Edgar Filing: Calamos Global Dynamic Income Fund

Filed pursuant to Rules 497(c) and (h)
under the Securities Act of 1933, As Amended
File No. 333-142056
PROSPECTUS(CALAMOS INVESTMENTS LOGO)

56,000,000 SHARES
CALAMOS GLOBAL DYNAMIC INCOME FUND
COMMON SHARES OF BENEFICIAL INTEREST
$15.00 PER SHARE

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Investment Objective. Calamos Global Dynamic Income Fund (the "Fund") is a
newly organized, diversified, closed-end management investment company. The
Fund's primary investment objective is to generate a high level of current
income, with a secondary objective of capital appreciation.

Portfolio Contents. Under normal circumstances, the Fund will invest
primarily in a globally diversified portfolio of convertible instruments, common
and preferred stocks, and income-producing securities such as investment grade
and below investment grade (high yield/high risk) debt securities. The Fund,
under normal circumstances, will invest at least 40% of its managed assets in
securities of foreign issuers in developed and emerging markets, including debt
and equity securities of corporate issuers and debt securities of government
issuers. "Managed assets" means the total assets of the Fund (including any
assets attributable to any leverage that may be outstanding) minus the sum of
accrued liabilities (other than debt representing financial leverage). For this
purpose the liquidation preference on any preferred shares will not constitute a
liability. Below investment grade (high yield/high risk) securities are rated Ba
or lower by Moody's Investors Service, Inc. ("Moody's") or BB or lower by
Standard & Poor's Corporation, a division of The McGraw-Hill Companies
("Standard & Poor's"), or are unrated securities of comparable quality as
determined by the Fund's investment adviser. The Fund may not invest in debt
securities that are rated lower than C. Below investment grade securities are
commonly referred to as "junk bonds" and are considered speculative with respect
to the issuer's capacity to pay interest and repay principal. They involve
greater risk of loss, are subject to greater price volatility and are less
liquid, especially during periods of economic uncertainty or change, than higher
rated securities. There can be no assurance that the Fund will achieve its
investment objective.

Investment Adviser. Calamos Advisors LLC ("Calamos") is the Fund's
investment adviser. See "Management of the Fund."

NO PRIOR HISTORY. BECAUSE THE FUND IS NEWLY ORGANIZED, ITS COMMON SHARES
HAVE NO HISTORY OF PUBLIC TRADING. SHARES OF CLOSED-END FUNDS FREQUENTLY TRADE
AT A DISCOUNT FROM THEIR NET ASSET VALUE. THE RISK OF LOSS DUE TO A MARKET
DISCOUNT MAY BE GREATER FOR INITIAL INVESTORS EXPECTING TO SELL THEIR SHARES IN
A RELATIVELY SHORT PERIOD AFTER COMPLETION OF THE PUBLIC OFFERING. The common
shares have been authorized for listing on the New York Stock Exchange under the
symbol "CHW," subject to official notice of issuance.

INVESTING IN THE FUND'S COMMON SHARES INVOLVES RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 32 OF THIS PROSPECTUS.

Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.

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Per Share Total(3)
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Public offering price....................................... $15.000 $840,000,000
Sales load(1)............................................... $ 0.675 $ 37,800,000
Proceeds, after expenses, to the Fund(2).................... $ 14.295 $800,520,000

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(1) Calamos has agreed to pay from its own assets a structuring fee to each
of Wachovia Capital Markets, LLC and Citigroup Global Markets Inc.
Calamos has agreed to pay from its own assets a sales incentive fee to
each of H&R Block Financial Advisors, Inc. and RBC Capital Markets
Corporation. See "Underwriting."

(2) Total organizational expenses and offering costs (other than the sales
load) are estimated to be $1,680,000 or $0.03 per share. Calamos has
agreed to pay organizational expenses and offering costs (other than
sales load) that exceed $0.03 per share.

(3) The Fund has granted the underwriters an option to purchase up to
7,665,000 additional common shares at the public offering price less the
sales load, solely to cover over-allotments, if any. If such option is
exercised in full, the total public offering price, sales load, estimated
organizational expenses and offering costs and proceeds to the Fund will
be $954,975,000, $42,973,875, $1,909,950 and $910,091,175, respectively.
See "Underwriting."

The underwriters expect to deliver the common shares to purchasers on or about
June 29, 2007.

WACHOVIA SECURITIES CITI

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ROBERT W. BAIRD & CO. BB&T CAPITAL MARKETS
H&R BLOCK FINANCIAL ADVISORS, INC. CROWELL, WEEDON & CO.
DOFT & CO., INC. FERRIS, BAKER WATTS
INCORPORATED
JANNEY MONTGOMERY SCOTT LLC MORGAN KEEGAN & COMPANY, INC.
RBC CAPITAL MARKETS RYAN BECK & CO.
SOUTHWEST SECURITIES STIFEL NICOLAUS
WEDBUSH MORGAN SECURITIES INC. WELLS FARGO SECURITIES

The date of this prospectus is June 26, 2007.

LEVERAGE. The Fund may, but is not required to, issue preferred shares,
borrow money or issue debt securities. Those practices are known as leverage.
The Fund currently anticipates that it will issue cumulative preferred shares,
as soon as practicable after the closing of this offering, with an aggregate
liquidation preference of up to approximately 33% of the Fund's total assets
immediately after issuance. As a non-fundamental policy, the aggregate
liquidation preference of preferred shares and principal amount of borrowings
and debt securities may not exceed 38% of the Fund's total assets. The Fund may
not be leveraged at all times and the amount of leverage, if any, may vary
depending upon a variety of factors, including Calamos' outlook for the market
and the costs that the Fund would incur as a result of such leverage. The use of
preferred shares, borrowing or debt securities to leverage the common shares
creates risks. See "Risk Factors -- Leverage Risk" beginning on page 34 of this
prospectus.

You should read this prospectus, which contains important information about
the Fund, before deciding whether to invest in the Fund's common shares, and
retain it for future reference. A statement of additional information, dated
June 26, 2007, containing additional information about the Fund, has been filed
with the Securities and Exchange Commission (the "Commission") and is
incorporated by reference in its entirety into this prospectus. You may request
a free copy of the statement of additional information, the table of contents of
which is on page 61 of this prospectus, by calling 1.800.582.6959 or by writing
to the Fund. You can review and copy documents the Fund has filed at the
Commission's Public Reference Room in Washington, D.C. Call 1.202.942.8090 for
information. The Commission charges a fee for copies. You can get the same
information free from the Commission's EDGAR database on the Internet
(http://www.sec.gov). You may also e-mail requests for these documents to
publicinfo@sec.gov or make a request in writing to the Commission's Public
Reference Section, Washington, D.C. 20549-0102.

The Fund's common shares do not represent a deposit or obligation of, and
are not guaranteed or endorsed by, any bank or other insured depository
institution and are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board or any other government agency.

The underwriters may also purchase up to an additional 7,665,000 common
shares at the public offering price, less the sales load, within 45 days from
the date of this prospectus to cover over-allotments.

TABLE OF CONTENTS

PAGE
----

Prospectus Summary...................................................... 1
Summary of Fund Expenses................................................ 18
The Fund................................................................ 19
Use of Proceeds......................................................... 20
Investment Objective and Principal Investment Strategies................ 21
Leverage................................................................ 29
Interest Rate Transactions.............................................. 31
Risk Factors............................................................ 32
Management of the Fund.................................................. 41
Dividends and Distributions; Automatic Dividend Reinvestment Plan....... 43
Closed-End Fund Structure............................................... 47
U.S. Federal Income Tax Matters......................................... 48
Net Asset Value......................................................... 50
Description of Shares................................................... 50
Certain Provisions of the Agreement and Declaration of Trust and By-
Laws.................................................................. 52
Underwriting............................................................ 54
Custodian, Transfer Agent and Dividend Disbursing Agent................. 60
Legal Opinions.......................................................... 60
Table of Contents for Statement of Additional Information............... 61

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YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS. WE HAVE NOT, AND THE UNDERWRITERS HAVE NOT, AUTHORIZED ANY
OTHER PERSON TO PROVIDE YOU WITH DIFFERENT INFORMATION. IF ANYONE PROVIDES YOU
WITH DIFFERENT OR INCONSISTENT INFORMATION, YOU SHOULD NOT RELY ON IT. WE ARE
NOT, AND THE UNDERWRITERS ARE NOT, MAKING AN OFFER TO SELL THESE SECURITIES IN
ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. YOU SHOULD NOT ASSUME
THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE
OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS. WE WILL ADVISE INVESTORS OF
ANY MATERIAL CHANGES TO THE EXTENT REQUIRED BY APPLICABLE LAW.

Until July 21, 2007 (25 days after the date of this prospectus), all dealers
that buy, sell or trade the common shares, whether or not participating in this
offering, may be required to deliver a prospectus. This is in addition to the
dealers' obligation to deliver a prospectus when acting as underwriters and with
respect to their unsold allotments or subscriptions.

PROSPECTUS SUMMARY

This is only a summary. This summary may not contain all of the information
that you should consider before investing in the Fund's common shares. You
should review the more detailed information contained in this prospectus and in
the statement of additional information, especially the information set forth
under the heading "Risk Factors."

