Item 77E

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 and various Funds have also been
named as defendants in several additional lawsuits,
the majority of which 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 has retained the
law firm of Dickstein Shapiro LLP to
represent the Funds
in these lawsuits. Federated and the Funds,
and their respective counsel, are reviewing the
allegations and intend to defend
this litigation. 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.