UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811-02201
---------

Rivus Bond Fund
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)

113 King Street
Armonk, NY 10504
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)

Clifford D. Corso
113 King Street
Armonk, NY 10504
- --------------------------------------------------------------------------------
(Name and address of agent for service)

Registrant's telephone number, including area code: 914-273-4545
------------

Date of fiscal year end: March 31
--------

Date of reporting period: March 31, 2008
--------------

ITEM 1. REPORTS TO STOCKHOLDERS.

The Report to Shareholders is attached herewith.

RIVUS BOND FUND SHAREHOLDER LETTER

APRIL 16, 2008

TO FELLOW SHAREHOLDERS:

The first quarter of 2008 continued where the fourth quarter in 2007 left off as
the credit crisis and related liquidity crunch continued to cause significant
losses in the financial sector. However, the impact of this crisis has now
spread to other parts of the economy. This quarter the most prominent victim of
the liquidity crunch was Bear Stearns. Lender confidence and appetite for Bear
Stearns credit risk eroded within a matter of days and forced the Federal
Reserve (the "Fed") to broker a distressed sale to JP Morgan Chase. The Fed
exercised its role as a lender of last resort and opened the discount window to
investment banks for the first time since the Great Depression. Traditionally,
this borrowing option was only available to regulated commercial banks. While
seldom used by commercial banks, opening this option to investment banks like
Morgan Stanley, Lehman Brothers and Goldman Sachs may ultimately prevent those
firms from meeting a similar fate as Bear Stearns. The Fed has also introduced
and enhanced several repurchase agreement structures so that illiquid high
quality assets may be used as collateral by commercial and investment banks for
short term borrowings. These measures have helped improve market liquidity.

On January 22 the Federal Open Market Committee ("FOMC") cut the Federal Funds
rate by 75 basis points ("bps") to 3.5% in an unusual inter-meeting move
reflecting its concern about poor liquidity in the short-term credit markets.
Subsequently, on January 30 and on March 18 the FOMC cut the Federal Funds rate
by 50 bps and 75 bps, respectively. These rate cuts, in total, represented an
aggressive 200 bps reduction in rates to 2.25%. In announcing the March 18 cut
of 75 bps, the Fed stated that recent economic data indicate that the outlook
for economic activity has weakened further, growth in consumer spending has
slowed, labor markets have softened and that the tightening of credit conditions
and the deepening of the housing contraction are likely to weigh on economic
growth over the next few quarters. The aggressive rate cuts combined with
measures to foster market liquidity are expected to promote moderate growth over
time and to mitigate the risks to slower economic activity.

This weak economic backdrop, the continued deterioration in the US housing
market, and the credit crunch put considerable pressure on all financial assets
with the exception of the highest quality securities, representing a significant
flight to quality. At the highest end of the quality spectrum, US Treasuries
delivered a strong total return of 4.43% for the quarter ended March 31, 2008
reflecting the 2% reduction in Fed Funds, and at the other end of the spectrum,
High Yield bonds posted a negative 3.02% return for the quarter. Equities had a
particularly difficult quarter with the Standard & Poor's 500 Index posting a
return of negative 9.44%. For the Investment Grade Credit Index, the first
quarter of 2008 marked one of the worst performances on record in terms of
excess return.

During the quarter, the dollar continued to decline in value against major
currencies, falling to $1.58 per Euro and 99.69 Yen per US$. As the dollar
weakens, imported goods and raw materials cost more, adding to overall
inflationary pressures and increasing the headwinds to a slowing economy. On the
flip side, the weakness in the dollar makes US exports more competitive, thus
"Net Exports" have contributed significantly to the US Gross Domestic Product
("GDP"). Oil prices have continued their upward trend, ending the quarter at
$101.58 per barrel and are currently at record levels and likely contributing to
a slowdown in the US economy. The unemployment rate at quarter end was 5.1%, up
0.1% from December 2007, but still down from the current cyclical high of 6.3%
as of June 2003.

For the quarter ended March 31, 2008, the Rivus Bond Fund (the "Fund") had a Net
Asset Value ("NAV") of $19.01 per share. This represents a 1.66% decrease from
$19.33 per share at December 31, 2007. On March 31, 2008, the Fund's closing
price on the New York Stock Exchange was $17.14 per share, representing a 9.84%
discount to NAV per share, compared with 9.67% discount as of December 31, 2007.
The market trading discount has narrowed to 5.57% as of market close on April
16, 2008 and is trading at a discount that is considerably lower than the peer
group

average of 7.6%. The narrowing discount may be a result of increased trading
volume as a result of purchases of the Fund's shares in the secondary market by
MBIA Inc. who are, in part, acting on their belief that Rivus shares "represent
good investment value".

One of the primary objectives of the Fund is to maintain its high level of
income. On March 12, 2008 the Board of Directors declared a dividend payment of
$0.2875 per share payable April 30, 2008 to shareholders of record on April 4,
2008. The dividend was unchanged from the prior quarter and has been for the
last 13 quarters. On an annualized basis, including the pending dividend, the
Fund has paid a total of $1.15 per share in dividends, representing a 6.57%
Dividend Yield based on the market price on April 16, 2008 of $17.50 per share.

Another primary objective of the Fund is to deliver a competitive total return.
The table below compares the performance of the Fund to the Lehman Investment
Grade Credit Index benchmark and the Fund's Peer Group average:

TOTAL RETURN-PERCENTAGE CHANGE (ANNUALIZED FOR PERIODS LONGER THAN 1 YEAR)
IN NAV PER SHARE WITH ALL DISTRIBUTIONS REINVESTED 1

QUARTER 1 YEAR 2 YEARS 5 YEARS 10 YEARS
TO TO TO TO TO
03/31/08 03/31/08 03/31/08 03/31/08 03/31/08
-------- -------- -------- -------- --------

Rivus Bond Fund 2 ....................... -1.66% 0.77% 4.14% 3.53% 4.80%
Lehman Investment Grade Credit Index 3 .. 0.43% 3.99% 5.53% 4.43% 5.94%
Peer Group Average 4 .................... -2.13% -0.89% 3.48% 4.77% 5.94%

- ----------

1 This is historical information and should not be construed as indicative
of any likely future performance

2 Source: Lipper Inc.

3 Comprised primarily of US investment grade corporate bonds (FUND'S
BENCHMARK)

4 Consists of a group of funds that the Fund has historically compared
itself against

The Fund's performance for the 5 and 10 year historical periods was reduced by
the impact of the 4.5% dilution of net asset value resulting from the rights
offering during the December 2003 quarter. Adjusting for the impact of dilution
we estimate the performance for the 5 year period was 4.22% and for the 10 year
period was 5.16%.

The returns for the quarter and for the year ended March 31, 2008, relative to
the benchmark, were negatively impacted by the disproportionate spread widening
of High Yield bonds, in which the Fund had a significant allocation, relative to
the Investment Grade Credit Index. Although the High Yield allocation took away
from the Fund's performance in the quarter and for the year, it continues to
generate a steady stream of income which has helped to maintain the dividend at
the current level. The performance also looks decidedly better in comparison
with the average of the Peer Group where the Fund outperformed the Peer Group
average by 0.48% during the quarter and by 1.66% for the 12 month period. It is
clear that all funds striving to sustain income in an environment of extreme
flight to quality were hard hit relative to an Investment Grade Credit
benchmark.

The Fund's performance will continue to be subject to the impact of trends in
longer term interest rates and to trends in relative yield spreads on corporate
bonds due to the concentration of the Fund's investments in such bonds. While
event risk was a major concern in the market throughout 2006 and the first half
of 2007, and slowing GDP growth was the concern in the second half of 2007; the
concern in 2008 is an outright recession. Indeed, with continued trouble in the
housing market, limited credit availability, high and rising oil prices and
weaker consumer spending, we believe the real debate should be about the
magnitude of a recession and not if there is a recession.

Consistent with this view, we continue to emphasize diversity and reduction of
risk within the bounds of income stability. The pie chart below summarizes the
portfolio quality of the Fund's long-term invested assets as of March 31, 2008:

PERCENT OF TOTAL INVESTMENT (LOWER OF S&P AND MOODY'S RATINGS)

[THE FOLLOWING TABLE WAS REPRESENTED BY A PIE CHART IN THE PRINTED MATERIAL.]

AAA 17.9%
AA 10.4%
A 21.8%
BBB 34.1%
BB 8.4%
B & Lower 7.4%

Please refer to the Schedule of Investments in the financial statements for
details concerning portfolio holdings.

We would like to remind shareholders of the opportunities presented by the
Fund's dividend reinvestment plan as detailed in the Fund's prospectus and
referred to in the Shareholder Information section of this report. The dividend
reinvestment plan affords shareholders a price advantage by allowing the
purchase of shares at the lower of NAV or market price. This means that the
reinvestment is at market price when the Fund is trading at a discount to NAV or
at NAV per share when market trading is at a premium to that value. To
participate in the plan, please contact PFPC Inc., the Fund's Transfer Agent and
Dividend Paying Agent, at 1-800-331-1710. The Fund's investment adviser, MBIA
Capital Management Corp., may be reached at 914-765-3272.

