SOURCE: The New America High Income Fund, Inc.

February 29, 2008 16:30 ET

The New America High Income Fund, Inc. Declares Dividend

BOSTON, MA--(Marketwire - February 29, 2008) - The New America High Income Fund, Inc. (the "Fund") (NYSE: HYB) announced today that it intends to pay a dividend of $.013 per share on the company's common stock on March 31, 2008 to common shareholders of record as of the close of business on March 17, 2008. The ex-dividend date will be March 13th.

The Fund's capital structure employs leverage in the form of an Auction Term Preferred Stock (the "ATP") which pays dividends based on a rate that resets through a monthly auction procedure. The reduced dividend reflects lower net income available for distribution to common stockholders due to a reduced contribution to earnings from the Fund's leverage and a related interest rate swap.

In late summer 2007, as the consequences of the sub-prime mortgage collapse spread, demand for auction rate securities like the Fund's ATP fell sharply, resulting in a higher dividend rate for the ATP. Beginning in August the rate set in the ATP auctions rose sharply to as high as 200 basis points above LIBOR, increasing the Fund's costs, and thereby decreasing its net income. Investor demand for auction rate securities has continued to decline in 2008 with insufficient buyer interest resulting in the recently reported auction failures. Under the terms of the ATP, the maximum dividend rate payable on the ATP is 150% of the AA-rated 30-day commercial paper rate. The principal consequence to the Fund of a failed auction is that it must pay the maximum dividend rate on the ATP until the next auction date when the dividend rate for the succeeding 28-day period is determined. To date, the Fund has had two auction failures, resulting in a dividend rate of 4.512% in the most recent instance. The Fund will continue to actively monitor conditions in the auction rate securities markets and look for avenues to address their impact on the Fund's leverage.

The New America High Income Fund, Inc. is a diversified, closed-end management investment company with a leveraged capital structure. The Fund's investment adviser is T. Rowe Price Associates, Inc. ("T. Rowe Price"). As of December 31, 2007, T. Rowe Price and its affiliates managed approximately $400 billion of assets, including approximately $10.5 billion of "high yield" investments. T. Rowe Price has provided investment advisory services to investment companies since 1937.

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