SUB-ITEM 77E:  LEGAL PROCEEDINGS
LEGAL PROCEEDINGS
Since October 2003, Federated and related entities (collectively,
"Federated"), and various Federated funds ("Funds"), have been named as
defendants in several class action lawsuits now pending in the United States
District Court for the District of Maryland. The lawsuits were purportedly
filed on behalf of people who purchased, owned and/or redeemed shares of
Federated-sponsored mutual funds during specified periods beginning November
1, 1998. The suits are generally similar in alleging that Federated engaged
in illegal and improper trading practices including market timing and late
trading in concert with certain institutional traders, which allegedly caused
financial injury to the mutual fund shareholders. These lawsuits began to be
filed shortly after Federated's first public announcement that it had
received requests for information on shareholder trading activities in the
Funds from the SEC, the Office of the New York State Attorney General
("NYAG"), and other authorities. In that regard, on November 28, 2005,
Federated announced that it had reached final settlements with the SEC and
the NYAG with respect to those matters. Specifically, the SEC and NYAG
settled proceedings against three Federated subsidiaries involving
undisclosed market timing arrangements and late trading. The SEC made
findings: that Federated Investment Management Company ("FIMC"), an SEC-
registered investment adviser to various Funds, and Federated Securities
Corp., an SEC-registered broker-dealer and distributor for the Funds,
violated provisions of the Investment Advisers Act and Investment Company Act
by approving, but not disclosing, three market timing arrangements, or the
associated conflict of interest between FIMC and the funds involved in the
arrangements, either to other fund shareholders or to the funds' board; and
that Federated Shareholder Services Company, formerly an SEC-registered
transfer agent, failed to prevent a customer and a Federated employee from
late trading in violation of provisions of the Investment Company Act. The
NYAG found that such conduct violated provisions of New York State law.
Federated entered into the settlements without admitting or denying the
regulators' findings. As Federated previously reported in 2004, it has
already paid approximately $8.0 million to certain funds as determined by an
independent consultant. As part of these settlements, Federated agreed to pay
disgorgement and a civil money penalty in the aggregate amount of an
additional $72 million and, among other things, agreed that it would not
serve as investment adviser to any registered investment company unless
(i) at least 75% of the fund's directors are independent of Federated,
(ii) the chairman of each such fund is independent of Federated, (iii) no
action may be taken by the fund's board or any committee thereof unless
approved by a majority of the independent trustees of the fund or committee,
respectively, and (iv) the fund appoints a "senior officer" who reports to
the independent trustees and is responsible for monitoring compliance by the
fund with applicable laws and fiduciary duties and for managing the process
by which management fees charged to a fund are approved. The settlements are
described in Federated's announcement which, along with previous press
releases and related communications on those matters, is available in the
"About Us" section of Federated's website at FederatedInvestors.com.
Federated entities have also been named as defendants in several additional
lawsuits that are now pending in the United States District Court for the
Western District of Pennsylvania, alleging, among other things, excessive
advisory and Rule 12b-1 fees.
The Board of the Funds retained the law firm of Dickstein Shapiro LLP to
represent the Funds in each of the lawsuits described in the preceding two
paragraphs. Federated and the Funds, and their respective counsel, have been
defending this litigation, and none of the Funds remains a defendant in any
of the lawsuits (though some could potentially receive any recoveries as
nominal defendants). Additional lawsuits based upon similar allegations may
be filed in the future. The potential impact of these lawsuits, all of which
seek unquantified damages, attorneys' fees, and expenses, and future
potential similar suits is uncertain. Although we do not believe that these
lawsuits will have a material adverse effect on the Funds, there can be no
assurance that these suits, ongoing adverse publicity and/or other
developments resulting from the regulatory investigations will not result in
increased Fund redemptions, reduced sales of Fund shares, or other adverse
consequences for the Funds.



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