Sincerely,

/s/ Clifford D. Corso

Clifford D. Corso
President

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF THE RIVUS BOND FUND

We have audited the accompanying statement of assets and liabilities of Rivus
Bond Fund, including the schedule of investments, as of March 31, 2008, and the
related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended and the
financial highlights for each of the five years in the period then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform, an audit of
the Fund's internal control over financial reporting. Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Fund's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit includes examining on a test basis, evidence supporting the
amounts and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 2008 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Rivus
Bond Fund as of March 31, 2008, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended and the financial highlights for each of the five years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America.

/s/ TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania
May 2, 2008

SCHEDULE OF INVESTMENTS MARCH 31, 2008

MOODY'S/
STANDARD &
POOR'S PRINCIPAL VALUE
RATING(a) AMOUNT (000'S) (NOTE 1)
---------- -------------- ------------

LONG-TERM DEBT SECURITIES (96.79%)
AUTOMOTIVE (4.23%)
Ford Holdings, LLC, Gtd., 9.30%, 03/01/30 ............................................ Caa1/CCC+ $ 1,000 $ 720,000
Ford Motor Co., Debs., 8.90%, 01/15/32 ............................................... Caa1/CCC+ 1,060 795,000
Ford Motor Credit Co., Debs., 7.00%, 10/01/13 ........................................ B1/B 1,000 780,019
Ford Motor Credit Co., Sr. Unsec. Notes, 8.00%, 12/15/16 ............................. B1/B 1,000 782,805
General Motors Acceptance Corp., Notes, 7.25%, 03/02/11 .............................. B1/B+ 1,000 787,365
Meritor Automotive, Inc., Notes, 6.80%, 02/15/09 ..................................... B2/B 87 81,562
------------
3,946,751
------------
BEVERAGES (0.55%)
Diageo Capital PLC, Co. Gty., 5.75%, 10/23/17 ........................................ A3/A- 500 512,068
------------
CHEMICALS (0.50%)
Nova Chemicals Co., Sr. Notes, 6.50%, 01/15/12 ....................................... Ba3/B+ 500 465,000
------------
DIVERSIFIED FINANCIAL SERVICES (18.35%)
Bank of America Corp., Sub. Notes, 5.42%, 03/15/17 ................................... Aa2/AA- 1,000 991,897
Bear Stearns Co., Inc., Sr. Unsec. Notes, 7.25%, 02/01/18 ............................ Baa1/AA- 500 516,695
BlackRock, Inc., Sr. Unsub., 6.25%, 09/15/17 ......................................... A1/A+ 500 511,547
BNP Paribas, Sub. Notes, 5.186%, 06/29/35, 144A(b) ................................... Aa3/AA- 1,000 838,714
Capital One Financial Corp., Notes, 7.125%, 08/01/08 ................................. A3/BBB+ 1,000 1,001,552
Citigroup Capital XXI, Co. Gty., 8.30%, 12/21/57(b) .................................. A1/A 1,000 985,373
General Electric Capital Corp., Notes, 6.125%, 02/22/11 .............................. Aaa/AAA 1,000 1,062,927
General Electric Capital Corp., Unsec. Notes, 6.00%, 06/15/12 ........................ Aaa/AAA 1,725 1,839,195
HSBC America Capital Trust II, Co. Gty., 8.38%, 05/15/27, 144A ....................... NA/A 2,500 2,568,583
HSBC Finance Corp., Sr. Unsec. Notes, 6.75%, 05/15/11 ................................ Aa3/AA- 1,500 1,556,098
ICICI Bank Ltd., Unsub. Notes, 5.75%, 01/12/12, 144A ................................. Baa2/BBB- 1,000 970,333
JP Morgan Chase Bank NA, Sub. Notes, 6.00%, 10/01/17 ................................. Aa1/AA- 1,000 1,042,223
Landesbank Baden-Wurtt NY, Sub. Notes, 6.35%, 04/01/12 ............................... Aaa/AA+ 500 562,608
Sanwa Bank Ltd., Sr. Sub. Notes, 7.40%, 06/15/11 ..................................... Aa3/A 500 547,619
UBS PFD Funding Trust I, Co. Gty., 8.622%, 12/31/49(b) ............................... Aa2/A 1,000 992,669
UBS PFD Funding Trust V, Co. Gty., 6.243%, 05/29/49(b) ............................... Aa2/A 500 418,189
Wachovia Capital Trust III, Gtd., 5.80%, 03/15/42(b) ................................. A2/A 1,000 712,500
------------
17,118,722
------------
ENERGY (6.86%)
Anadarko Petroleum Corp., Sr. Notes, 5.95%, 09/15/16 ................................. Baa3/BBB- 700 723,904
Apache Corp., Notes, 7.70%, 03/15/26 ................................................. A3/A- 500 576,950
Chesapeake Energy Corp., Sr. Notes, 7.50%, 09/15/13 .................................. Ba3/BB 500 515,000
Pemex Project Funding Master Trust, Co. Gty., 6.125%, 08/15/08 ....................... Baa1/BBB+ 35 35,227
Petrobras International Finance Co., Sr. Unsub. Notes, 6.125%, 10/06/16 .............. Baa1/BBB- 750 747,900
Transocean, Inc., Notes, 7.50%, 04/15/31 ............................................. Baa2/BBB+ 500 550,987
Western Atlas, Inc., Debs., 8.55%, 06/15/24 .......................................... A2/A 2,539 3,250,006
------------
6,399,974
------------
GAMING, LODGING & LEISURE (1.65%)
MGM Mirage, Inc., Co. Gty., 6.00%, 10/01/09 .......................................... Ba2/BB 500 496,250
Starwood Hotels & Resorts Worldwide, Inc., Gtd., 7.875%, 05/01/12 .................... Baa3/BBB- 1,000 1,044,204
------------
1,540,454
------------
HOME BUILDERS (0.91%)
Centex Corp., Notes, 5.45%, 08/15/12 ................................................. Ba1/BB+ 1,000 845,000
------------

The accompanying notes are an integral part of these financial statements.

SCHEDULE OF INVESTMENTS -- CONTINUED

MOODY'S/
STANDARD &
POOR'S PRINCIPAL VALUE
RATING(a) AMOUNT (000'S) (NOTE 1)
---------- -------------- ------------

INDUSTRIAL (1.33%)
Belden, Inc., Sr. Sub. Notes, 7.00%, 03/15/17 ........................................ Ba1/BB- $ 250 $ 241,250
L-3 Communications Corp., Co. Gty., 6.125%, 07/15/13 ................................. Ba3/BB+ 500 488,750
United Technologies Corp., Sr. Unsec. Notes, 5.375%, 12/15/17 ........................ A2/A 500 512,954
------------
1,242,954
------------
INSURANCE (5.42%)
AIG Sunamerica Global Finance VI, Sr. Notes, 6.30%, 05/10/11, 144A ................... Aa2/AA+ 1,000 1,050,870
Berkshire Hathaway Finance Corp., Notes, 5.10%, 07/15/14 ............................. Aaa/AAA 1,000 1,057,549
Penn Central Corp., Sub. Notes, 10.875%, 05/01/11(c) ................................. WR/NR 1,500 1,616,250
Sunamerica, Inc., Debs., 8.125%, 04/28/23 ............................................ Aa2/AA 750 863,315
XL Capital Europe PLC, Gtd., 6.50%, 01/15/12 ......................................... Baa1/A- 500 471,826
------------
5,059,810
------------
MEDIA (13.46%)
Clear Channel Communication, Inc., Co. Gty., 8.00%, 11/01/08 ......................... Baa3/B- 1,000 1,032,052
Comcast Corp., Gtd., 7.05%, 03/15/33 ................................................. Baa2/BBB+ 2,000 2,039,450
Dex Media West LLC, Sr. Notes, 8.50%, 08/15/10 ....................................... Ba3/BB- 500 486,250
Dex Media West, LLC, Co. Gty., 9.875%, 08/15/13 ...................................... B1/BB- 500 435,000
Harcourt General, Inc., Sr. Debs., 8.875%, 06/01/22 .................................. WR/A- 2,000 2,634,340
Idearc, Inc., Co. Gty., 8.00%, 11/15/16 .............................................. B2/BB- 500 323,750
News America Holdings, Inc., Gtd., 7.90%, 12/01/95 ................................... Baa2/BBB+ 1,400 1,474,326
Quebecor World Capital Corp., Gtd., 6.125%, 11/15/13 ................................. WR/D 1,000 410,000
Time Warner, Inc., Debs., 9.15%, 02/01/23 ............................................ Baa2/BBB+ 3,000 3,472,392
Viacom, Inc., Sr. Debs., 7.875%, 07/30/30 ............................................ Baa3/BBB 250 243,438
------------
12,550,998
------------
MINING (1.64%)
Freeport-McMoran C&G, Sr. Unsec. Notes, 8.375%, 04/01/17 ............................. Ba2/BB 500 530,625
Vale Overseas Ltd., Co. Gty., 6.25%, 01/23/17 ........................................ Baa3/BBB 1,000 995,878
------------
1,526,503
------------
PAPER (2.13%)
Abitibi-Consolidated, Inc., Debs., 8.85%, 08/01/30 ................................... Caa2/B- 500 225,000
Smurfit Capital Funding PLC, Debs., 7.50%, 11/20/25 .................................. Ba2/BB 2,000 1,760,000
------------
1,985,000
------------
PHARMACEUTICALS (0.61%)
Monsanto Co. (Pharmacia Corp.), Debs., 6.50%, 12/01/18 ............................... Aa1/AAA 500 568,900
------------
REAL ESTATE INVESTMENT TRUST (REIT) (4.29%)
Federal Realty Investment Trust, Sr. Unsec. Notes, 5.40%, 12/01/13 ................... Baa1/BBB+ 750 735,619
Host Marriott LP, Sr. Notes, 7.00%, 08/15/12 ......................................... Ba1/BB 500 488,750
iStar Financial, Inc., Sr. Notes, 6.00%, 12/15/10 .................................... Baa2/BBB 1,000 780,000
Liberty Property LP, Sr. Notes, 7.50%, 01/15/18 ...................................... Baa2/BBB 1,000 1,009,823
Nationwide Health Properties, Inc., Notes, 6.00%, 05/20/15 ........................... Baa3/BBB- 500 490,631
Prologis, Sr. Notes, 5.50%, 04/01/12 ................................................. Baa1/BBB+ 500 501,232
------------
4,006,055
------------
RETAIL & RESTAURANT (2.67%)
Autonation, Inc., Co. Gty., 7.00%, 04/15/14 .......................................... Ba2/BB+ 500 443,750
Darden Restaurants, Inc., Debs., 7.125%, 02/01/16 .................................... Baa3/BBB 500 504,348
JC Penney Co., Inc., Sr. Unsec. Notes, 8.00%, 03/01/10 ............................... Baa3/BBB- 1,000 1,043,495
Yum! Brands, Inc., Sr. Unsec. Notes, 6.25%, 03/15/18 ................................. Baa2/BBB- 500 502,552
------------
2,494,145
------------