THE FUND....................Calamos Global Dynamic Income Fund is a newly
organized, diversified, closed-end management
investment company. Throughout the prospectus, we
refer to Calamos Global Dynamic Income Fund as the
"Fund" or as "we," "us," or "our." See "The Fund."

THE OFFERING................The Fund is offering common shares of beneficial
interest ("common shares") at an initial offering
price of $15.00 per share. The common shares are
being offered by a group of underwriters led by
Wachovia Capital Markets, LLC and Citigroup Global
Markets Inc. You must purchase at least 100 common
shares ($1,500) in order to participate in the
offering. The Fund has granted the underwriters the
right to purchase up to an additional 7,665,000
common shares at the public offering price, less the
sales load, within 45 days from the date of this
prospectus to cover over-allotments. Calamos has
agreed to pay organizational expenses and offering
costs (other than sales load) that exceed $0.03 per
share. See "Underwriting."

INVESTMENT OBJECTIVE........The Fund's primary investment objective is to
generate a high level of current income, with a
secondary objective of capital appreciation. There
can be no assurance that the Fund will achieve its
investment objective. See "Investment Objective and
Principal Investment Strategies -- Investment
Objective."

INVESTMENT POLICIES.........PRIMARY INVESTMENTS. Under normal circumstances, the
Fund will invest primarily in a globally diversified
portfolio of convertible securities, common and
preferred stocks, and income-producing securities
such as investment grade and below investment grade
(high yield/high risk) debt securities. The Fund may
use other income-producing strategies, including
options, swaps and other derivative instruments, for
both investment and hedging purposes. The Fund,
under normal circumstances, will invest at least 40%
of its managed assets in securities of foreign
issuers in developed and emerging markets, including
debt and equity securities of corporate issuers and
debt securities of government issuers. "Managed
assets" means the total assets of the Fund
(including any assets attributable to any leverage
that may be outstanding) minus the sum of accrued
liabilities (other than debt representing financial
leverage). For this purpose the liquidation
preference on any preferred shares will not
constitute a liability.

The Fund seeks to maintain a balanced approach to
geographic portfolio diversification. The Fund may
invest up to 100% of its managed assets in
securities of foreign issuers, including debt and
equity securities of corporate issuers and debt
securities of government issuers, in developed and
emerging markets.

The Fund will use a number of investment strategies
to achieve its objective and expects to invest in a
wide variety of financial

instruments. These instruments include global
convertible, as well as "synthetic" convertible
instruments. The Fund will also invest in global
equities or equity-linked securities with high
income potential. From time to time, the Fund
expects to invest in Rule 144A securities, foreign
exchange contracts or securities with imbedded
foreign exchange hedges, and high yield bonds of
companies rated BB or lower.

Initially, and depending on market conditions and
prevailing economic trends, the Fund intends to
allocate its assets in the following manner: 50% of
managed assets in equity securities; 25% of managed
assets in fixed income securities (including debt
and high yield securities); and 25% of managed
assets in alternative strategies (including
convertible hedging and swaps and related swap
products). The Fund does not seek to maintain any
target allocation among asset classes and, at any
time, its allocation among asset classes and
strategies may vary significantly from the initial
allocation.

FOREIGN ISSUERS. The Fund may invest up to 100% of
its managed assets in securities of foreign issuers
in developed and emerging markets, including debt
and equity securities of corporate issuers and debt
securities of government issuers. A foreign issuer
is a foreign government or a company organized under
the laws of a foreign country. See "Investment
Objective and Principal Investment
Strategies -- Principal Investment
Strategies -- Foreign Securities."

CONVERTIBLE SECURITIES. The Fund may invest in
convertible securities. A convertible security is a
debt security or preferred stock that is
exchangeable for an equity security (typically of
the same issuer) at a predetermined price (the
"conversion price"). Depending upon the relationship
of the conversion price to the market value of the
underlying security, a convertible security may
trade more like an equity security than a debt
instrument. See "Investment Objective and Principal
Investment Strategies -- Principal Investment
Strategies -- Convertible Securities."

The Fund may also invest in synthetic convertible
securities created by third parties, typically
investment banks. Synthetic

convertible securities created by such parties may
be designed to simulate the characteristics of
traditional convertible securities or may be
designed to alter or emphasize a particular feature.
Traditional convertible securities typically offer
stable cash flows with the ability to participate in
capital appreciation of the underlying common stock.
Because traditional convertible securities are
exercisable at the option of the holder, the holder
is protected against downside risk. Synthetic
convertible securities may alter these
characteristics by offering enhanced yields in
exchange for reduced capital appreciation or less
downside protection, or any combination of these
features. Synthetic convertible instruments may
include structured notes, equity-linked notes,
mandatory convertibles and combinations of
securities and instruments, such as a debt
instrument combined with a forward contract. See
"Investment Objective and Principal Investment
Strategies -- Principal Investment
Strategies -- Synthetic Convertible Securities."

CONVERTIBLE HEDGING. The Fund may enhance income and
protect against market risk by hedging a portion of
the equity risk inherent in the convertible
securities purchased for the Fund. This hedging is
achieved by selling short some or all of the common
stock issuable upon exercise of the convertible
security. If the market price of the common stock
increases above the conversion price on the
convertible security, the price of the convertible
security will increase. The Fund's increased
liability on the short position would, in whole or
in part, reduce this gain. If the price of the
common stock declines, any decline in the price of
the convertible security would offset, in whole or
in part, the Fund's gain on the short position. The
Fund profits from this strategy by receiving
interest and/or dividends on the convertible
security and by adjusting the amount of equity risk
that is hedged by short sales. In determining the
appropriate portion of the Fund's equity exposure to
hedge, Calamos may consider the general outlook for
interest rates and equity markets, the availability
of stock to sell short and expected returns and
volatility. See "Investment Objective and Principal
Investment Strategies -- Principal Investment
Strategies -- Short Sales."

HIGH YIELD SECURITIES. The Fund may invest in high
yield securities for either current income or
capital appreciation or both. These securities are
rated Ba or lower by Moody's or BB or lower by
Standard & Poor's or are unrated securities of
comparable quality as determined by Calamos, the
Fund's investment adviser. The Fund may not invest
in debt securities rated lower than C. Non-
convertible debt securities rated below investment
grade are commonly referred to as "junk bonds" and
are considered speculative with respect to the
issuer's capacity to pay interest and repay
principal. They involve greater risk of loss, are
subject to greater price volatility and are less
liquid, especially during periods of economic
uncertainty or change, than higher rated securities.
See "Investment Objective and Principal Investment
Strategies -- Principal Investment
Strategies -- High Yield Securities."

OPTIONS. The Fund may also seek to generate income
from option premiums by writing (selling) options.
The Fund may write (sell) call options (i) on a
portion of the equity securities (including
securities that are convertible into equity
securities) in the Fund's portfolio and (ii) on
broad-based securities indices (such as the S&P 500
or MSCI EAFE) or certain ETFs (exchange-traded
funds) that trade like common stocks but seek to
replicate such market indices. The Fund may purchase
put or call options on stocks, indices, rates,
credit spreads or currencies. The Fund may also sell
call or put options on single stocks, credits or
indices for hedging purposes. As the Fund writes
covered calls over more of its portfolio, its
ability to benefit from capital appreciation becomes
more limited and the risk of net asset value erosion
increases. If the Fund experiences net asset value
erosion, which itself may have an indirect negative
effect on the market price of the Fund's shares, the
Fund will have a reduced asset base over which to
write covered calls, which may eventually lead to
reduced distributions to shareholders. See
"Investment Objective and Principal Investment
Strategies -- Principal Investment
Strategies -- Options."

SHORT SALES. The Fund may engage in short sales of
securities. When the Fund takes a short position, it
sells at the current market price a stock that it
does not own and has borrowed in anticipation of a
decline in the value of the stock. To complete, or
close out, the short sale transaction, the Fund buys
the same security in the market and returns it to
the lender. The Fund makes money if the market price
of the borrowed security goes down and the Fund is
able to replace the security for less than it earned
by selling short. The Fund loses money if the stock
price goes up after the short sale and before the
position is closed out. The Fund will enter into
short sales only with respect to common stock that
it owns or that is issuable upon conversion of
convertible securities held by the Fund. See
"Investment Objective and Principal Investment
Strategies -- Principal Investment
Strategies -- Short Sales."

SWAPS AND RELATED SWAP PRODUCTS. The Fund may engage
in various swap transactions. Swap agreements are
two party contracts entered into primarily by
institutional investors for periods ranging
typically from three to ten years, although shorter
or longer periods do exist. Swap transactions will
be based on financial assets including interest
rates, currencies, securities indices, securities
baskets, specific securities, fixed income sectors,
commodity swaps, asset-backed swaps, interest rate
caps, floors and collars and options on interest
rate swaps (collectively defined as "swap
transactions").

The Fund may enter into swap transactions for any
legal purpose consistent with its investment
objective and policies, such as for the purpose of
attempting to obtain or preserve a particular return
or spread at a lower cost than obtaining that return
or spread through purchases and/or sales of
instruments in cash markets, to protect against
currency fluctuations, to protect against any
increase in the price of securities the Fund
anticipates purchasing at a later date, or to gain
exposure to certain markets in the most economical
way possible. The Fund intends to use swaps to a
significant degree, subject to the asset coverage
requirements of the Investment Company Act of 1940,
as amended (the"1940 Act"), and the Internal Revenue
Code of 1986, as amended. See "Investment Objective
and Principal Investment Strategies -- Principal
Investment Strategies -- Swap and Related Swap
Products."

