SOURCE: The New America High Income Fund, Inc.

September 12, 2007 17:58 ET

The New America High Income Fund, Inc. Updates Auction Term Preferred Stock Dividends

BOSTON, MA--(Marketwire - September 12, 2007) - The New America High Income Fund, Inc. (the "Fund") (NYSE: HYB) announced that as a result of turmoil in the commercial paper markets and its effect on investor demand, there has been a significant increase in the dividend rates for the four series of the Fund's Auction Term Preferred Stock (the "ATP"), each of which is rated Aaa and AAA by Moody's Investors Service, Inc. and Fitch Ratings, Inc., respectively, as determined in weekly auctions. The dividend rate for the Fund's Series D ATP (which represents approximately 19% of the aggregate $130,000,000 liquidation value of all four series of the Fund's ATP) determined on August 6, 2007 was 5.30%. The most recent weekly auction resulted in a dividend rate of 7.25% for the Fund's Series B ATP (which represents approximately 19% of the ATP's aggregate liquidation value). These ATP dividend rates are currently offset in part by amounts received by the Fund pursuant to an existing interest rate swap. The dividend rate for each series of the ATP is established in periodic auctions generally held every twenty-eight days, with none of the series sharing the same auction date. Under current market conditions, there is no assurance that future auctions of the Fund's ATP will be successful. A failed auction can cause the dividend rate for the affected series of ATP to be automatically set at 150% of a composite AA commercial paper rate specified in the Fund's charter; the application of that formula as of September 10, 2007 would have resulted in a dividend rate of approximately 7.90%. The amounts paid at the ATP dividend rates to holders of the ATP affect the amounts available for distribution to shareholders of the Fund's common stock.

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 March 31, 2007, T. Rowe Price and its affiliates managed approximately $349.9 billion of assets, including approximately $10.6 billion of "high yield" investments. T. Rowe Price has provided investment advisory services to investment companies since 1937.

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