The accompanying notes are an integral part of these financial statements.

SCHEDULE OF INVESTMENTS -- CONTINUED

MOODY'S/
STANDARD &
POOR'S PRINCIPAL VALUE
RATING(a) AMOUNT (000'S) (NOTE 1)
---------- -------------- ------------

TELECOMMUNICATIONS (10.05%)
Citizens Communications Co., Sr. Notes, 6.25%, 01/15/13 .............................. Ba2/BB+ $ 500 $ 452,500
Deutsche Telekom International Finance BV, Gtd., 8.25%, 06/15/30 ..................... A3/A- 2,000 2,399,170
France Telecom SA, Notes, 7.75%, 03/01/11(d) ......................................... A3/A- 750 813,257
GTE Corp., Debs., 6.94%, 04/15/28 .................................................... Baa1/A 2,000 2,018,734
SBC Communications, Inc., Notes, 5.875%, 08/15/12 .................................... A2/A 500 522,957
Sprint Capital Corp., Co. Gty., 6.90%, 05/01/19 ...................................... Baa3/BBB- 1,750 1,378,125
Verizon Global Funding Corp., Notes, 7.75%, 12/01/30 ................................. A3/A 1,646 1,788,389
------------
9,373,132
------------
TRANSPORTATION (4.98%)
BNSF Funding Trust I, Co. Gty., 6.613%, 12/15/55(b) .................................. Baa3/BBB- 250 227,091
Burlington North Santa Fe., Unsec. Notes, 5.65%, 05/01/17 ............................ Baa1/BBB 1,000 1,001,355
Erac USA Finance, Co., Co. Gty., 7.00%, 10/15/37, 144A ............................... Baa2/BBB 1,000 822,070
Federal Express Corp., Notes, 9.65%, 06/15/12 ........................................ Baa2/BBB 1,750 2,093,423
Ryder Systems, Inc., Notes, 5.85%, 03/01/14 .......................................... Baa1/BBB+ 500 500,504
------------
4,644,443
------------
UTILITIES (6.73%)
Avista Corp., 5.95%, 06/01/18 ........................................................ Baa2/BBB+ 500 500,708
Dominion Resources, Inc., Sr. Unsub., Series 07-A, 6.00%, 11/30/17 ................... Baa2/A- 500 519,635
DPL, Inc., Sr. Notes, 8.00%, 03/31/09(e) ............................................. NR/NR 1,000 1,042,912
Hydro-Quebec, Gtd., Debs., 8.25%, 04/15/26 ........................................... Aa2/A+ 1,550 2,118,311
Midamerican Funding LLC, Sec. Sr. Bonds, 6.927%, 03/01/29 ............................ A3/BBB+ 500 531,300
NSTAR, Notes, 8.00%, 02/15/10 ........................................................ A2/A 500 540,982
Ohio Power Co., Sr. Notes, 6.00%, 06/01/16 ........................................... A3/BBB 500 502,191
Old Dominion Electric Coop., Sec. Bonds, 6.25%, 06/01/11 ............................. Aaa/AAA 500 526,221
------------
6,282,260
------------
MORTGAGE BACKED SECURITIES (7.86%)
FHLMC Pool # B11892, 4.50%, 01/01/19 ................................................. Aaa/AAA 1,297 1,295,772
FHLMC Pool # A15675, 6.00%, 11/01/33 ................................................. Aaa/AAA 942 971,215
FNMA Pool # 763852, 5.50%, 02/01/34 .................................................. Aaa/AAA 2,135 2,160,392
FNMA Pool # 754791, 6.50%, 12/01/33 .................................................. Aaa/AAA 1,249 1,300,190
GNSF Pool # 417239, 7.00%, 02/15/26 .................................................. Aaa/AAA 53 56,500
GNSF Pool # 780374, 7.50%, 12/15/23 .................................................. Aaa/AAA 24 26,492
Meristar Commercial Mortgage Trust, Series 1999-C1, Class C, 8.29%, 03/03/16, 144A ... Aaa/AAA 500 523,618
Wachovia Bank Commercial Mortgage Trust, Series 2006-C28, Class A3, 5.679%,
10/15/48 .......................................................................... Aaa/AAA 500 498,516
Wells Fargo Mortgage Backed Securities Trust, Series 2007-10, Class 1A19, 6.00%,
07/25/37 .......................................................................... Aaa/NA 500 496,795
------------
7,329,490
------------

ASSET BACKED SECURITIES (2.57%)
CPS Auto Trust, Series 2007-C, Class A3, 5.43%, 05/15/12, 144A(c) .................... Aaa/AAA 590 596,265
Daimler Chrysler Auto Trust, Series 2007-A, Class A3A, 5.00%, 02/18/12 ............... Aaa/AAA 1,000 1,023,753
Option One Mortgage Loan Trust, Series 2007-FXD2, Class 2A1, 5.90%, 03/25/38(d) ...... Aaa/AAA 789 775,861
------------
2,395,879
------------

The accompanying notes are an integral part of these financial statements.

SCHEDULE OF INVESTMENTS -- CONTINUED

VALUE
(NOTE 1)
------------

TOTAL INVESTMENT (96.79%)
(Cost $91,051,826) .......................................... $ 90,287,538
------------
OTHER ASSETS AND LIABILITIES (3.21%) ........................... 2,994,813
------------
NET ASSETS (100.00%) ........................................... $ 93,282,351
============

- ----------
(a) Ratings for debt securities are unaudited. All ratings are as of March 31,
2008 and may have changed subsequently.

(b) Variable rate security. Rate disclosed is as of March 31, 2008.

(d) Multi-Step Coupon. Rate disclosed is as of March 31, 2008.

(e) Security rated BBB+ by Fitch.

144A Securities were purchased pursuant to Rule 144A under the Securities Act
of 1933 and may not be resold subject to that rule except to qualified
institutional buyers. At March 31, 2008, these securities amounted to
7.90% of net assets.

LEGEND
- ------
Co. Gty. - Company Guaranty
Debs. - Debentures
FHLMC - Federal Home Loan Mortgage Corp.
FNMA - Federal National Mortgage Association
GNSF - Government National Mortgage Association (Single Family)
Gtd. - Guaranteed
NA - Not Available
NR - Not Rated
Sec. - Secured
Sr. - Senior
Sub. - Subordinated
Unsec. - Unsecured
Unsub. - Unsubordinated
WR - Withdrawn Rating

The accompanying notes are an integral part of these financial statements.

STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 2008

Assets:
Investment in securities, at value (amortized cost $91,051,826) (Note 1) ........................................ $ 90,287,538
Cash ............................................................................................................ 2,412,655
Interest receivable ............................................................................................. 1,657,048
Prepaid expenses ................................................................................................ 23,536
------------
TOTAL ASSETS .............................................................................................. 94,380,777
------------

Liabilities:
Securities Purchased ............................................................................................ 1,011,238
Payable to Investment Adviser ................................................................................... 39,545
Accrued expenses payable ........................................................................................ 47,643
------------
TOTAL LIABILITIES ......................................................................................... 1,098,426
------------
Net assets: (equivalent to $19.01 per share based on 4,907,678 shares of capital stock outstanding) ................ $ 93,282,351
============

NET ASSETS consisted of:
Par value ....................................................................................................... $ 4,907,678
Capital paid-in ................................................................................................. 91,975,447
Accumulated net investment loss ................................................................................. (444,438)
Accumulated net realized loss on investments .................................................................... (2,392,048)
Net unrealized depreciation on investments ...................................................................... (764,288)
------------
$ 93,282,351
============

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2008

Investment Income:
Interest ........................................................................................................ $ 6,151,431
Other income .................................................................................................... 92,624
------------
Total Investment Income ................................................................................... 6,244,055
------------
Expenses:
Investment advisory fees (Note 4) ................................................................. $ 478,307
Transfer agent fees ............................................................................... 34,562
Trustees' fees .................................................................................... 67,386
Audit fees ........................................................................................ 20,050
Legal fees and expenses ........................................................................... 95,441
Reports to shareholders ........................................................................... 21,936
Custodian fees .................................................................................... 15,115
Insurance ......................................................................................... 35,285
NYSE fee .......................................................................................... 25,000
Miscellaneous ..................................................................................... 45,394
-----------
Total Expenses ............................................................................................ 838,476
------------
Net Investment Income .................................................................................. 5,405,579
------------
Realized and unrealized gain (loss) on investments (Note 1):
Net realized gain from security transactions .................................................................... 296,486
------------
Unrealized appreciation (depreciation) of investments:
Beginning of the year .......................................................................... 4,208,776
End of the year ................................................................................ (764,288)
-----------
Change in unrealized depreciation of investments .......................................................... (4,973,064)
------------
Net realized and unrealized loss on investments ........................................................ (4,676,578)
------------
Net increase in net assets resulting from operations ............................................................... $ 729,001
============

The accompanying notes are an integral part of these financial statements.

STATEMENTS OF CHANGES IN NET ASSETS

YEAR ENDED YEAR ENDED
MARCH 31, 2008 MARCH 31, 2007
-------------- --------------

INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ....................................................... $ 5,405,579 $ 5,365,142
Net realized gain from security transactions (Note 2) ....................... 296,486 29,957
Change in unrealized appreciation (depreciation) of investments ............. (4,973,064) 1,686,481
-------------- --------------
Net increase in net assets resulting from operations ..................... 729,001 7,081,580
-------------- --------------
Distributions:
Distributions to shareholders from net investment income .................... (5,643,833) (5,643,838)
-------------- --------------
Increase (decrease) in net assets ........................................... (4,914,832) 1,437,742
Net Assets:
Beginning of year ........................................................... 98,197,183 96,759,441
-------------- --------------
End of year ................................................................. $ 93,282,351 $ 98,197,183
============== ==============
Accumulated net investment loss ............................................. $ (444,438) $ (365,036)
============== ==============

The accompanying notes are an integral part of these financial statements.

FINANCIAL HIGHLIGHTS

The table below sets forth financial data for a share of beneficial interest
outstanding throughout each year presented.

YEAR ENDED MARCH 31,
-------------------------------------------------------------------
2008 2007 2006 2005 2004
----------- ----------- ----------- ----------- -----------

PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year .................... $ 20.01 $ 19.72 $ 20.62 $ 21.32 $ 21.50
----------- ----------- ----------- ----------- -----------
Net investment income(1) ........................... 1.10 1.09 1.10 1.14 1.29
Net realized and unrealized gain (loss) on
investments(1) .................................. (0.95) 0.35 (0.85) (0.59) 0.83
----------- ----------- ----------- ----------- -----------
Total from investment operations ...................... 0.15 1.44 0.25 0.55 2.12
----------- ----------- ----------- ----------- -----------
Capital share transaction:
Dilution of the net asset value from rights offering
(Note 6) ........................................ -- -- -- -- (0.97)
----------- ----------- ----------- ----------- -----------
Less distributions:
Dividends from net investment income ............... (1.15) (1.15) (1.15) (1.14) (1.27)
Distributions from tax return of capital ........... -- -- -- (0.11) (0.06)
----------- ----------- ----------- ----------- -----------
Total distributions ................................... (1.15) (1.15) (1.15) (1.25) (1.33)
----------- ----------- ----------- ----------- -----------
Net asset value, end of year .......................... $ 19.01 $ 20.01 $ 19.72 $ 20.62 $ 21.32
=========== =========== =========== =========== ===========
Per share market price, end of year ................... $ 17.14 $ 18.30 $ 17.75 $ 18.26 $ 19.51
=========== =========== =========== =========== ===========

TOTAL INVESTMENT RETURN(1)
Based on market value .............................. (0.10)% 9.93% 3.52% 0.22% 1.13%

RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (in 000's) .................... $ 93,282 $ 98,197 $ 96,759 $ 101,181 $ 104,628
Ratio of expenses to average net assets ............... 0.88% 1.00% 0.90% 0.89% 0.86%
Ratio of net investment income to average net assets .. 5.66% 5.57% 5.42% 5.43% 5.57%
Portfolio turnover rate ............................... 17.25% 25.90% 24.33% 6.78% 11.99%
Number of shares outstanding at the end of the year
(in 000's) ......................................... 4,908 4,908 4,908 4,908 4,908

- ----------
(1) Total investment return is calculated assuming a purchase of shares of
beneficial interest at the market price on the first day and a sale at the
market price on the last day of the period reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Fund's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. The total
investment return, if for less than a full year, is not annualized. Past
performance is not a guarantee of future results.

The accompanying notes are an integral part of these financial statements.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES - The Rivus Bond Fund (the "Fund"), a
Delaware statutory trust, is registered under the Investment Company Act of
1940, as amended, as a diversified closed-end, management investment company.
The following is a summary of significant accounting policies consistently
followed by the Fund in preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles within the
United States of America ("GAAP").

A. SECURITY VALUATION - In valuing the Fund's net assets, all securities for
which representative market quotations are available will be valued at the
last quoted sales price on the security's principal exchange on the day of
valuation. If there are no sales of the relevant security on such day, the
security will be valued at the bid price at the time of computation.
Prices for securities traded in the over-the-counter market, including
listed debt and preferred securities, whose primary market is believed to
be over-the-counter, normally are supplied by independent pricing
services. Securities for which market quotations are not readily available
will be valued at their respective fair values as determined in good faith
by, or under procedures established by the Board of Trustees. At March 31,
2008, Penn Central Corp. and CPS Auto Trust were valued using fair value
procedures and represented 1.73% and 0.64% of net assets, respectively.

B. DETERMINATION OF GAINS OR LOSSES ON SALE OF SECURITIES - Gains or losses
on the sale of securities are calculated for financial reporting purposes
and for federal tax purposes using the identified cost basis. The
identified cost basis for financial reporting purposes differs from that
used for federal tax purposes in that the amortized cost of the securities
sold is used for financial reporting purposes and the original cost of the
securities sold is used for federal tax purposes, except for those
instances where tax regulations require the use of amortized cost.

C. FEDERAL INCOME TAXES - It is the Fund's policy to continue to comply with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Therefore, no federal income tax provision is required.

The Fund adopted the provisions of FASB Interpretation No. 48, Accounting
for Uncertainties in Income Taxes ("FIN 48"), on September 28, 2007. FIN
48 sets forth a minimum threshold for financial statement recognition of
the benefit of a tax position taken or expected to be taken in a tax
return. Management has analyzed the fund's tax positions taken on federal
income tax returns for all open tax years (tax years March 31, 2005-2008)
for purposes of implementing FIN 48, and has concluded that no provision
for income tax is required in the Fund's financial statements.

D. OTHER - Security transactions are accounted for on the trade date.
Interest income is accrued daily. Premiums and discounts are amortized
using the interest method. Paydown gains and losses on mortgage-backed and
asset-backed securities are presented as an adjustment to interest income.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED

E. DISTRIBUTIONS TO SHAREHOLDERS AND BOOK/TAX DIFFERENCES - Distributions of
net investment income will be made quarterly. Distributions of any net
realized capital gains will be made annually. Income and capital gain
distributions are determined in accordance with federal income tax
regulations, which may differ from GAAP. These differences are primarily
due to differing treatments for amortization of market premium and
accretion of market discount. In order to reflect permanent book/tax
differences that occurred during the fiscal year ended March 31, 2008, the
following capital accounts were adjusted for the following amounts:

UNDISTRIBUTED ACCUMULATED
(OVERDISTRIBUTED) NET REALIZED PAID-IN
NET INVESTMENT INCOME GAIN/(LOSS) CAPITAL
--------------------- ------------- -----------
$ 158,852 $(158,852) $ --

Distributions during the fiscal years ended March 31, 2008 and 2007 were
characterized as follows for tax purposes:

ORDINARY INCOME RETURN OF CAPITAL CAPITAL GAIN TOTAL DISTRIBUTION
--------------- ----------------- ------------ ------------------

FY 2008 $ 5,643,833 $ -- $ -- $ 5,643,833
FY 2007 $ 5,643,838 $ -- $ -- $ 5,643,838

At March 31, 2008, the components of distributable earnings on a tax basis
were as follows:

ACCUMULATED CAPITAL LOSS POST-OCTOBER NET UNREALIZED
TOTAL* ORDINARY INCOME CARRYFORWARD LOSS DEPRECIATION
------------ --------------- ------------- ------------ --------------

$(3,600,774) $ 272,818 $ (1,727,067) $ (664,981) $ (1,481,544)
============ =============== ============= ============ ==============

* Temporary differences include book amortization and deferral of
post-October losses, if any, which will be recognized for the tax
year ending March 31, 2009.