CREDIT DEFAULT SWAPS. The Fund may also engage in
credit default swap transactions. In the case of a
credit default swap ("CDS"), the contract gives one
party (the buyer) the right to recoup the economic
value of a decline in the value of debt securities
of the reference issuer if the credit event
(including default or restructuring) occurs. This
value is obtained by delivering a debt security of
the reference issuer to the party in return for a
previously agreed payment from the other party
(frequently, the par value of the debt security) or
by cash settlement of the transaction. See
"Investment Objective and Principal Investment
Strategies -- Principal Investment
Strategies -- Credit Default Swaps."

The Fund may also enter into contracts based on
baskets or indices of securities ("CDX"). Credit
default swaps may require initial premium (discount)
payments as well as periodic payments (receipts)
related to the interest leg of the swap or to the
default of a reference obligation.

OTHER SECURITIES. The Fund may invest in other
securities of various types to the extent consistent
with its investment objectives. Normally, the Fund
invests substantially all of its assets to meet its
investment objective. For temporary defensive
purposes, the Fund may depart from its principal
investment strategies and invest part or all of its
assets in securities with remaining maturities of
less than one year or cash equivalents, or may hold
cash. During such periods, the Fund may not be able
to achieve its investment objective. See "Investment
Objective and Principal Investment
Strategies -- Principal Investment Strategies."

USE OF LEVERAGE BY THE
FUND........................The Fund may, but is not required to, use leverage
by issuing preferred shares, borrowing money or
issuing debt securities. The Fund currently
anticipates that it will issue cumulative preferred
shares, as soon as practicable after the closing of
this offering, with an aggregate liquidation
preference of up to approximately 33% of the Fund's
total assets immediately after issuance. As a non-
fundamental policy, the aggregate liquidation
preference of preferred shares and principal amount
of borrowings and debt securities may not exceed 38%
of the Fund's total assets. However, the Fund
reserves the right to issue preferred shares, borrow
or issue debt securities to the extent permitted by
the 1940 Act (50% of total

assets for preferred shares and 33 1/3% of total
assets for borrowing and debt securities). See
"Leverage."

The Fund may not be leveraged at all times and the
amount of leverage, if any, may vary depending upon
a variety of factors, including Calamos' outlook for
the market and the costs that the Fund would incur
as a result of such leverage. Leverage involves
greater risks. The Fund's leveraging strategy may
not be successful. By leveraging its investment
portfolio, the Fund creates an opportunity for
increased net income or capital appreciation.
However, the use of leverage also involves risks,
which can be significant. See "Leverage" and "Risk
Factors -- Leverage."

INTEREST RATE TRANSACTIONS..In order to seek to reduce the interest rate risk
inherent in the Fund's underlying investments and
capital structure, the Fund, if market conditions
are deemed favorable, likely will enter into
interest rate swap or cap transactions to attempt to
protect itself from increasing dividend or interest
expenses on its leverage. The use of interest rate
swaps and caps is a highly specialized activity that
involves investment techniques and risks different
from those associated with ordinary portfolio
security transactions.

In an interest rate swap, the Fund would agree to
pay to the other party to the interest rate swap
(which is known as the "counterparty") a fixed rate
payment in exchange for the counterparty agreeing to
pay to the Fund a payment at a variable rate that is
expected to approximate the rate on any variable
rate payment obligation on the Fund's leverage. The
payment obligations would be based on the notional
amount of the swap.

In an interest rate cap, the Fund would pay a
premium to the counterparty to the interest rate cap
and, to the extent that a specified variable rate
index exceeds a predetermined fixed rate, would
receive from the counterparty payments of the
difference based on the notional amount of such cap.
Depending on the state of interest rates in general,
the Fund's use of interest rate swap or cap
transactions could enhance or harm the overall
performance of the common shares. See "Interest Rate
Transactions."

INVESTMENT ADVISER..........Calamos is the Fund's investment adviser. Calamos is
responsible on a day-to-day basis for investment of
the Fund's portfolio in accordance with its
investment objective and policies. Calamos makes all
investment decisions for the Fund and places
purchase and sale orders for the Fund's portfolio
securities. As of April 30, 2007, Calamos managed
approximately $43.0 billion in assets of individuals
and institutions. Calamos is a wholly-owned
subsidiary of Calamos Holdings LLC ("Holdings") and
an indirect subsidiary of Calamos Asset Management,
Inc., a publicly traded holding company.

The Fund pays Calamos an annual fee, payable
monthly, for its investment management services
equal to 1.00% of the Fund's average weekly managed
assets. "Managed assets" means the total assets of
the Fund (including any assets attributable to any
leverage that may be outstanding) minus the sum of
accrued liabilities

(other than debt representing financial leverage).
See "Management of the Fund."

PORTFOLIO MANAGER...........Calamos employs a team approach to portfolio
management, with teams led by the Co-Chief
Investment Officers (the "Co-CIOs") and comprised
generally of the Co-CIOs, senior strategy analysts,
intermediate analysts and junior analysts. The Co-
CIOs and senior strategy analysts are supported by
and lead a team of investment professionals whose
valuable contributions create a synergy of expertise
that can be applied across many different investment
strategies.

Portfolio holdings are reviewed and trading activity
is discussed on a regular basis by team members.
Team members generally may make trading decisions
guided by the Fund's investment objective and
strategy.

LISTING.....................The common shares have been authorized for listing
on the New York Stock Exchange under the symbol
"CHW," subject to official notice of issuance.

CUSTODIAN, TRANSFER AGENT
AND DIVIDEND DISBURSING
AGENT.......................The Bank of New York will serve as the Fund's
custodian, transfer agent and dividend disbursing
agent. See "Custodian, Transfer Agent and Dividend
Disbursing Agent."

FUND ACCOUNTANT.............State Street Bank and Trust Company ("State Street")
will provide fund accounting and financial
accounting services to the Fund.

MARKET PRICE OF COMMON
SHARES......................Common shares of closed-end investment companies
frequently trade at prices lower than their net
asset value. The Fund's net asset value will be
reduced immediately following this offering by the
sales load and the amount of the organization and
offering expenses paid by the Fund. See "Use of
Proceeds." In addition to net asset value, the
market price of the Fund's common shares may be
affected by such factors as the Fund's use of
leverage, dividend stability, portfolio credit
quality, liquidity, market supply and demand and the
Fund's dividends paid (which are, in turn, affected
by expenses), call protection for portfolio
securities and interest rate movements. See
"Leverage," "Risk Factors" and "Description of
Shares." The Fund's common shares are designed
primarily for long-term investors, and you should
not purchase common shares if you intend to sell
them shortly after purchase.

DIVIDENDS AND
DISTRIBUTIONS...............The Fund currently seeks to make monthly
distributions to common shareholders at a level rate
established by the Board of Trustees. The rate may
be modified by the Board of Trustees from time to
time. Monthly distributions may include net
investment income, net realized short-term capital
gain and, if necessary, return of capital. The Fund
may at times in its discretion pay out less than the
entire amount of net investment income earned in any
particular period and may at times pay out such
accumulated undistributed income in addition to net
investment income earned in other periods in order
to permit the Fund to maintain a more stable level
of distributions. As a result, the dividends paid by
the Fund to holders of common shares for any
particular period may be more or

less than the amount of net investment income earned
by the Fund during such period. Net realized short-
term capital gain distributed to shareholders will
be taxed as ordinary income. In addition, at least
one distribution per calendar year may include net
realized long-term capital gain (if any), which will
be taxed for federal income tax purposes at long-
term capital gain rates. To the extent the Fund
distributes an amount in excess of the Fund's
current and accumulated earnings and profits, if
any, such excess will be treated by a shareholder
for federal income tax purposes as a tax-free return
of capital to the extent of the shareholder's
adjusted tax basis in his, her or its shares and
thereafter as a gain from the sale or exchange of
such shares. There is no guarantee that the Fund
will realize capital gain in any given year.
Pursuant to requirements of the 1940 Act and other
applicable laws, a notice would accompany each
monthly distribution with respect to the estimated
source of the distribution made. Distributions are
subject to re-characterization for federal income
tax purposes after the end of the fiscal year.

In January 2004, Calamos, on behalf of itself and
certain funds that it manages, filed an exemptive
application with the Commission seeking an order
under the 1940 Act facilitating the implementation
of a dividend policy calling for monthly
distributions of a fixed percentage of its net asset
value ("Managed Dividend Policy"). In March 2007, an
amended and restated exemptive application was filed
with the Commission. If, and when, Calamos, on
behalf of itself and other parties, receives the
requested relief, the Fund may, subject to the
determination of its Board of Trustees, implement a
Managed Dividend Policy. Under a Managed Dividend
Policy, if, for any distribution, net investment
income and net realized capital gains were less than
the amount of the distribution, the differences
would be distributed from the Fund's other assets.
There can be no assurance that the Fund will receive
the requested relief.

Pursuant to the Fund's Automatic Dividend
Reinvestment Plan, unless a shareholder is
ineligible or elects otherwise, all dividends and
capital gains distributions on common shares are
automatically reinvested in additional common shares
of the Fund. However, an investor can choose to
receive dividends and distributions in cash. Since
not all investors can participate in the Automatic
Dividend Reinvestment Plan, you should contact your
broker or nominee to confirm that you are eligible
to participate in the plan. See "Dividends and
Distributions; Automatic Dividend Reinvestment
Plan."

