Alliance Capital Money Market Funds Receive 10% Payment On General American Funding Agreements.

NEW YORK--(BUSINESS WIRE)--Aug. 19, 1999--

Alliance Capital Management L.P. (NYSE: "AC") today announced that four Alliance Capital money market funds have received a 10% repayment ($57 million) on their General American Life Insurance Company ("General American") funding agreement holdings.

"We are pleased that General American and the Missouri Department of Insurance have acted quickly to begin to repay these obligations," said Bruce Calvert, CEO of Alliance Capital Management L.P. "Based on information received from General American and the Missouri insurance regulators, we expect the funding agreements will be fully paid with interest. Nonetheless, Alliance Capital has taken precautions to protect its money market fund shareholders in the interim," he added.

Four money market funds sponsored by Alliance Capital hold funding agreements issued by General American. After the payment, the four money market funds own $513 million of the funding agreements. The funding agreements currently comprise no more than 3.5% of the net assets of any of the four funds after the payment. Additional information on the situation, as filed on August 16, 1999 in Alliance Capital's quarterly Form 10-Q, can be found below.

Alliance Capital President John D. Carifa stated, "The Boards of the Alliance Capital money market funds involved have considered the information available to date and valued the funding agreements at fair value, in accordance with the money market funds' procedures. Such valuation did not result in a deviation from the $1.00 per share net asset value of the affected money market funds. We are continuing to monitor the situation closely."

From Alliance Capital's Quarterly Form 10-Q, Filed August 16, 1999

The funding agreements mature on July 10, 2000 but permit the holder to redeem the principal amount thereof on seven days written notice. The money market funds gave written notices on August 2, 1999. On August 10, 1999 General American announced that, in light of the redemption notices issued by owners of a substantial portion of the funding agreements, including the money market funds, it was unable to honor the redemption notices in a timely fashion. General American stated that it has adequate assets to fulfill the redemption requests but that it has inadequate cash to meet the redemption requests at this time.

The Equitable Life Assurance Society of the United States ("ELAS"), the majority owner of Alliance Capital, has obtained letters of credit in favor of Alliance Capital's money market funds under which the funds may first draw on July 10, 2000, the maturity date of the funding agreements, to pay principal in an amount up to the face amount of the funding agreements if General American continues not to honor the redemption requests. These letters of credit are intended to prevent the net asset value of any fund from dropping below $1.00 per share in the event General American continues not to honor the redemption requests. Alliance Capital has entered into a reimbursement agreement with ELAS under which it is obligated to reimburse ELAS for all amounts drawn down by the money market funds under the letters of credit and to pay certain fees and expenses to ELAS. Alliance Capital may satisfy its financial obligations to ELAS in cash or Units valued in accordance with Alliance Capital's partnership agreement. Alliance Capital is unable to determine at this time whether or to what extent the money market funds will draw down funds under the letter of credit. While the ultimate outcome of this matter cannot be determined at this time, Alliance Capital does not expect that this matter will have a material adverse effect on the firm's consolidated financial condition.

About Alliance Capital Management L.P.

Alliance Capital is the nation's largest publicly traded asset manager, as measured by assets under management, with more than $321 billion in client assets under management at June 30, 1999, including over $29 billion in money market fund assets. The firm manages retirement assets for many of the largest public and private employee benefit plans (including 29 of the nation's Fortune 100 companies), for public employee retirement funds in 32 out of the 50 states, and for foundations, endowments, banks, and insurance companies worldwide. Alliance Capital is one of America's largest mutual fund sponsors, with a diverse family of fund portfolios and approximately 4.5 million shareholder accounts.