As of March 31, 2008, the capital loss carryovers available to offset
possible future capital gains were as follows:

AMOUNT EXPIRATION DATE
---------- ---------------
$ 153,490 2010
1,393,195 2011
47,236 2013
133,146 2015

At March 31, 2008, the following table shows for federal tax purposes the
aggregate cost of investments, the net unrealized appreciation of those
investments, the aggregate gross unrealized appreciation of all securities
with an excess of market value over tax cost and the aggregate gross
unrealized depreciation of all securities with an excess of tax cost over
market value:

AGGREGATE NET UNREALIZED GROSS UNREALIZED GROSS UNREALIZED
TAX COST DEPRECIATION APPRECIATION (DEPRECIATION)
------------ -------------- ---------------- ----------------
$ 91,769,082 $(1,481,544) $ 3,647,718 $(5,129,262)

The difference between book basis and tax-basis unrealized appreciation is
attributable primarily to the differing treatments for amortization of
market premium and accretion of market discount.

NOTES TO FINANCIAL STATEMENTS -- CONTINUED

F. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that may affect the reported
amounts of assets and liabilities at the date of the financial statements
and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.

NOTE 2 - PORTFOLIO TRANSACTIONS - The following is a summary of the security
transactions, other than short-term investments, for the year ended March 31,
2008:

COST OF PROCEEDS FROM SALES
PURCHASES OR MATURITIES
------------ -------------------
U.S. Government Securities $ -- $ 858,738
Other Investment Securities $ 16,064,165 $ 15,665,804

NOTE 3 - CAPITAL STOCK - At March 31, 2008, there were 10,000,000 shares of
capital stock ($1.00 par value) authorized, with 4,907,678 shares issued and
outstanding.

NOTE 4 - INVESTMENT ADVISORY CONTRACT AND PAYMENTS TO AFFILIATED PERSONS - MBIA
Capital Management Corp. ("MBIA-CMC") serves as Investment Adviser to the Fund.
MBIA-CMC is entitled to a fee at the annual rate of 0.50% on the first $100
million of the Fund's month end net assets and 0.40% on the Fund's month-end net
assets in excess of $100 million.

PFPC Inc., a member of PNC Financial Services Group, provides accounting and
administrative services to the Fund and is compensated for these services by the
Investment Adviser.

Certain officers of the Fund are also directors, officers and/or employees of
investment adviser. None of the Fund's officers receives compensation from the
Fund.

NOTE 5 - DIVIDEND AND DISTRIBUTION REINVESTMENT - In accordance with the terms
of the Automatic Dividend Investment Plan (the "Plan"), for shareholders who so
elect, dividends and distributions are made in the form of previously unissued
Fund shares at the net asset value if on the Friday preceding the payment date
(the "Valuation Date") the closing New York Stock Exchange price per share, plus
the brokerage commissions applicable to one such share equals or exceeds the net
asset value per share. However, if the net asset value is less than 95% of the
market price on the Valuation Date, the shares issued will be valued at 95% of
the market price. If the net asset value per share exceeds market price plus
commissions, the dividend or distribution proceeds are used to purchase Fund
shares on the open market for participants in the Plan. During the year ended
March 31, 2008, the Fund issued no shares under this Plan.

NOTE 6 - RIGHTS OFFERING - On December 3, 2003 the Fund completed its
transferable rights offering. In accordance with the terms of the rights
offering described in the Fund's prospectus an additional 1,234,420 shares were
issued at a subscription price of $18.77 per share, making the gross proceeds
raised by the offering $23,170,063, before offering-related expenses.
Dealer/manager fees of $868,877 and offering costs of approximately $417,993
were deducted from the gross proceeds making the net proceeds available for
investment by the Fund $21,883,193. The dilution impact of the offering was
$0.97 per share or 4.49% of the $21.58 net asset value per share on December 3,
2003, the expiration and pricing date of the offering.

NOTE 7 - NEW ACCOUNTING PRONOUNCEMENTS - In addition, in September 2006,
Statement of Financial Accounting Standards No. 157, Fair Value Measurements
("SFAS 157") was issued and is effective for fiscal years beginning after
November 15, 2007. SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements.
Management is currently evaluating the impact the adoption of SFAS 157 will have
on the Fund's financial statement disclosures.

SHAREHOLDER INFORMATION (UNAUDITED)

EVALUATION AND APPROVAL OF INVESTMENT ADVISORY AGREEMENT

The Board of Trustees, including a majority of those trustees who are not
"interested persons" as such term is defined in the 1940 Act ("Independent
Trustees"), unanimously approved the continuation for an additional one-year
period of the existing investment advisory agreement dated June 30, 2006 (the
"Agreement") between the Rivus Bond Fund (the "Fund") and MBIA Capital
Management Corp. (the "Adviser"). The Agreement has an initial term of two years
and continues thereafter from year to year if specifically approved at least
annually by the "vote of a majority of the outstanding voting securities" of the
Fund or by the Board of Trustees and, in either event, by the vote of a majority
of the Trustees who are not parties to the Agreement or interested persons of
any such party, cast in person at a meeting called for such purpose.

Before meeting to determine whether to approve the continuance of the Agreement,
the Trustees had the opportunity to review written materials provided by the
Adviser and legal counsel to the Fund which contained information to assist the
Trustees in their evaluation of the Agreement. The Adviser had responded to an
information and document request letter sent on behalf of the Board of Trustees
pursuant to Section 15(c) of the 1940 Act. The Adviser provided information
regarding (i) services performed for the Fund, (ii) the size and qualifications
of the Adviser's portfolio management staff, (iii) any potential or actual
material conflicts of interest which may arise in connection with a portfolio
manager's management of the Fund, (iv) investment performance, (v) brokerage
selection procedures, (vi) the procedures for allocating investment
opportunities between the Fund and other clients, (vii) results of any
independent audit or regulatory examination, including any recommendations or
deficiencies noted, (viii) any litigation, investigation or administrative
proceeding which may have a material impact on the Adviser's ability to service
the Fund, (ix) the compliance with the Fund's investment objective, policies and
practices (including codes of ethics), federal securities laws and other
regulatory requirements, and (x) its proxy voting policies. Included with this
information was also information regarding the advisory fees received and an
analysis of these fees in relation to the delivery of services to the Fund, the
costs of providing such services, the profitability of the Adviser in general
and as a result of the fees received from the Fund and any other ancillary
benefit resulting from the Adviser's relationship with the Fund. The Trustees
had also received a copy of the advisory agreement, the Adviser's financial
statements and its Form ADV. The Trustees were also provided with a memorandum
from legal counsel regarding the applicable legal standards and relevant case
law the Trustees should consider when approving the continuation of an
investment advisory agreement. The Trustees also reviewed comparative
performance data, comparative statistics and fee data for the Fund relative to
other funds in its peer group.

The Trustees considered and weighed the above information based upon their
accumulated experience in governing the Fund and working with the Adviser on
matters relating to the Fund. During its deliberations on whether to approve the
continuance of the Agreement, the Trustees considered many factors.

The Trustees considered the nature, extent and quality of the services provided
by the Adviser. The Trustees considered the services provided to the Fund by the
Adviser as compared to services provided by other advisers which manage funds
with investment objectives, strategies and policies similar to those of the
Fund. The Trustees concluded that the nature, extent and quality of the services
provided by to the Fund were appropriate and consistent with the terms of the
Agreement, that the quality of those services had been consistent with industry
norms and that the Fund was likely to benefit from the continued provision of
those services by the Adviser. They also concluded that the Adviser had
sufficient personnel, with the appropriate education and experience, to serve
the Fund effectively and had demonstrated its continuing ability to attract and
retain qualified personnel. The Trustees noted that the portfolio managers of
the Fund had approximately 55 years of combined investment experience.

SHAREHOLDER INFORMATION (UNAUDITED) - CONTINUED

The Trustees considered the investment performance of the Fund and the Adviser.
The Trustees reviewed and considered comparative performance data and the Fund's
performance relative to other fixed-income closed-end funds with similar
investment objectives, strategies and policies, its respective benchmark index,
the Lehman Brothers Investment Grade Credit Index and its peer group rankings.
The Trustees also noted their review and evaluation of the Fund's investment
performance on an on-going basis throughout the year. The Trustees considered
the consistency of performance results and the short-term and long-term
performance of the Fund. The Trustees also noted the ability of the Fund to
maintain a consistent dividend and that substantially all of the quarterly
distributions paid out to shareholders were from investment income. They
concluded that the performance of the Fund and the Adviser was within an
acceptable range of performance relative to other fixed-income closed-end funds
with similar investment objectives, strategies and policies.

The Trustees then considered the costs of the services provided by the Adviser,
the compensation and benefits received by the Adviser in providing services to
the Fund, as well as the Adviser's profitability. The Trustees were provided
with and had reviewed the Adviser's financial statements. In addition, the
Trustees considered any direct or indirect revenues received by affiliates of
the Adviser. The Trustees also noted that the Adviser is responsible for paying
the Fund's administrator and accounting services agent. The Trustees were
satisfied that the Adviser's profits were sufficient to continue as a viable
concern generally and as investment adviser of the Fund specifically. The
Trustees concluded that the Adviser's fees and profits (if any) derived from its
relationship with the Fund in light of the Fund's expenses were reasonable in
relation to the nature and quality of the services provided, taking into account
the fees charged by other investment advisers for managing comparable funds with
similar strategies. The Trustees also concluded that the overall expense ratio
of the Fund was reasonable, taking into account the size of the Fund, the
quality of services provided by the Adviser, and the investment performance of
the Fund.