RISKS.......................GENERAL. The Fund is a newly organized, diversified,
closed-end management investment company designed
primarily as a long-term investment and not as a
trading tool. The Fund invests in a globally
diversified portfolio of common and preferred stocks
and income-producing securities such as investment
grade and below investment grade debt securities. An
investment in the Fund's common shares may be
speculative and it involves a high degree of risk.
The Fund should not constitute a complete investment
program. Due to the uncertainty in all investments,
there can be no assurance that the Fund will achieve
its investment objective.

NO OPERATING HISTORY. The Fund has no operating
history or history of public trading. See "Risk
Factors -- No Operating History."

MARKET PRICE OF SHARES. Shares of closed-end funds
frequently trade at a market price that is below
their net asset value. This is commonly referred to
as "trading at a discount." This characteristic of
shares of closed-end funds is a risk separate and
distinct from the risk that the Fund's net asset
value may decrease. Investors who sell their shares
within a relatively short period after completion of
the public offering are likely to be exposed to this
risk. Accordingly, the Fund is designed primarily
for long-term investors and should not be considered
a vehicle for trading purposes. Following the
offering, net asset value will be reduced by the
sales load and the amount of organizational and
offering expenses paid by the Fund. Immediately
following any offering of preferred shares, net
asset value will be reduced by the costs of that
offering paid by the Fund. See "Risk
Factors -- Market Price of Shares."

FOREIGN SECURITIES RISK. Investments in non-U.S.
issuers may involve unique risks compared to
investing in securities of U.S. issuers. These risks
are more pronounced to the extent that the Fund
invests a significant portion of its non-U.S.
investments in one region or in the securities of
emerging market issuers. These risks may include:

- less information about non-U.S. issuers or markets
may be available due to less rigorous disclosure
or accounting standards or regulatory practices;

- many non-U.S. markets are smaller, less liquid and
more volatile. In a changing market, Calamos may
not be able to sell the Fund's portfolio
securities at times, in amounts and at prices it
considers reasonable;

- an adverse effect of currency exchange rates or
controls on the value of the Fund's investments;

- the economies of non-U.S. countries may grow at
slower rates than expected or may experience a
downturn or recession;

- economic, political and social developments may
adversely affect the securities markets, including
expropriation and nationalization;

- the difficulty in obtaining or enforcing a court
judgment in non-U.S. countries;

- restrictions on foreign investments in non-U.S.
jurisdictions;

- difficulties in effecting the repatriation of
capital invested in non-U.S. countries; and

- withholding and other non-U.S. taxes may decrease
the Fund's return.

See "Risk Factors -- Foreign Securities Risk."

CURRENCY RISK. The value of the securities
denominated or quoted in foreign currencies may be
adversely affected by fluctuations in

the relative currency exchange rates and by exchange
control regulations. The Fund's investment
performance may be negatively affected by a
devaluation of a currency in which the Fund's
investments are denominated or quoted. See "Risk
Factors -- Currency Risk."

CONVERTIBLE SECURITIES RISK. The value of a
convertible security is influenced by both the yield
of non-convertible securities of comparable issuers
and by the value of the underlying common stock. The
value of a convertible security viewed without
regard to its conversion feature (i.e., strictly on
the basis of its yield) is sometimes referred to as
its "investment value." A convertible security's
investment value tends to decline as prevailing
interest rate levels increase. Conversely, a
convertible security's investment value increases as
prevailing interest rate levels decline.

However, the convertible's market value tends to
reflect the market price of the common stock of the
issuing company when that stock price is greater
than the convertible's "conversion price." The
conversion price is defined as the predetermined
price at which the convertible could be exchanged
for the associated stock. As the market price of the
underlying common stock declines, the price of the
convertible security tends to be influenced more by
the yield of the convertible security. Thus, the
convertible security may not decline in price to the
same extent as the underlying common stock. In the
event of a liquidation of the issuing company,
holders of convertible securities would be paid
before the company's common stockholders.
Consequently, the issuer's convertible securities
generally entail less risk than its common stock.
See "Risk Factors -- Convertible Securities Risk."

SYNTHETIC CONVERTIBLE SECURITIES RISK. The value of
a synthetic convertible security may respond
differently to market fluctuations than a
convertible security because a synthetic convertible
is composed of two or more separate securities or
instruments, each with its own market value. In
addition, if the value of the underlying common
stock or the level of the index involved in the
convertible component falls below the exercise price
of the warrant or option, the warrant or option may
lose all value. See "Risk Factors -- Synthetic
Convertible Securities Risk."

CONVERTIBLE HEDGING/SHORT SALES RISK. The Fund may
incur a loss (without limit) as a result of a short
sale if the market value of the borrowed security
increases between the date of the short sale and the
date the Fund replaces the security. The Fund may be
unable to repurchase the borrowed security at a
particular time or at an acceptable price. If the
market price of the common stock issuable upon
exercise of a convertible security increases above
the conversion price on the convertible security,
the price of the convertible security will increase.
The Fund's increased liability on the short position
would, in whole or in part, reduce this gain. If the
price of the common stock declines, any decline in
the price of the convertible security would offset,
in whole or in part, the Fund's gain on the short
position. The use of short sales could increase the
Fund's exposure to the market, magnify losses and
increase the

volatility of returns. See "Risk
Factors -- Convertible Hedging/Short Sales Risk."

LEVERAGE RISK. Leverage creates risks which may
adversely affect the return for the holders of
common shares, including:

- the likelihood of greater volatility of net asset
value and market price of the Fund's common
shares;

- fluctuations in the dividend rates on any
preferred shares or in interest rates on
borrowings and short-term debt;

- increased operating costs, which are effectively
borne by common shareholders, may reduce the
Fund's total return; and

- the potential for a decline in the value of an
investment acquired with borrowed funds, while the
Fund's obligations under such borrowing remain
fixed.

These risks include the possibility that the value
of the assets acquired with the proceeds of leverage
decreases although the Fund's liability to holders
of preferred shares or other types of leverage is
fixed, greater volatility in the Fund's net asset
value and the market price of the Fund's common
shares, and higher expenses. In addition, the rights
of lenders and the holders of preferred shares and
debt securities issued by the Fund will be senior to
the rights of the holders of common shares with
respect to the payment of dividends or upon
liquidation. Holders of preferred shares will have
voting rights in addition to and separate from the
voting rights of common shareholders. See
"Description of Shares -- Preferred Shares" and
"Certain Provisions of the Agreement and Declaration
of Trust and By-Laws." The holders of preferred
shares, on the one hand, and the holders of the
common shares, on the other, may have interests that
conflict in certain situations.

Leverage is a speculative technique that could
adversely affect the returns to common shareholders.
Leverage can cause the Fund to lose money and can
magnify the effect of any losses. To the extent the
income or capital appreciation derived from
securities purchased with funds received from
leverage exceeds the cost of leverage, the Fund's
return will be greater than if leverage had not been
used. Conversely, if the income or capital
appreciation from the securities purchased with such
funds is not sufficient to cover the cost of
leverage or if the Fund incurs capital losses, the
return of the Fund will be less than if leverage had
not been used, and therefore the amount available
for distribution to common shareholders as dividends
and other distributions will be reduced or
potentially eliminated.

The Fund will pay, and common shareholders will
effectively bear, any costs and expenses relating to
any borrowings and to the issuance and ongoing
maintenance of preferred shares. Such costs and
expenses include the higher management fee resulting
from the use of any such leverage, offering and/or
issuance costs, and interest and/or dividend expense
and ongoing maintenance.

Certain types of borrowings may result in the Fund
being subject to covenants in credit agreements,
including those relating to asset

coverage, borrowing base and portfolio composition
requirements and additional covenants that may
affect the Fund's ability to pay dividends and
distributions on common shares in certain instances
and may affect the Fund's implementation of its
investment strategy. The Fund may also be required
to pledge its assets to the lenders in connection
with certain types of borrowings. The Fund may be
subject to certain restrictions on investments
imposed by guidelines of one or more nationally
recognized statistical rating organizations
("NRSROs") which may issue ratings for the preferred
shares or short-term debt instruments issued by the
Fund. These guidelines may impose asset coverage or
portfolio composition requirements that are more
stringent than those imposed by the 1940 Act. See
"Risk Factors -- Leverage Risk."

HIGH-YIELD SECURITIES RISK. The Fund may invest
without limit in high yield securities for either
current income or capital appreciation or both.
Investment in high yield securities involves
substantial risk of loss. Below investment grade
non-convertible debt securities or comparable
unrated securities are commonly referred to as "junk
bonds" and are considered predominantly speculative
with respect to the issuer's ability to pay interest
and principal and are susceptible to default or
decline in market value due to adverse economic and
business developments. The market values for high
yield securities tend to be very volatile, and those
securities are less liquid than investment grade
debt securities. For these reasons, your investment
in the Fund is subject to the following specific
risks:

- increased price sensitivity to changing interest
rates and to a deteriorating economic environment;

- greater risk of loss due to default or declining
credit quality;

- adverse company specific events are more likely to
render the issuer unable to make interest and/or
principal payments; and

- if a negative perception of the high yield market
develops, the price and liquidity of high yield
securities may be depressed. This negative
perception could last for a significant period of
time.

larger than for higher quality instruments. Under
adverse market or economic conditions, the secondary
market for high yield securities could contract
further, independent of any specific adverse changes
in the condition of a particular issuer, and these
instruments may become illiquid. As a result, the
Fund could find it more difficult to sell those
securities or may be able to sell the securities
only at prices lower than if such securities were
widely traded. Prices realized upon the sale of such
lower rated or unrated securities, under those
circumstances, may be less than the prices used in
calculating the Fund's net asset value. See "Risk
Factors -- High Yield Securities Risk."

