Filed by Federated Municipal High Yield Advantage Fund, Inc.
Pursuant to Rule 14a-6 of the Securities Act of 1934
Subject Company: Federated Municipal High Yield Advantage Fund, Inc.
Commission File No. 811-4533
Dear Shareholder:
As discussed in the Proxy Statement that was previously mailed to you, the Board
of Directors of Federated Municipal High Yield Advantage Fund, Inc. (the
"Fund"), a Maryland corporation, approved a proposal to reorganize (the
"Reorganization") the Fund into Federated Municipal High Yield Advantage Fund
(the "Reorganized Fund"), a series of Federated Municipal Income Securities
Trust, a Massachusetts business trust. The purpose of the proposed
Reorganization is to convert the Fund from a Maryland corporation to a
Massachusetts business trust, which will result in tax savings for the
Reorganized Fund.
This proposal has been submitted to Fund shareholders for approval, and Proxy
Statements were mailed on or about September 13, 2006 to Fund shareholders. A
shareholder meeting of the Fund to vote on the proposed Reorganization is
scheduled to occur on October 19, 2006. If Fund shareholders approve the
Reorganization, the number of shares you own and the value of your account will
not change. We urge you to read the Proxy Statement and cast your vote on the
proposal.
According to our records, you currently have share certificate(s) of the Fund
outstanding. We are asking you to surrender your share certificate(s) now, in
the event the Reorganization occurs. This is important because the Fund stopped
issuing, and the Reorganized Fund does not issue, share certificates. Therefore
if you were to redeem or exchange shares represented by certificates previously
issued by the Fund, you would need to return the certificate(s) with your
written request for your redemption or exchange. Because the Reorganized Fund
does not issue share certificates, if the Reorganization is approved, all shares
of the Reorganized Fund will be held in "book entry" (uncertificated) form.
This allows redemptions and exchanges to be processed quickly - without the
delay involved when a certificate has to be returned. Your account statements
will reflect your complete holdings in the Fund prior to the Reorganization and
in the Reorganized Fund if the Reorganization is approved.
For your protection, send your certificate(s) by registered or certified mail,
but do not endorse them. Even though this is currently the procedure for
handling certificated shares, our experience has shown that it is more efficient
for you to deal with your certificates before a reorganization takes place. For
your protection, we recommend that you send the unsigned certificate by
registered or certified mail to:
The Federated Funds
30 Dan Road
Canton, MA 02021
Please call 1-800-245-4700 if you can't locate the certificate or have any
questions regarding the proxy.
Thank you for your cooperation.
Sincerely,
/s/ J. Christopher Donahue
J. Christopher Donahue
President
Federated Municipal High Yield Advantage Fund, Inc.
Federated Municipal High Yield Advantage Fund, Inc. (ICA No. 811-4533) has filed
a proxy statement and other relevant documents concerning the planned
transactions with the United States Securities and Exchange Commission (the
"SEC"). INVESTORS ARE URGED TO READ THE PROXY STATEMENT AND OTHER DOCUMENTS
FILED WITH THE SEC IN CONNECTION WITH THE PLANNED TRANSACTION, OR INCORPORATED
BY REFERENCE INTO THE PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE TRANSACTION AND RELATED MATTERS. Investors will be able
to obtain these documents, and information regarding the participants in the
planned transaction, free of charge at the SEC Web site (www.sec.gov). In
addition, documents filed with the SEC by Federated are available free of charge
at 1-800-341-7400.