The Trustees considered the extent to which economies of scale would be realized
relative to fee levels as the Fund grows, and whether the advisory fee levels
reflect these economies of scale for the benefit of shareholders. The Trustees
determined that economies of scale would be achieved at higher asset levels for
the Fund to the benefit of Fund shareholders due to break-points in the advisory
fee. However, the Trustees noted that the opportunity for asset growth was
limited because the Fund is a closed-end fund.

The Trustees considered whether any events have occurred that would constitute a
reason for the Trustees not to renew the Agreement and concluded there were not.
The Independent Trustees also met in executive session outside of the presence
of the Adviser and its representatives to deliberate on the approval of the
Agreement. After consideration of all the factors, and taking into consideration
the information presented during previous meetings of the Board of Trustees, the
Trustees determined that it would be in the best interests of the Fund and its
shareholders to approve the continuation of the Agreement. In arriving at its
decision, the Trustees did not identify any single matter as controlling, but
made their determination in light of all the facts and circumstances.

SHAREHOLDER INFORMATION (UNAUDITED) - CONTINUED
ADDITIONAL INFORMATION REGARDING THE FUND'S TRUSTEES AND OFFICERS

TERM OF OFFICE
POSITION HELD PRINCIPAL OCCUPATION AND
NAME, ADDRESS AND AGE WITH FUND DURING THE PAST 5 YEARS LENGTH OF TIME SERVED
- -------------------------------------------------------------------------------------------------------------------------

W. Thacher Brown* Trustee Former President of MBIA Asset Management LLC Shall serve until the
113 King Street from July 1998 to September 2004; and Former next annual meeting or
Armonk, NY 10504 President of 1838 Investment Advisors, LLC from until his successor is
Born: December 1947 July 1988 to May 2004. qualified. Trustee since
1988

Morris Lloyd, Jr. Trustee Retired; former Development Officer, Trinity Shall serve until the
113 King Street College from April 1996 to June 2002. next annual meeting or
Armonk, NY 10504 until his successor is
Born: September 1937 qualified. Trustee since
Trustee 1989

J. Lawrence Shane Trustee Retired; former Vice Chairman and CFO of Shall serve until the
113 King Street Scott Paper Company until 1992. next annual meeting or
Armonk, NY 10504 until his successor is
Born: January 1935 qualified. Trustee since
Trustee 1974

Suzanne P. Welsh Trustee Vice President for Finance and Treasurer, Shall serve until the
113 King Street Swarthmore College. next annual meeting or
Armonk, NY 10504 until her successor is
Born: March 1953 qualified. Trustee since
2008

Clifford D. Corso* President President and Chief Investment Officer, MBIA Shall serve until death,
MBIA CMC Capital Management Corp.; Managing Director and resignation, or removal.
113 King Street Chief Investment Officer, MBIA Insurance Officer since 2005
Armonk, NY 10504 Corporation; officer of other affiliated entities
Born: October 1961 within the MBIA Asset Management Group.

Marc D. Morris* Treasurer Director of MBIA Capital Management Corp.; Shall serve until death,
MBIA CMC Director and officer of other affiliated entities resignation, or removal.
113 King Street within the MBIA Asset Management Group. Officer since 2005
Armonk, NY 10504
Born: March 1959

Leonard I. Chubinsky* Secretary Deputy General Counsel of MBIA Insurance Shall serve until death,
MBIA CMC Corporation; officer of other affiliated entities resignation, or removal.
113 King Street within the MBIA Asset Management Group. Officer since 2005
Armonk, NY 10504
Born: December 1948

Richard J. Walz* Chief Officer of several affiliated entities within the Shall serve until death,
MBIA CMC Compliance MBIA Asset Management Group. resignation, or removal.
113 King Street Officer Officer since 2005
Armonk, NY 10504
Born: April 1959

SHAREHOLDER INFORMATION (UNAUDITED) - CONTINUED

Robert T. Claiborne* Vice President Officer of MBIA Capital Management Corp. Shall serve until death,
MBIA CMC resignation, or removal.
113 King Street Officer since 2006
Armonk, NY 10504
Born: August 1955

Gautam Khanna* Vice President Officer of MBIA Capital Management Corp. Shall serve until death,
MBIA CMC resignation, or removal.
113 King Street Officer since 2006
Armonk, NY 10504
Born: October 1969

* Denotes a trustee/officer who is an "interested person" of the Fund as
defined under the provisions of the Investment Company Act of 1940. Mr.
Brown is an "interested person" because he has an interest in MBIA Inc.,
the parent of the Fund's Investment Adviser. Messrs. Corso, Morris,
Chubinsky, Walz, Claiborne and Khanna are "interested persons" by virtue
of being employees of the Fund's Investment Adviser.

HOW TO GET INFORMATION REGARDING PROXIES

The Fund has adopted the Adviser's proxy voting policies and procedures to
govern the voting of proxies relating to the voting securities of the Fund. You
may obtain a copy of these proxy voting procedures, without charge, by calling
(800) 765-6242 or on the Securities and Exchange Commission website at
www.sec.gov.

Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available,
without charge, by calling (800) 765-6242 or on the SEC's website at
www.sec.gov.

QUARTERLY STATEMENT OF INVESTMENTS

The Fund files a complete statement of investments with the Security and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
website at www.sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, D.C. Information

DIVIDEND REINVESTMENT PLAN

The Fund has established a plan for the automatic investment of dividends and
distributions pursuant to which dividends and capital gain distributions to
shareholders will be paid in or reinvested in additional shares of the Fund. All
shareholders of record are eligible to join the Plan. PFPC Inc. acts as the
agent (the "Agent") for participants under the Plan.

Shareholders whose shares are registered in their own names may elect to
participate in the Plan by completing an authorization form and returning it to
the Agent. Shareholders whose shares are held in the name of a broker or nominee
should contact such broker or nominee to determine whether or how they may
participate in the Plan.

SHAREHOLDER INFORMATION (UNAUDITED) - CONTINUED

Dividends and distributions are reinvested under the Plan as follows. If the
market price per share on the Friday before the payment date for the dividend or
distribution (the "Valuation Date"), plus the brokerage commissions applicable
to one such share, equals or exceeds the net asset value per share on that date,
the Fund will issue new shares to participants valued at the net asset value or,
if the net asset value is less than 95% of the market price on the Valuation
Date, then valued at 95% of the market price. If net asset value per share on
the Valuation Date exceeds the market price per share on that date, plus the
brokerage commissions applicable to one such share, the Agent will buy shares on
the open market, on the New York Stock Exchange, for the participants' accounts.
If before the Agent has completed its purchases, the market price exceeds the
net asset value of shares, the average per share purchase price paid by the
Agent may exceed the net asset value of shares, resulting in the acquisition of
fewer shares than if the dividend or distribution has been paid in shares issued
by the Fund at net asset value.

There is no charge to participants for reinvesting dividends or distributions
payable in either shares or cash. The Agent's fees for handling of reinvestment
of such dividends and distributions will be paid by the Fund. There will be no
brokerage charges with respect to shares issued directly by the Fund as a result
of dividends or distributions payable either in shares or cash. However, each
participant will be charged by the Agent a pro rata share of brokerage
commissions incurred with respect to Agent's open market purchases in connection
with the reinvestment of dividends or distributions payable only in cash.

For purposes of determining the number of shares to be distributed under the
Plan, the net asset value is computed on the Valuation Date and compared to the
market value of such shares on such date. The Plan may be terminated by a
participant by delivery of written notice of termination to the Agent at the
address shown below. Upon termination, the Agent will cause a certificate or
certificates for the full shares held for a participant under the Plan and a
check for any fractional shares to be delivered to the former participant.

Distributions of investment company taxable income that are invested in
additional shares generally are taxable to shareholders as ordinary income. A
capital gain distribution that is reinvested in shares is taxable to
shareholders as long-term capital gain, regardless of the length of time a
shareholder has held the shares or whether such gain was realized by the Fund
before the shareholder acquired such shares and was reflected in the price paid
for the shares.

Plan information and authorization forms are available from PFPC Inc., P.O. Box
43027, Providence, RI 02940-3027.

The privacy of your personal financial information is extremely important to us.
When you open an account with us, we collect a significant amount of information
from you in order to properly invest and administer your account. We take very
seriously the obligation to keep that information private and confidential, and
we want you to know how we protect that important information.

We collect nonpublic personal information about you from applications or other
forms you complete and from your transactions with us or our affiliates. We do
not disclose information about you, or our former clients, to our affiliates or
to service providers or other third parties, except as permitted by law. We
share only the minimum information required to properly administer your
accounts, which enables us to send transaction confirmations, monthly or
quarterly statements, financials and tax forms. Even within MBIA-CMC and its
affiliated entities, only a limited number of people who actually service
accounts will ever have access to your personal financial information. Further,
we do not share information about our current or former clients with any outside
marketing groups or sales entities.