The Fund's ability to close out its position as a
purchaser or seller of an Options Clearing
Corporation ("OCC") or exchange listed put or call
option is dependent, in part, upon the liquidity of
the option market. Among the possible reasons for
the absence of a liquid option market on an exchange
are: (i) insufficient trading interest in certain
options; (ii) restrictions on transactions imposed
by an exchange; (iii) trading halts, suspensions or
other restrictions imposed with respect to
particular classes or series of options or
underlying securities, including reaching daily
price limits; (iv) interruption of the normal
operations of the OCC or an exchange; (v) inadequacy
of the facilities of an exchange or the OCC to
handle current trading volume; or (vi) a decision by
one or more exchanges to discontinue the trading of
options (or a particular class or series of
options), in which event the relevant market for
that option on that exchange would cease to exist,
although outstanding options on that exchange would
generally continue to be exercisable in accordance
with their terms. If the Fund were unable to close
out an option that it has purchased on a security,
it would have to exercise the option in order to
realize any profit or the option would expire and
become worthless. If the Fund were unable to close
out a covered call option that it had written on a
security, it would not be able to sell the
underlying security until the option expired. As the
writer of a covered call option on a security, the
Fund foregoes, during the option's life, the
opportunity to profit from increases in the market
value of the security covering the call option above
the sum of the premium and the exercise price of the
call. As the writer of a covered call option on a
foreign currency, the Fund foregoes, during the
option's life, the opportunity to profit from
currency appreciation.

The hours of trading for listed options may not
coincide with the hours during which the underlying
financial instruments are traded. To the extent that
the option markets close before the markets for the
underlying financial instruments, significant price
and rate movements can take place in the underlying
markets that would not have been reflected in the
option markets at their closing.

Unless the parties provide for it, there is no
central clearing or guaranty function in an over-the
counter ("OTC") option. As a result, if the
counterparty in an OTC transaction fails to make or
take delivery of the security, currency or other
instrument underlying an OTC option it has entered
into with the Fund or fails to make a cash
settlement payment due in accordance with the terms
of that option, the Fund will lose any premium it
paid for the option as well as any anticipated
benefit of the transaction. Accordingly, Calamos
must assess the creditworthiness of each such
counterparty or any guarantor or credit enhancement
of the counterparty's credit to determine the
likelihood that the terms of the OTC option will be
satisfied. The Fund will engage in OTC option
transactions only with U.S. government securities
dealers recognized by the Federal Reserve Bank of
New York as "primary dealers" or broker/dealers,
domestic or foreign banks or other financial
institutions which have received (or the guarantors
of the obligation of which have received) a short-
term credit rating of A-1 from Standard & Poor's or
P-1 from Moody's or an equivalent rating from any
NRSRO or, in the case of OTC currency transactions,
are determined to be of equivalent credit quality by
Calamos.

The Fund may purchase and sell call options on
securities indices and currencies. All calls sold by
the Fund must be "covered." Even though the Fund
will receive the option premium to help protect it
against loss, a call sold by the Fund exposes the
Fund during the term of the option to possible loss
of opportunity to realize appreciation in the market
price of the underlying security or instrument and
may require the Fund to hold a security or
instrument which it might otherwise have sold. The
Fund may purchase and sell put options on securities
indices and currencies. In selling put options,
there is a risk that the Fund may be required to buy
the underlying security at a disadvantageous price
above the market price. See "Risk Factors -- Options
Risk."

EQUITY SECURITIES RISK. Equity investments are
subject to greater fluctuations in market value than
many other asset classes as a result of such factors
as the issuer's business performance, investor
perceptions, stock market trends and general
economic conditions. Equity securities are
subordinated to bonds and other debt instruments in
a company's capital structure in terms of priority
to corporate income and liquidation payments. See
"Risk Factors -- Equity Securities Risk."

SWAPS AND RELATED SWAP PRODUCTS RISK. The use of
swap transactions, caps, floors and collars involves
investment techniques and risks that are different
from those associated with portfolio security
transactions. If Calamos is incorrect in its
forecasts of market values, interest rates, and
other applicable factors, the investment

performance of the Fund will be less favorable than
if those techniques had not been used. These
instruments are typically not traded on exchanges.
Accordingly, there is a risk that the other party to
certain of those instruments will not perform its
obligations to the Fund or that the Fund may be
unable to enter into offsetting positions to
terminate its exposure or liquidate its position
under certain of these instruments when it wishes to
do so.

Such occurrences could result in losses to the Fund.
The amount of the Fund's potential gain or loss on
any swap transaction is not subject to any fixed
limit. Calamos will consider such risks and will
enter into swap and other derivatives transactions
only when it believes that the risks are not
unreasonable. The Fund will earmark and reserve the
Fund assets, in cash or liquid securities, in an
amount sufficient at all times to cover its current
obligations under its swap transactions, caps,
floors and collars. If the Fund enters into a swap
agreement on a net basis, it will earmark and
reserve assets with a daily value at least equal to
the excess, if any, of the Fund's accrued
obligations under the swap agreement over the
accrued amount the Fund is entitled to receive under
the agreement. If the Fund enters into a swap
agreement on other than a net basis, or sells a cap,
floor or collar, it will earmark and reserve assets
with a daily value at least equal to the full amount
of the Fund's accrued obligations under the
agreement. The Fund will not enter into any swap
transaction, cap, floor, or collar, unless the
counterparty to the transaction is deemed
creditworthy by Calamos. If a counterparty defaults,
the Fund may have contractual remedies pursuant to
the agreements related to the transaction. The swap
markets in which many types of swap transactions are
traded have grown substantially in recent years,
with a large number of banks and investment banking
firms acting both as principals and as agents
utilizing standardized swap documentation. As a
result, the markets for certain types of swaps
(e.g., interest rate swaps) have become relatively
liquid. The markets for some types of caps, floors
and collars are less liquid.

During the term of a swap, cap, floor or collar,
changes in the value of the instrument are
recognized as unrealized gains or losses by marking
to market to reflect the market value of the
instrument. When the instrument is terminated, the
Fund will record a realized gain or loss equal to
the difference, if any, between the proceeds from
(or cost of) the closing transaction and the Fund's
basis in the contract. The federal income tax
treatment with respect to swap transactions, caps,
floors, and collars may impose limitations on the
extent to which the Fund may engage in such
transactions. See "Risk Factors -- Swaps and Related
Swap Products."

CREDIT DEFAULT SWAPS RISK. The use of CDSs, like all
swap agreements, is subject to certain risks. If a
counterparty's creditworthiness declines, the value
of the swap would likely decline. Moreover, there is
no guarantee that the Fund could eliminate its
exposure under an outstanding swap agreement by
entering into an offsetting swap agreement with the
same or another party. See "Risk Factors -- Credit
Default Swaps Risk."

INTEREST RATE RISK. Debt securities, including high
yield securities, are subject to certain risks,
including:

- if interest rates go up, the value of debt
securities in the Fund's portfolio generally will
decline;

- during periods of declining interest rates, the
issuer of a security may exercise its option to
prepay principal earlier than scheduled, forcing
the Fund to reinvest in lower yielding securities.
This is known as call or prepayment risk. Debt
securities frequently have call features that
allow the issuer to repurchase the securities
prior to their stated maturity. An issuer may
redeem an obligation if the issuer can refinance
the debt at a lower cost due to declining interest
rates or an improvement in the credit standing of
the issuer;

- during periods of rising interest rates, the
average life of certain types of securities may be
extended because of slower than expected principal
payments. This may lock in a below market interest
rate, increase the security's duration (the
estimated period until the security is paid in
full) and reduce the value of the security. This
is known as extension risk; and

- market interest rates currently are at
historically low levels. See "Risk
Factors -- Interest Rate Risk."

DEFAULT RISK. Default risk refers to the risk that a
company who issues a debt security will be unable to
fulfill its obligations to repay principal and
interest. The lower a debt security is rated, the
greater the default risk. See "Risk
Factors -- Default Risk."

INTEREST RATE TRANSACTIONS RISK. The Fund may enter
into an interest rate swap or cap transaction to
attempt to protect itself from increasing dividend
or interest expenses on its leverage resulting from
increasing short-term interest rates. A decline in
interest rates may result in a decline in the value
of the swap or cap, which may result in a decline in
the net asset value of the Fund. See "Risk
Factors -- Interest Rate Transactions Risk."

TAX RISK. The Fund may invest in certain securities,
such as certain convertible securities, for which
the federal income tax treatment may not be clear or
may be subject to re-characterization by the
Internal Revenue Service. It could be more difficult
for the Fund to comply with the tax requirements
applicable to regulated investment companies if the
tax characterization of the Fund's investments or
the tax treatment of the income from such

investments were successfully challenged by the
Internal Revenue Service. See "U.S. Federal Income
Tax Matters."

