
            discount.

      (j)   Acquiring and Target each meets the requirements of a regulated
            investment company as defined in ss. 368(a)(2)(F).

      (k)   Acquiring does not own, directly or indirectly, nor has it owned
            during the past five years, directly or indirectly, any stock of
            Target.

      (l)   The fair market value of the assets of Target transferred to
            Acquiring will equal or exceed the sum of the liabilities assumed by
            Acquiring, plus the amount of liabilities, if any, to which the
            transferred assets are subject.



                                        4

PLR-109772-00

      (m)   Target is not under the jurisdiction of a court in a Title 11 or
            similar case within the meaning of ss. 368(a)(3)(A).

      (n)   Target and Acquiring have elected to be taxed as RICs under ss. 851
            and, for all of their taxable periods (including Target's last short
            taxable period ending on the date of the Transaction), have
            qualified for the special tax treatment afforded RICs under the
            Internal Revenue Code. After the Transaction, Acquiring intends to
            continue to so qualify.

      (o)   There is no plan or intention for Acquiring (the issuing corporation
            as defined in ss. 1.368-1(b)), or any person related (as defined
            in ss. 1.368-1(e)(3)) to Acquiring, to acquire, during the five year
            period beginning on the date of the Transaction, with consideration
            other than Acquiring stock, Acquiring stock furnished in exchange
            for a proprietary interest in Target in the Transaction, either
            directly or through any transaction, agreement, or arrangement with
            any other person, except for redemptions in the ordinary course of
            Acquiring's business as an open-end investment company as required
            under Section 22(e) of the Investment Company Act of 1940, as
            amended ("1940 Act").

      (p)   During the five year period ending on the date of the Transaction,
            (i) neither Acquiring, nor any person related (as defined
            in ss. 1.368-1(e)(3)) to Acquiring, will have acquired Target stock
            with consideration other than Acquiring stock, (ii) neither Target,
            nor any person related (as defined in ss. 1.368-1(e)(3) without
            regard to ss. 1.368-1(e)(3)(i)(A)) to Target, will have acquired
            Target stock with consideration other than Acquiring stock or Target
            stock, and (iii) no distributions will have been made with respect
            to Target stock except for redemptions in the ordinary course of
            Target's business as an open-end investment company as required
            under ss. 22(e) of the 1940 Act of 1940; and (iii) no distributions
            will have been made with respect to Target stock (other than
            regular, normal dividend distributions made pursuant to Target's
            historic dividend paying practice), either directly or through any
            transaction, agreement, or arrangement with any other person, except
            for (a) cash paid to dissenters and (b) distributions described
            in ss.ss. 852 and 4982, as required for Target's tax treatment as a
            RIC.

      (q)   The aggregate value of the acquisitions, redemptions, and
            distributions described in paragraphs (o) and (p) above will not
            exceed 50 percent of the value (without giving effect to the
            acquisitions, redemptions, and distributions) of the proprietary
            interest in Target on the effective date of the Transaction.

Based solely on the information submitted and on the representations set forth



                                        5
PLR-109772-00

above, we hold as follows:

      (1)   The acquisition by Acquiring of substantially all of the assets of
            Target in exchange for voting stock of Acquiring and Acquiring's
            assumption of Target's liabilities, followed by the distribution by
            Target to its shareholders of Acquiring stock and any remaining
            assets, in complete liquidation, will qualify as a reorganization
            within the meaning of ss. 368(a)(1)(C). Target and Acquiring will
            each be a "party to a reorganization" within the meaning of ss.
            368(b).

      (2)   Target will recognize no gain or loss upon the transfer of
            substantially all of its assets to Acquiring in exchange for voting
            stock of Acquiring and Acquiring's assumption of Target's
            liabilities or upon the distribution of the Acquiring stock to the
            Target shareholders (ss.ss. 361(a) and (c) and 357(a)).

      (3)   Acquiring will recognize no gain or loss on the receipt of the
            assets of Target in exchange for voting stock of Acquiring
            (ss. 1032(a)).

      (4)   The basis of Target's assets in the hands of Acquiring will be the
            same as the basis of those assets in the hands of Target immediately
            prior to the Transaction (ss. 362(b)).

      (5)   Acquiring's holding period for the Target assets acquired will
            include the period during which such assets were held by Target (ss.
            1223(2)).

      (6)   The Target shareholders will recognize no gain or loss on the
            receipt of voting stock of Acquiring solely in exchange for their
            Target stock (including fractional shares to which they may be
            entitled) (ss.354(a)(1)).

      (7)   The basis of the Acquiring stock received by the Target shareholders
            will be the same as the basis of the Target stock surrendered in
            exchange therefor (ss. 358(a)(1)).

      (8)   The holding period of the Acquiring stock received by the Target
            shareholders in exchange for their Target stock (including
            fractional shares to which they may be entitled) will include the
            period that the shareholder held the Target stock exchanged
            therefor, provided that the shareholder held such stock as a capital
            asset on the date of the exchange (ss.1223(1)).

      (9)   Pursuant to ss. 381(a) and ss. 1.381(a)-1, the tax year of Target
            will end on the effective date of the Transaction and Acquiring will
            succeed to and take into account the items of Target described in
            ss. 381(c), subject to the provisions and limitations specified in
            ss.ss. 381, 382, 383, and 384, and the



                                        6

PLR-109772-00

            regulations thereunder.

      No opinion is expressed about the tax treatment of the Transaction under
other provisions of the Code and regulations or about the tax treatment of any
conditions existing at the time of, or effects resulting from, the transactions
that are not specifically covered by the above rulings. Specifically, no opinion
was requested, and none is expressed, about whether Acquiring or Target qualify
as a RIC that is taxable under Subchapter M, Part 1 of the Code.

      The rulings contained in this letter are based upon information and
representations submitted by the taxpayer and accompanied by a penalty of
perjury statement executed by an appropriate party. While this office has not
verified any of the material submitted in support of the request for rulings, it
is subject to verification on examination.

      This ruling is directed only to the taxpayer(s) requesting it. Section
6110(k)(3) of the Code provides that it may not be used or cited as precedent.

      In accordance with the Power of Attorney on file with this office, a copy
of this letter is being sent to your authorized representative.

      A copy of this letter must be attached to any income tax return to which
it is relevant.

                                Sincerely yours,

                                Associate Chief Counsel (Corporate)


                                By /s/ Debra Carlisle
                                  ------------------------------
                                  Debra Carlisle
                                  Chief, Branch 5