SHAREHOLDER INFORMATION (UNAUDITED) -- CONTINUED

To ensure the highest degree of security and confidentiality, MBIA-CMC and its
affiliates maintain various physical, electronic and procedural safeguards to
protect your personal information. We also apply special measures for
authentication of information you request or submit to us on our Web site -
www.MBIA.com.

NOTICE

The Fund's Audit Committee adopted an audit committee charter on September 10,
2003. A copy of the audit committee charter was included as Appendix A to the
Fund's proxy statement filed with the U.S. Securities and Exchange Commission in
May, 2004, which is available on the SEC website: www.sec.gov. A copy of the
Fund's audit committee charter is also available to shareholders, free of
charge, upon request by calling the Fund at 800-331-1710.

ANNUAL CERTIFICATION

The Fund's CEO has submitted to the NYSE the required annual certification, and
the Fund also has included the certifications of the Fund's CEO and CFO required
by Section 302 of the Sarbanes-Oxley Act of 2002 in the Fund's Forms N-CSR filed
with the Securities and Exchange Commission for the period of this report.

- --------------------------------------------------------------------------------

HOW TO GET ASSISTANCE WITH SHARE TRANSFER OR DIVIDENDS

Contact Your Transfer Agent, PFPC Inc.,
P.O. Box 43027, Providence, RI 02940-3027, or call 1-800-331-1710

- --------------------------------------------------------------------------------

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TRUSTEES
------------------------
W. THACHER BROWN
MORRIS LLOYD, JR.
J. LAWRENCE SHANE
SUZANNE P. WELSH

OFFICERS
------------------------
CLIFFORD D. CORSO
PRESIDENT
MARC D. MORRIS
TREASURER
LEONARD CHUBINSKY
SECRETARY
RICHARD WALZ
CHIEF COMPLIANCE OFFICER
ROBERT T. CLAIBORNE
VICE PRESIDENT
GAUTAM KHANNA
VICE PRESIDENT

INVESTMENT ADVISER
------------------------
MBIA CAPITAL MANAGEMENT CORP.
113 KING STREET
ARMONK, NY 10504

CUSTODIAN
------------------------
PFPC TRUST COMPANY
8800 TINICUM BOULEVARD
PHILADELPHIA, PA 19153

TRANSFER AGENT
------------------------
PFPC INC.
P.O. BOX 43027
PROVIDENCE, RI 02940-3027
1-800-331-1710

COUNSEL
------------------------
PEPPER HAMILTON LLP
3000 TWO LOGAN SQUARE
EIGHTEENTH & ARCH STREETS
PHILADELPHIA, PA 19103

INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
------------------------
TAIT, WELLER & BAKER LLP
1818 MARKET STREET
SUITE 2400
PHILADELPHIA, PA 19103

RIVUS
Managed by MBIA

ANNUAL REPORT
MARCH 31, 2008

ITEM 2. CODE OF ETHICS.

The Registrant has adopted a code of ethics (the "Code of Ethics") that applies
to its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions. A
copy of the Registrant's Code of Ethics can be obtained without charge, upon
request, by calling the Registrant at 1-800-331-1710.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees of the registrant has determined that J. Lawrence Shane,
the Chairman of the Board's Audit Committee, and Suzanne P. Welsh possess the
technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to
each qualify as an "audit committee financial expert," and has designated Mr.
Shane and Ms. Welsh as the Audit Committee's financial experts. Mr. Shane and
Ms. Welsh are both "independent" Trustees pursuant to paragraph (a)(2) of Item 3
to Form N-CSR. Under applicable securities laws, a person who is determined to
be an audit committee financial expert will not be deemed an "expert" for any
purpose, including without limitation for the purposes of Section 11 of the
Securities Act of 1933, as a result of being designated or identified as an
audit committee financial expert. The designation or identification of a person
as an audit committee financial expert does not impose on such person any
duties, obligations, or liabilities that are greater than the duties,
obligations, and liabilities imposed on such person as a member of the audit
committee and Board of Trustees in the absence of such designation or
identification.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$17,300 and $16,400 for the fiscal years ended March 31, 2008 and
March 31, 2007, respectively.

AUDIT-RELATED FEES

(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 and $0 for the fiscal years ended March 31, 2008 and March
31, 2007, respectively.

TAX FEES

(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $2,700 and $2,600 for the
fiscal years ended March 31, 2008 and March 31, 2007, respectively.

ALL OTHER FEES

(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0 and $0 for the fiscal years ended March 31, 2008 and March 31,
2007, respectively.

(e)(1) The registrant's audit committee has adopted policies and procedures
relating to the pre-approval of services provided by the registrant's
principal accountant (the "Pre-Approval Policies"). The Pre-Approval
Policies establish a framework intended to assist the audit committee
in the proper discharge of its pre-approval responsibilities. As a
general matter, the Pre-Approval Policies (i) specify certain types of
audit, audit-related, tax, and other services determined to be
pre-approved by the audit committee; and (ii) delineate specific
procedures governing the mechanics of the pre-approval process,
including the approval and monitoring of audit and non-audit service
fees. Unless a service is specifically pre-approved under the
Pre-Approval Policies, it must be separately pre-approved by the audit
committee.

(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are
as follows:

(b) N/A

(d) N/A

(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was less than fifty percent.

(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant was $0 and $0 for the fiscal years ended March 31, 2008
and March 31, 2007, respectively.

(h) Not applicable.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

The registrant has a separately designated audit committee consisting of all the
independent trustees of the registrant. The members of the audit committee are:
Morris Lloyd, Jr., J. Lawrence Shane and Suzanne P. Welsh.

ITEM 6. INVESTMENTS.

(a) Schedule of Investments in securities of unaffiliated issuers as of
the close of the reporting period is included as part of the report to
shareholders filed under Item 1 of this form.

(b) Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

PROXY VOTING POLICY

MBIA CAPITAL MANAGEMENT CORP.

INTRODUCTION

This Proxy Voting Policy ("Policy") for MBIA Capital Management Corp.
("MBIA-CMC") reflects our duty as a fiduciary under the Investment Advisers Act
of 1940 (the "Advisers Act") to vote proxies in the best interests of our
clients. In addition, the Department of Labor views the fiduciary act of
managing ERISA plan assets to include the voting of proxies. Proxy voting
decisions must be made solely in the best interests of the pension plan's
participants and beneficiaries. The Department of Labor has interpreted this
requirement as prohibiting a fiduciary from subordinating the retirement income
interests of participants and beneficiaries to unrelated objectives. The
guidelines in this Policy have been formulated to ensure decision-making
consistent with these fiduciary responsibilities.

Any general or specific proxy voting guidelines provided by an advisory
client or its designated agent in writing will supersede the specific guidelines
in this Policy. MBIA-CMC will disclose to our advisory clients information about
this Policy as well as disclose to our clients how they may obtain information
on how we voted their proxies. Additionally, MBIA will maintain proxy voting
records for our advisory clients consistent with the Advisers Act. For those of
our clients that are registered investment companies, MBIA-CMC will disclose
this Policy to the shareholders of such funds and make filings with the
Securities and Exchange Commission and make available to fund shareholders the
specific proxy votes that we cast in shareholder meetings of issuers of
portfolio securities in accordance with the rules and regulations under the
Investment Company Act of 1940.

Registered investment companies that are advised by MBIA-CMC as well as
certain of our advisory clients: may participate in securities lending programs,
which may reduce or eliminate the amount of shares eligible for voting by
MBIA-CMC in accordance with this Policy if such shares are out on loan and
cannot be recalled in time for the vote.

Implicit in the initial decision to retain or invest in the security of a
corporation is approval of its existing corporate ownership structure, its
management, and its operations. Accordingly, proxy, proposals that would change
the existing status of a corporation will be reviewed carefully and

supported only when it seems clear that the proposed changes are likely to
benefit the corporation and its shareholders. Notwithstanding this favorable
predisposition, management will be assessed on an ongoing basis both in terms of
its business capability and its dedication to the shareholders to ensure that,
our continued confidence remains warranted. If it is determined that management
is acting on its own behalf instead of for the well being of the corporation, we
will vote to support shareholder proposals, unless other mitigating
circumstances are present.

Additionally, situations may arise that involve an actual or-perceived
conflict of interest. For example, we may manage- assets of a pension plan of a
company whose management is soliciting proxies, or a MBIA-CMC employee may have
a close relative who serves as a director or executive of a company that is
soliciting proxies. In all cases, the manner in which we vote proxies must be
based on our clients' best interests and not the product of the conflict.

This Policy and its attendant recommendations attempt to generalize a
complex subject. It should be clearly understood that specific fact situations,
including differing voting practices in jurisdictions outside the United States,
might warrant departure from these guidelines. In such instances, the relevant
facts will be considered, and if a vote contrary to these guidelines is
indicated it will be cast and the reasons therefore recorded in writing.

The provisions of this Policy will be deemed applicable to decisions
similar to voting proxies, such as tendering of securities, voting consents to
corporate actions, and solicitations with respect to fixed income securities,
where MBIA may exercise voting authority on behalf of clients.