MANAGEMENT RISK. Calamos' judgment about the
attractiveness, relative value or potential
appreciation of a particular sector, security or
investment strategy may prove to be incorrect. See
"Risk Factors -- Management Risk."

ANTITAKEOVER PROVISIONS. The Fund's Agreement and
Declaration of Trust and By-laws include provisions
that could limit the ability of other entities or
persons to acquire control of the Fund or to change
the composition of its Board of Trustees. Such
provisions could limit the ability of shareholders
to sell their shares at a premium over prevailing
market prices by discouraging a third party from
seeking to obtain control of the Fund. These
provisions include staggered terms of office for the
Trustees, advance notice requirements for
shareholder proposals, and super-majority voting
requirements for certain transactions with
affiliates, converting the Fund to an open-end
investment company or a merger, asset sale or
similar transaction. Holders of preferred shares
will have voting rights in addition to and separate
from the voting rights of common shareholders with
respect to certain of these matters. See
"Description of Shares -- Preferred Shares" and
"Certain Provisions of the Agreement and Declaration
of Trust and By-Laws." The holders of preferred
shares, on the one hand, and the holders of the
common shares, on the other, may have interests that
conflict in these situations. See "Risk
Factors -- Antitakeover Provisions."

MARKET DISRUPTION RISK. Certain events have a
disruptive effect on the securities markets, such as
terrorist attacks, war and other geopolitical
events, earthquakes, storms and other disasters. The
Fund cannot predict the effects of similar events in
the future on the U.S. economy or any foreign
economy. See "Risk Factors -- Market Disruption
Risk."

SUMMARY OF FUND EXPENSES

The following table shows the Fund's expenses as a percentage of net assets
attributable to common shares assuming the Fund issues preferred shares in an
amount equal to 33% of the Fund's total assets immediately after issuance.

SHAREHOLDER TRANSACTION FEES:

Sales Load (as a percentage of offering price)......................... 4.50%
Offering Expenses of the Common Shares borne by the Fund (as a
percentage of offering price)(1)(2).................................. 0.09%
Offering Expenses of the Preferred Shares expected to be borne by the
Fund (as a percentage of offering price)(3).......................... 0.53%
Dividend Reinvestment Plan Fees........................................ None(4)

PERCENTAGE OF
NET ASSETS
ATTRIBUTABLE
TO COMMON
SHARES
-------------

ANNUAL EXPENSES
Management Fee(5)................................................ 1.50%
Other Expenses................................................... 0.27%
Leverage Costs(6)................................................ 2.51%
----
Total Annual Expenses............................................ 4.28%

EXPENSE EXAMPLE: The following example illustrates the expenses (including
the sales load of $45, estimated offering expenses of this offering of $0.87 and
the estimated preferred share offering costs of $5.34, assuming preferred shares
are issued representing 33% of the Fund's total assets) that you would pay on a
$1,000 investment in common shares, assuming (a) net annual expenses of 4.28% of
net assets attributable to common shares, (b) a 5% annual return and (c) the
Fund issues preferred shares in an amount equal to 33% of the Fund's total
assets:(7)

1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------

Total Expenses Incurred(7)....................... $92 $175 $259 $475
--- ---- ---- ----

--------

(1) Calamos has agreed to pay organizational expenses and offering costs
(other than sales load) that exceed $0.03 per common share (0.20% of the
offering price).

(2) Calamos has agreed to pay from its own assets a structuring fee to each
of Wachovia Capital Markets, LLC and Citigroup Global Markets Inc.
Calamos has agreed to pay from its own assets a sales incentive fee to
each of H&R Block Financial Advisors, Inc. and RBC Capital Markets
Corporation. See "Underwriting."

(3) If the Fund offers preferred shares, costs of that offering, estimated
to be approximately 1.12% of the total amount of the preferred share
offering, will effectively be borne by the common shareholders and will
result in a reduction of the net asset value of the common shares.
Assuming the issuance of preferred shares in the amount equal to 33% of
the Fund's total assets immediately after issuance, those offering costs
are estimated to be approximately $0.08 per common share (0.53% of the
offering price of the common shares).

(4) A shareholder that directs the plan agent to sell shares held in a
dividend reinvestment account will pay brokerage charges.

(5) The Fund pays Calamos an annual management fee, payable monthly, for its
investment management services equal to 1.00% of the Fund's average
weekly managed assets. In accordance with the requirements of the
Commission, the table above shows the Fund's management fee as a
percentage of net assets, and not as a percentage of managed assets. By
showing the management fee as a percentage of net assets, the management
fee is not expressed as a percentage of all of the assets the Fund
intends to invest.

(6) Assumes a dividend rate on preferred shares of 5.01%, which rate is
subject to change based on prevailing market conditions. Preferred share
expenses are expressed as a percentage of average net assets. In the
event the Fund, as an alternative to issuing preferred shares, utilizes
leverage through borrowings in an amount equal to 33% of the Fund's
total assets (including the amount obtained from leverage), it is
estimated that, as a percentage of net assets attributable to common
shares, the "Management Fee" would be 1.50%, "Other Expenses" would be
0.13%, "Interest Payments on Borrowed Funds" (assuming an interest rate
of 5.35%, which interest rate is subject to change based on prevailing
market conditions) would be 2.68% and "Total Annual Expenses" would be
4.31%. Based on the "Total Annual Expenses" and in accordance with the
example below, the expenses for years 1, 3, 5 and 10 would be $87, $171,
$255 and $472, respectively.

(7) The example assumes that the estimated "Other Expenses" set forth in the
fee table are accurate and that all dividends and distributions are
reinvested at net asset value. Moreover, the Fund's actual rate of
return may be greater or less than the hypothetical 5% return shown in
the example. The expenses you would pay, based on the Fund's expenses
stated as a percentage of the Fund's net assets assuming the Fund does
not issue preferred shares, or otherwise use leverage, and otherwise
making the same assumptions in the example above, would be: 1 year, $57;
3 years, $80; 5 years, $104; and 10 years, $175. THE EXAMPLE SHOULD NOT
BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES. ACTUAL EXPENSES MAY
BE GREATER OR LESS THAN THOSE ASSUMED.

The purpose of the table above is to help you understand all fees and
expenses that you, as a common shareholder, would bear directly or indirectly.
As of the date of this prospectus, the Fund has not commenced investment
operations. The amount set forth under "Other Expenses" is based upon estimates
for the current year, assuming no exercise of the over-allotment option granted
to the underwriters. The table assumes that the Fund issues 33,333,333 common
shares and issues preferred shares as a means of leverage. If the Fund leverages
through borrowing or issuing debt securities, the Fund would incur interest
expense. For additional information with respect to the Fund's expenses, see
"Management of the Fund." Other expenses include custodial and transfer agency
fees, legal and accounting expenses, and listing fees.

THE FUND

Calamos Global Dynamic Income Fund is a newly organized, diversified,
closed-end management investment company. The Fund was organized as a statutory
trust under the laws of the state of Delaware on April 10, 2007, and has
registered under the 1940 Act. As a recently organized entity, the Fund has no
operating history. The Fund's principal office is located at 2020 Calamos Court,
Naperville, Illinois 60563, and its telephone number is 1.800.582.6959.

USE OF PROCEEDS

The net proceeds of this offering will be approximately $800,520,000 (or
approximately $910,091,175 assuming the underwriters exercise the over-allotment
option in full) after payment of organizational and offering costs estimated to
be approximately $1,680,000 (or approximately $1,909,950 assuming the
underwriters exercise the over-allotment option in full) and the deduction of
the sales load. Calamos has agreed to pay organizational expenses and offering
costs (other than sales load) that exceed $0.03 per share.

The Fund will invest the net proceeds of the offering in accordance with the
Fund's investment objective and policies as stated below. It is presently
anticipated that the Fund will invest substantially all of the net proceeds in
securities that meet its investment objective and policies within three months
after completion of this offering. Pending such investment, the Fund anticipates
that all or a portion of the proceeds will be invested in U.S. government
securities or high grade, short-term money market instruments. If necessary, the
Fund may also purchase, as temporary investments, securities of other open-or
closed-end investment companies that invest primarily in the types of securities
in which the Fund may invest directly. See "Investment Objective and Principal
Investment Strategies."

INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES

INVESTMENT OBJECTIVE

The Fund's primary investment objective is to generate a high level of
current income, with a secondary objective of capital appreciation. The Fund's
investment objective may be changed by the Board of Trustees without a
shareholder vote, except that the Fund will give shareholders at least 60 days
notice of any change to the Fund's investment objective. The Fund makes no
assurance that it will realize its objective. An investment in the Fund may be
speculative in that it involves a high degree of risk and should not constitute
a complete investment program. See "Risk Factors."

PRINCIPAL INVESTMENT STRATEGIES

Under normal circumstances, the Fund will invest primarily in a globally
diversified portfolio of convertible instruments, common and preferred stocks,
and income-producing securities such as investment grade and below investment
grade (high yield/high risk) debt securities. The Fund may also use other
income-producing strategies, including options, swaps and other derivative
instruments, for both investment and hedging purposes. The Fund, under normal
circumstances, will invest at least 40% of its managed assets in securities of
foreign issuers in developed and emerging markets, including debt and equity
securities of corporate issuers and debt securities of government issuers.

