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Strong Buys State Street Research Bond Fund

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Nov. 18, 2002 — Strong Capital Management Inc. said it has agreed to acquire State Street Research:Tax Exempt Fund/A (SSATX), a municipal bond fund. Terms were not disclosed.

The fund, which carries a 4.5% load, will be Strong’s first municipal bond fund to carry such a charge, a spokesman for the fund complex said. Strong decided to acquire an existing fund because it could offer it faster than if the company created its own fund, the spokesman, Drew Wineland, said.

State Street Research has been exiting the municipal bond business in order to focus on other fixed-income investments, a company spokeswoman said. The fund is its only retail municipal bond fund, she said.

Strong expects to begin selling the fund, which will be renamed the Strong Advisor Municipal Bond Fund, early next year, subject to approval of the acquisition by shareholders, Wineland said.

The $280-million fund returned 7.1% this year through October compared to a gain of 6.6% by the average national long-term municipal bond fund. The State Street Research fund gained 5.1% on average for the five years ended last month while its peers were up 4.8%.

Duane McAllister, a Strong portfolio manager, recently began overseeing the fund, and will continue running it following the completion of the acquisition. McAllister joined Strong in May from AAL Capital Management Corp., where he had managed a similar municipal bond fund, Wineland said.