Section I of the Policy describes proxy proposals that may be characterized
as routine and lists examples of the types of proposals we would typically
support. Section II of the Policy describes various types of non-routine
proposals and provides general voting guidelines. These non-routine proposals
are categorized as those involving:

A. Social Issues,

B. Financial/Corporate Issues, and

C. Shareholder Rights.

Finally, Section III of the Policy describes the procedures to be followed
casting: a vote pursuant to these guidelines.

SECTION I

ROUTINE MATTERS

Routine proxy proposals, amendments, or resolutions are typically proposed
by management and meet the following criteria:

1. They do not measurably change the structure, management control, or
operation of the corporation.

2. They are consistent with industry standards as well as the corporate laws
of the state of incorporation.

VOTING RECOMMENDATION

MBIA-CMC will normally support the following routine proposals:

1. To increase authorized common shares.

2. To -increase authorized preferred shares as long as there are not
disproportionate voting rights per preferred share.

3. To elect or re-elect Trustees.

4 To appoint or elect auditors.

5. To approve indemnification of Trustees and limitation of Trustees'
liability.

6. To establish compensation levels.

7. To establish employee stock purchase or ownership plans.

8. To set time and location of annual meeting.

SECTION II

NON-ROUTINE PROPOSALS

A. SOCIAL ISSUES

Proposals in this category involve issues of social conscience. They are
typically proposed by shareholders who believe that the corporation's internally
adopted policies are ill advised or misguided.

VOTING RECOMMENDATION

If we have determined that management is generally socially responsible, we will
generally vote against the following shareholder proposals:

1. To enforce restrictive energy policies.

2. To place arbitrary restrictions on military contracting.

3, To bar or place arbitrary restrictions on trade with other countries.

4. To restrict the marketing of controversial products.

5. To limit corporate political activities.

6. 'To bar or restrict charitable contributions.

7. To enforce a general policy regarding human rights based on arbitrary
parameters.

8. To enforce a general policy regarding employment practices based -on
arbitrary parameters.

9. To enforce a general policy regarding animal rights based on arbitrary
parameters.

10. To place arbitrary restrictions on environmental practices.

B. FINANCIAL/CORPORATE ISSUES

Proposals in this category are usually offered by management and seek to
change a corporation's legal, business or financial structure.

VOTING RECOMMENDATION

We will generally vote in favor of the following management proposals provided
the position of current shareholders is preserved or enhanced:

1. To CHANGE the state of incorporation.

2. To approve mergers, acquisitions or dissolution.

3. To institute indenture changes.

4. To change capitalization.

C. SHAREHOLDER RIGHTS

Proposals in this category are made regularly both by management and
shareholders. They can be generalized as involving issues that transfer or
realign board or shareholder voting power.

We typically would oppose any proposal aimed solely at thwarting potential
takeover offers by requiring, for example, super-majority approval. At the same
time, we believe stability and continuity promote profitability. The guidelines
in this area seek to find a middle road, and they are no more than guidelines.
Individual proposals may have to be carefully assessed in the context of their
particular circumstances.

VOTING RECOMMENDATION

We will generally vote for; he following management proposals:

1. To require majority approval of shareholders in acquisitions of a
controlling share in the corporation.

2. To institute staggered board of Trustees.

3. To, require shareholder approval of not more than 66 70% for a proposed
amendment to the corporation's by-laws.

4. To eliminate cumulative voting.

5. To adopt anti-greenmail charter or by-law amendments or to otherwise
restrict a company's ability to make greenmail payments.

6. To create a dividend reinvestment program.

7. To eliminate preemptive rights.

8. To eliminate any other plan or procedure designed primarily to discourage a
takeover or other similar action (commonly known as a "poison pill").

We will generally vote AGAINST the following management proposals:

1. To require greater than 66 2/3% shareholder approval for a proposed
amendment to the corporation's by-laws ("super-majority provisions").

2. To require that an arbitrary fair price be offered to all shareholders that
is derived from a fixed formula ("fair price amendments").

3. To authorize a new class of common stock or preferred stock which may have
more votes per share than the existing common stock.

4. To prohibit replacement of existing members of the board of Trustees.

5. To eliminate shareholder action by written consent without a shareholder
meeting.

6. To allow only the board of Trustees to call a shareholder meeting or to
propose amendments to the articles of incorporation.

7. To implement any other action or procedure designed primarily to discourage
a takeover or other similar action (commonly known. as a "poison pill").

8. To limit the ability of shareholders to nominate Trustees.

We will generally vote for the following shareholder proposals:

1. To rescind share purchases rights or require that they be submitted for
shareholder approval, but only if the vote required for approval is not
more than 66 2/3%.

2. To opt out of state anti-takeover laws deemed to be detrimental to the
shareholder.

3. To change the state of incorporation for companies operating under the
umbrella of anti-shareholder state corporation laws if another state is
chosen with favorable laws in this and other areas.

4. To eliminate any other plan or procedure designed primarily to discourage a
takeover or other similar action.

5. To permit shareholders to participate in formulating management's proxy and
the opportunity to discuss and evaluate management's director nominees,
and/or to nominate shareholder nominees to the board

6. To require that the board's audit, compensation, and/or nominating
committees be comprised exclusively of independent Trustees.

7. To adopt anti-greenmail charter or by-law amendments or otherwise restrict
a company's ability to make greenmail payments.

8. To create a dividend reinvestment program.

9. To recommend that votes to "abstain" not be considered votes "cast" at an
annual meeting or special meeting, unless required by state, law.

10. To require that "golden parachutes" be submitted for shareholder
ratification.

We will generally vote against the following shareholder proposals:

1. To restore preemptive rights.

2, To restore cumulative voting.

3. To require annual election of Trustees or to specify tenure.

4. To eliminate a staggered board of Trustees.

5. To require confidential voting.

6. To require Trustees to own a minimum amount of company stock in order to
qualify as a director or to remain on the board.

7. To dock director pay for failing to attend board meetings.

SECTION III

VOTING PROCESS

MBIA-CMC will designate a portfolio manager (the Proxy Voting Portfolio
Manager), who is responsible for voting proxies for all advisory accounts and
who will generally vote proxies in accordance with these guidelines. In
circumstances in which 1) the subject matter of the vote is not covered by these
guidelines, 2) a material conflict of interest is present or, 3) we believe it
may be necessary, in the best interests of shareholders, to vote contrary to our
general guidelines, the Proxy Voting Portfolio Manager will discuss the matter
with the President and Chief Investment Officer of MBIA-CMC, who will be
responsible for making the definitive determination as to how the proxy matter
will be voted. The President/Chief investment officer may consult with the
General Counsel, the CCO, or other investment personnel in making this
determination.

Any questions regarding this Policy may be directed to the General Counsel of
MBIA-CMC.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

(a)(1) Portfolio Manager:
Robert T. Claiborne, CFA
Director, MBIA Capital Management Corp.
January 2000 - Present
Responsible for day-to-day management of portfolio

Portfolio Manager:
Gautam Khanna, CPA, CFA
Director, MBIA Capital Management Corp.
May 2003 - Present
Responsible for day-to-day management of portfolio
Prior to joining MBIA, Mr. Khanna was an analyst with
TimesSquare Capital in NY, NY.

(a)(2)(i) Robert T. Claiborne, CFA
(ii) (A) Registered investment companies - $0 as of March 31, 2008

(B) Other pooled investment vehicles - $0 as of March 31, 2008

(C) Other Accounts - CDOs - 3 as of March 31, 2008.
Approximately $658 million in total assets as of March 31,
2008. The three CDO portfolios are co-managed with another
Portfolio Manager who has no investment responsibilities
for the Rivus Bond Fund.

(iii) None.

(iv) No material conflicts of interests are expected to arise with
the management of the Rivus Bond Fund and the CDO portfolios
as the CDO portfolios have very specific requirements under
the respective Indentures for purchases. Two of the CDO
portfolios are cash portfolios and all are in their
amortization period.

Gautam Khanna - N/A

(a)(3) The Portfolio Managers each receive compensation that is
composed of an annual cash fixed salary, a variable cash
bonus, and long-term incentive compensation comprised of cash
and restricted stock of MBIA Inc. The cash salary level is
adjusted annually. The cash bonus and long term incentive
compensation is determined annually and is based on a
combination of the overall performance of MBIA Inc., the
overall performance of MBIA Asset Management and the
individual Portfolio Managers' contribution to that
performance. Compensation is not based on any specific
performance criteria of any of the portfolios managed.

(a)(4) The Portfolio Managers do not own any equity securities of the
registrant as of March 31, 2008.

(b) N/A. Filing is an annual report.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).

(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Not applicable.

(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(registrant) Rivus Bond Fund
-------------------------------------------------------------------

By (Signature and Title)* /s/ Clifford D. Corso
-------------------------------------------------------
Clifford D. Corso, President
(principal executive officer)

Date May 29, 2008
----------------------------------------------------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By (Signature and Title)* /s/ Clifford D. Corso
-------------------------------------------------------
Clifford D. Corso, President
(principal executive officer)

Date May 29, 2008
----------------------------------------------------------------------------

By (Signature and Title)* /s/ Marc D. Morris
-------------------------------------------------------
Marc D. Morris, Treasurer
(principal financial officer)

Date May 29, 2008
----------------------------------------------------------------------------

* Print the name and title of each signing officer under his or her signature.