The Fund will maintain a balanced approach to geographic portfolio
diversification. The Fund may invest up to 100% of its managed assets in
securities of foreign issuers in developed and emerging markets, including debt
and equity securities of corporate issuers and debt securities of government
issuers.

The Fund will use a number of investment strategies to achieve its
objectives and expects to invest in a wide variety of financial instruments.
These instruments include global convertible, exchangeable instruments, as well
as "synthetic" convertible instruments. The Fund will also invest in global
equities or equity-linked securities with high income potential. From time to
time, the Fund expects to invest in Rule 144A securities, foreign exchange
contracts or securities with imbedded foreign exchange hedges, and high yield
bonds of companies rated BB or lower.

In general, the Fund intends to seek out companies with a long-term track
record of high dividend payout consistent with dividend growth. In certain
circumstances, the Fund may invest in underlying companies it believes have
substantial prospects for price appreciation even if the there is little or no
dividend growth potential. The Fund may from time to time, seek to sell index
options or single stock options (either listed or "over the counter") to enhance
the overall yield of the Fund or, in the opinion of Calamos, reduce portfolio
volatility. The Fund may purchase options to hedge or engage in other hedging
activities including the purchase or sale of futures, swaps or options on
equities, indices, currencies, interest rates or credits.

Initially, and depending on market conditions and prevailing economic
trends, the Fund intends to allocate its assets in the following manner: 50% of
managed assets in equity securities; 25% of managed assets in fixed income
securities (including debt and high yield securities); and 25% of managed assets
in alternative strategies (including convertible hedging and swaps and related
swap products). The Fund does not seek to maintain any target allocation among
asset classes and, at any time, its allocation among asset classes may vary
significantly from the initial allocation.

FOREIGN SECURITIES. The Fund may invest up to 100% of its managed assets in
securities of foreign issuers in developed and emerging markets, including debt
and equity securities of corporate issuers and debt securities of government
issuers. The Fund will invest in the securities of issuers located in at least
three countries, which may include the United States. A foreign issuer is a
foreign government or a company organized under the laws of a foreign country.

CONVERTIBLE SECURITIES. A convertible security is a debt security or
preferred stock that is exchangeable for an equity security (typically of the
same issuer) at a predetermined price. Depending upon the

relationship of the conversion price to the market value of the underlying
security, a convertible security may trade more like an equity security than a
debt instrument.

SYNTHETIC CONVERTIBLE SECURITIES. The Fund may invest in "synthetic"
convertible securities. A synthetic convertible security is a financial
instrument that is designed to simulate the characteristics of another
instrument (i.e., a convertible security) through the combined features of a
collection of other securities or assets. Calamos may create a synthetic
convertible security by combining separate securities that possess the two
principal characteristics of a true convertible security, i.e., a fixed-income
security ("fixed-income component", which may be a convertible or non-
convertible security) and the right to acquire an equity security ("convertible
component"). The fixed-income component is achieved by investing in non-
convertible, fixed-income securities such as bonds, preferred stocks and money
market instruments. The convertible component is achieved by investing in
warrants or options to buy common stock at a certain exercise price, or options
on a stock index. The Fund may also purchase synthetic convertible securities
created by other parties, typically investment banks, including convertible
structured notes. Convertible structured notes are fixed income debentures
linked to equity. Convertible structured notes have the attributes of a
convertible security, however, the investment bank that issued the convertible
note assumes the credit risk associated with the investment, rather than the
issuer of the underlying common stock into which the note is convertible.
Different companies may issue the fixed-income and convertible components, which
may be purchased separately and at different times.

The Fund may also invest in synthetic convertible securities created by
third parties, typically investment banks. Synthetic convertible securities
created by such parties may be designed to simulate the characteristics of
traditional convertible securities or may be designed to alter or emphasize a
particular feature. Traditional convertible securities typically offer stable
cash flows with the ability to participate in capital appreciation of the
underlying common stock. Because traditional convertible securities are
exercisable at the option of the holder, the holder is protected against
downside risk. Synthetic convertible securities may alter these characteristics
by offering enhanced yields in exchange for reduced capital appreciation or less
downside protection, or any combination of these features. Synthetic convertible
instruments may include structured notes, equity-linked notes, mandatory
convertibles and combinations of securities and instruments, such as a debt
instrument combined with a forward contract.

Some examples of these securities include:

Preferred equity redeemable cumulative stock ("PERCS") are shares that
automatically convert into one ordinary share upon maturity. They are usually
issued at the prevailing share price, convertible into one ordinary share, with
an enhanced dividend yield. PERCS pay a higher dividend than common shares, but
the equity upside is capped. Above a certain share price, the conversion ratio
will fall as the stock rises, capping the upside at that level. Below this
level, the conversion ratio remains one-for-one, giving the same downside
exposure as the ordinary shares, excluding the income difference.

Dividend enhanced convertible stock ("DECS") are either preference shares or
subordinated bonds. These, like PERCS, mandatorily convert into ordinary shares
at maturity, if not already converted. DECS give no significant downside
protection and are very equity sensitive with minimal direct bond
characteristics and interest rate exposure. As with PERCS, some of the upside
performance is given away and in return, the investor receives an enhanced yield
over the ordinary shares. Unlike PERCS, however, the investor's upside is not
capped. Instead, the investor trades a zone of flat exposure to the share price
for the enhanced income.

Preferred Redeemable Increased Dividend Equity Security ("PRIDES") are
synthetic securities consisting of a forward contract to purchase the issuer's
underlying security and an interest bearing deposit. Interest payments are made
at regular intervals, and conversion into the underlying security is mandatory
at maturity. Similar to convertible securities, PRIDES allow investors to earn
stable cash flows while still participating in the capital gains of an
underlying stock. This is possible because these products are valued along the
same lines as the underlying security.

CONVERTIBLE HEDGING. The Fund may enhance income and protect against market
risk by hedging a portion of the equity risk inherent in the convertible
securities purchased for the Fund. This hedging is achieved by selling short
some or all of the common stock issuable upon exercise of the convertible
security. If the market price of the common stock increases above the conversion
price on the convertible security, the price of the convertible security will
increase. The Fund's increased liability on the short position would, in whole
or in part, reduce this gain. if the price of the common stock declines, any
decline in the price of the convertible security would offset, in whole or in
part, the Fund's gain on the short position. The Fund profits from this strategy
by receiving interest and/or dividends on the convertible security and by
adjusting the amount of equity risk that is hedged by short sales. In
determining the appropriate portion of the Fund's equity exposure to hedge,
Calamos may consider the general outlook for interest rates and equity markets,
the availability of stock to sell short and expected returns and volatility.

HIGH YIELD SECURITIES. The Fund may invest in high yield securities without
limit for either current income or capital appreciation or both. The high yield
securities in which the Fund invests are rated Ba or lower by Moody's or BB or
lower by Standard & Poor's or are unrated but determined by Calamos to be of
comparable quality. The Fund may not invest in debt securities that are rated
lower than C. If a debt security were downgraded to below a C rating subsequent
to the Fund's investment in the security, Calamos would review the investment to
consider the downgrading, as well as other factors, and determine what action to
take in the best interest of shareholders. Non-convertible debt securities rated
below investment grade are commonly referred to as "junk bonds" and are
considered speculative with respect to the issuer's capacity to pay interest and
repay principal. Below investment grade non-convertible debt securities involve
greater risk of loss, are subject to greater price volatility and are less
liquid, especially during periods of economic uncertainty or change, than higher
rated debt securities.

OPTIONS STRATEGY. The Fund may also seek to generate income from option
premiums by writing (selling) options. The Fund may write (sell) call options
(i) on a portion of the equity securities (including securities that are
convertible into equity securities) in the Fund's portfolio and (ii) on broad-
based securities indices (such as the S&P 500 or MSCI EAFE) or certain ETFs
(exchange traded funds) that trade like common stocks but seek to replicate such
market indices. The Fund may sell, put or call options on stocks, indices,
rates, credit spreads or currencies. The Fund may also sell call or put options
on single stocks, credits or indices for hedging purposes. The Fund's use of
options is subject to the asset segregation requirements of the 1940 Act.

OPTIONS IN GENERAL. A call option, upon payment of a premium, gives the
purchaser of the option the right to buy, and the seller the obligation to sell,
the underlying security, index or other instrument at the exercise price. A put
option gives the purchaser of the option, upon payment of a premium, the right
to sell, and the seller the obligation to buy, the underlying security, index,
or other instrument at the exercise price.

The Fund is authorized to purchase and sell exchange listed options and
over-the-counter options ("OTC options"). Exchange listed options are issued by
a regulated intermediary such as the OCC, which guarantees the performance of
the obligations of the parties to such options. In addition, the Fund may
purchase instruments structured by broker-dealers or investment banks that
package or possess economic characteristics of options. The discussion below
uses the OCC as an example, but is also applicable to other financial
intermediaries.

