Lord Abbett Expands Municipal Franchise With Launch of AMT Free Fund

JERSEY CITY, N.J., Nov. 1, 2010 /PRNewswire/ -- Lord, Abbett & Co. LLC ("Lord Abbett"), an independent, privately held investment management firm, today announced the launch of the Lord Abbett AMT Free Municipal Bond Fund (LATAX). The newest addition to Lord Abbett's growing suite of national tax-free offerings provides investors with an opportunity to earn an attractive yield while reducing their exposure to federal and alternative minimum taxes (AMT).

The Fund's investment strategy will focus on municipal bonds across a broad range of sectors and will include investment-grade municipal bonds, with select exposure to high-yield municipal securities. The Fund's net expense ratio of 50 basis points (bps)* is well below the 82 bps peer group average (per Class A shares in the Lipper General Muni Debt category)** and demonstrates Lord Abbett's commitment to offering investors an array of tax-free investment options which deliver potentially higher yields and are competitively priced.  

Lord Abbett Partner Daniel S. Solender, Director of Municipal Bonds, and Scott Smith, Portfolio Manager, will lead the portfolio management team that oversees the strategy, which seeks to invest in nationally issued municipal bonds not subject to the alternative minimum tax.

"In the last few years, millions of middle-income taxpayers have suddenly found themselves paying the AMT -- and the number of households impacted is only forecasted to grow," said Mike Weldon, Lord Abbett Partner and Director of Marketing. "In fact, nearly four million individual returns for tax year 2009 were affected by the AMT, and projections indicate that it will increase to an estimated 28.5 million in 2010 and 51 million by 2020."***

"The market indicates that there is a growing demand for AMT-free products with select exposure to high-yield securities and a competitive pricing model," Weldon continued. "By combining an attractive yield with an expense ratio that is considerably lower than the competition, we believe this Fund will be an appealing option for taxpayers seeking to protect their investment income from the AMT."

The newly created Fund joins the suite of Lord Abbett national tax-free municipal bond offerings, including the Short Duration Tax Free (LSDAX), Intermediate Tax Free (LISAX), National Tax Free (LANSX), and High Yield Municipal Bond (HYMAX) funds.

At the end of 2007, Lord Abbett executed a strategic shift for its entire suite of municipal offerings in order to offer investors greater choice and better meet clients' evolving needs. The changes consisted of adjusting pricing, launching new products and repositioning existing products. The Firm continued to implement the strategy this year by merging select state-specific funds into the National Tax Free Fund in order to offer investors potentially lower transaction costs, better portfolio diversification and greater potential for higher yields. The result of these ongoing efforts has been significant growth in Lord Abbett's tax-free business as assets in municipal funds and separately managed accounts have increased to approximately $15 billion (as of September 30, 2010).  

For more information on the Fund and Lord Abbett's tax-exempt income strategies, please visit www.lordabbett.com/advisor/taxfreesolutions

About Lord Abbett

Lord, Abbett & Co. LLC is an independent, privately held firm with a singular focus on the management of money. As one of the oldest money management firms in the United States, Lord Abbett has consistently provided generations of clients and their financial advisors with a quality investment experience since 1929. Lord Abbett manages approximately $102.1 billion in assets (as of September 30, 2010) across a full range of mutual funds, institutional and separately managed accounts, including $3.1 billion for which Lord Abbett provides investment models to managed account sponsors.

* The Fund has a gross expense ratio of 0.91%. The net expense ratio is based on estimates for the current fiscal year and takes into account a contractual management fee waiver/expense reimbursement agreement that currently is scheduled to remain in place through January 31, 2012. In addition, the net expense ratio takes into account deductions for certain interest and related expenses from certain of the Fund's investments. Under accounting rules, the Fund recognized additional income in an amount that directly offset these interest and related expenses. Please see the fee table in the Fund's prospectus for more information.  Please note that Fund expenses may fluctuate with market volatility.

**Reflects the average expenses of Class A shares of all funds within the Lipper General Muni Debt Funds Average based on Lipper data available.

*** "Aggregate AMT Projections, 2009–2020," Tax Policy Center of the Urban Institute and the Brookings Institution, May 3, 2010.

A Note about Risk: The value of an investment in the Fund will change as interest rates fluctuate in response to market movements. When interest rates rise, the prices of debt securities are likely to decline, and when interest rates fall, the prices of debt securities tend to rise. High-yielding non-investment-grade bonds involve higher risk than investment-grade bonds. Adverse conditions may affect the issuer's ability to pay interest and principal of the securities. The Lord Abbett AMT-Free Municipal Bond Fund does not invest in any AMT triggering private activity bonds. Although the Fund seeks income that is federally tax-free, a portion of the fund's distribution may be subject to federal, state and local taxes. For all other Lord Abbett Tax-Free Funds (Tax-Free Funds) a portion of the income derived from the Tax-Free Fund's portfolio may be subject to the alternative minimum tax and any capital gains realized may be subject to taxation, in addition, federal, state, and local taxes may apply. There is a risk that a bond issued as tax-exempt may be reclassified by the IRS as taxable, creating taxable rather than tax-exempt income. In addition, the Fund is subject to other types of risks, such as call, credit, liquidity, interest rate, and general market risks.

Investors should carefully consider the investment objectives, risks, charges, and expenses of the Lord Abbett Funds. This and other important information is contained in the fund's summary prospectus and/or prospectus. To obtain a prospectus or summary prospectus on any Lord Abbett mutual fund, contact your investment professional or Lord Abbett Distributor LLC at (888) 522-2388, or visit us at www.lordabbett.com. Read the prospectus carefully before investing.

Lord Abbett mutual fund shares are distributed by Lord Abbett Distributor LLC.

Shares of Lord Abbett mutual funds are not deposits or obligations of any bank, are not guaranteed by any bank, and are not insured by the FDIC or any other agency, and involve investment risks, including the possible loss of principal amount invested.

SOURCE Lord, Abbett & Co. LLC