With certain exceptions, OCC issued and exchange listed options generally
settle by physical delivery of the underlying security, although in the future
cash settlement may become available. Index options are cash settled for the net
amount, if any, by which the option is "in-the-money" (i.e., where the value of
the underlying instrument exceeds, in the case of a call option, or is less
than, in the case of a put option, the exercise price of the option) at the time
the option is exercised. Frequently, rather than taking or making delivery of
the underlying instrument through the process of exercising the option, listed
options are closed by entering into offsetting purchase or sale transactions
that do not result in ownership of the new option.

options, which generally have standardized terms and performance mechanics, all
the terms of an OTC option, including such terms as method of settlement, term,
exercise price, premium, guarantees and security, are set by negotiation of the
parties. The Fund may sell OTC options (other than OTC currency options) that
are subject to a buy-back provision permitting the Fund to require the
Counterparty to sell the option back to the Fund at a formula price within seven
days. The Fund expects generally to enter into OTC options that have cash
settlement provisions, although it is not required to do so. The staff of the
Commission currently takes the position that OTC options purchased by a fund,
and portfolio securities "covering" the amount of a fund's obligation pursuant
to an OTC option sold by it (or the amount of assets equal to the formula price
for the repurchase of the option, if any, less the amount by which the option is
in the money) are illiquid. OTC options purchased by the Fund and any portfolio
securities used to cover obligations pursuant to such options are not considered
illiquid by Calamos for the purposes of the Fund's limitation on investments in
illiquid securities.

The Fund may also purchase and sell options on securities indices and other
financial indices. Options on securities indices and other financial indices are
similar to options on a security or other instrument except that, rather than
settling by physical delivery of the underlying instrument, they settle by cash
settlement, i.e., an option on an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds, in the case of a call, or is less than,
in the case of a put, the exercise price of the option (except if, in the case
of an OTC option, physical delivery is specified). This amount of cash is equal
to the excess of the closing price of the index over the exercise price of the
option, which also may be multiplied by a formula value. The seller of the
option is obligated, in return for the premium received, to make delivery of
this amount. The gain or loss on an option on an index depends on price
movements in the instruments making upon the market, market segment, industry or
other composite on which the underlying index is based, rather than price
movements in individual securities, as is the case with respect to options on
securities.

The Fund will write call options and put options only if they are "covered."
For example, a call option written by the Fund will require the Fund to hold the
securities subject to the call (or securities convertible into those securities
without additional consideration) or to segregate cash or liquid assets
sufficient to purchase and deliver the securities if the call is exercised. A
call option sold by the Fund on an index will require the Fund to own portfolio
securities that correlate with the index or to segregate cash or liquid assets
equal to the excess of the index value over the exercise price on a current
basis. A put option written by the Fund requires the Fund to segregate cash or
liquid assets equal to the exercise price.

OTC options entered into by the Fund will generally provide for cash
settlement. As a result, when the Fund sells those instruments it will only
segregate an amount of cash or liquid assets equal to its accrued net
obligations, as there is no requirement for payment or delivery of amounts in
excess of the net amount. Those amounts will equal 100% of the exercise price in
the case of a non cash-settled put, the same as an OCC guaranteed listed option
sold by the Fund, or the in-the-money amount plus any sell-back formula amount
in the case of a cash-settled put or call. In addition, when the Fund sells a
call option on an index at a time when the in-the-money amount exceeds the
exercise price, the Fund will segregate, until the option expires or is closed
out, cash or cash equivalents equal in value to such excess. OTC options other
than those above may also settle with physical delivery, or with an election of
either physical delivery or cash settlement and the Fund will segregate an
amount of cash or liquid assets equal to the full value of the option. OTC
options settling with physical delivery, or with an election of either physical
delivery or cash settlement, will be treated the same as other options settling
with physical delivery.

If an option written by the Fund expires, the Fund will generally realize a
short-term capital gain equal to the premium received at the time the option was
written. If an option purchased by the Fund expires, the Fund realizes a capital
loss equal to the premium paid, which will either be short-term or long-term
depending on the Fund's holding period for the option.

The Fund will generally realize a short-term capital gain from a closing
purchase transaction if the cost of the closing option is less than the premium
received from writing the option, or, if it is more, the Fund will generally
realize a short-term capital loss. If the premium received from a closing sale
transaction

is more than the premium paid to purchase the option, the Fund will generally
realize a short-term or long-term capital gain, depending on the Fund's holding
period for the option, or, if it is less, the Fund will generally realize a
short-term or long-term capital loss, depending on the Fund's holding period for
the option. The principal factors affecting the market value of a put or a call
option include supply and demand, interest rates, the current market price of
the underlying security or index in relation to the exercise price of the
option, the volatility of the underlying security or index, and the time
remaining until the expiration date.

A put option purchased by the Fund is an asset of the Fund, valued initially
at the premium paid for the option. The premium received for an option written
by the Fund is recorded as a deferred credit. The value of an option purchased
or written is marked-to-market daily and is valued at the closing price on the
exchange on which it is traded or, if not traded on an exchange or no closing
price is available, at the mean between the last bid and asked prices.

SHORT SALES. The Fund may engage in short sales of securities. When the
Fund takes a short position, it sells at the current market price a stock that
it does not own and has borrowed in anticipation of a decline in the value of
the stock. To complete, or close out, the short sale transaction, the Fund buys
the same security in the market and returns it to the lender. The Fund makes
money if the market price of the borrowed security goes down and the Fund is
able to replace the security for less than it earned by selling short. The Fund
loses money if the stock price goes up after the short sale and before the
position is closed out. The Fund will enter into short sales only with respect
to common stock that it owns or that is issuable upon conversion of convertible
securities held by the Fund.

SWAPS AND RELATED SWAP PRODUCTS. Swap transactions will be based on
financial assets including interest rates, currencies, securities indices,
securities baskets, specific securities, fixed income sectors, commodity swaps,
asset-backed swaps, interest rate caps, floors and collars and options on
interest rate swaps (collectively defined as "swap transactions").

The Fund may enter into swap transactions for any legal purpose consistent
with its investment objective and policies, such as for the purpose of
attempting to obtain or preserve a particular return or spread at a lower cost
than obtaining that return or spread through purchases and/or sales of
instruments in cash markets, to protect against currency fluctuations, to
protect against any increase in the price of securities the Fund anticipates
purchasing at a later date, or to gain exposure to certain markets in the most
economical way possible. The use of swap transactions by the Fund involves
Calamos' judgment with regard to future movements of the particular market
underlying the particular swap transaction. The Fund intends to use swaps to a
significant degree, subject to the asset coverage requirements of the 1940 Act
and the Internal Revenue Code of 1986, as amended.

upon payment of a fee (either at the time of purchase or in the form of higher
payments or lower receipts within an interest rate swap transaction) has the
right, but not the obligation, to initiate a new swap transaction of a pre-
specified notional amount with pre-specified terms with the seller of the option
as the counterparty. The "notional amount" of a swap transaction is the agreed
upon basis for calculating the payments that the parties have agreed to
exchange. For example, one swap counterparty may agree to pay a floating rate of
interest (e.g., 3 month LIBOR) calculated based on a $10 million notional amount
on a quarterly basis in exchange for receipt of payments calculated based on the
same notional amount and a fixed rate of interest on a semi-annual basis. In the
event the Fund is obligated to make payments more frequently than it receives
payments from the other party, it will incur incremental credit exposure to that
swap counterparty. This risk may be mitigated somewhat by the use of swap
agreements which call for a net payment to be made by the party with the larger
payment obligation when the obligations of the parties fall due on the same
date. Under most swap agreements entered into by the Fund, payments by the
parties will be exchanged on a "net basis", and the Fund will receive or pay, as
the case may be, only the net amount of the two payments.

The amount of the Fund's potential gain or loss on any swap transaction is
not subject to any fixed limit. Nor is there any fixed limit on the Fund's
potential loss if it sells a cap or collar. If the Fund buys a cap, floor or
collar, however, the Fund's potential loss is limited to the amount of the fee
that it has paid. When measured against the initial amount of cash required to
initiate the transaction, which is typically zero in the case of most
conventional swap transactions, swaps, caps, floors and collars tend to be more
volatile than many other types of instruments.

The use of swap transactions, caps, floors and collars involves investment
techniques and risks that are different from those associated with portfolio
security transactions. If Calamos is incorrect in its forecasts of market
values, interest rates, and other applicable factors, the investment performance
of the Fund will be less favorable than if these techniques had not been used.
These instruments are typically not traded on exchanges. Accordingly, there is a
risk that the other party to certain of these instruments will not perform its
obligations to the Fund or that the Fund may be unable to enter into offsetting
positions to terminate its exposure or liquidate its position under certain of
these instruments when it wishes to do so.

Such occurrences could result in losses to the Fund. Calamos will consider
such risks and will enter into swap and other derivatives transactions only when
it believes that the risks are not unreasonable. The Fund will earmark and
reserve the Fund assets, in cash or liquid securities, in an amount sufficient
at all times to cover its current obligations under its swap transactions, caps,
floors and collars. If the Fund enters into a swap agreement on a net basis, it
will earmark and reserve assets with a daily value at least equal to the excess,
if any, of the Fund's accrued obligations under the swap agreement over the
accrued amount the Fund is entitled to receive under the agreement. If the Fund
enters into a swap agreement on other than a net basis, or sells a cap, floor or
collar, it will earmark and reserve assets with a daily value at least equal to
the full amount of the Fund's accrued obligations under the agreement. The Fund
will not enter into any swap transaction, cap, floor, or collar, unless the
counterparty to the transaction is deemed creditworthy by Calamos. If a
counterparty defaults, the Fund may have contractual remedies pursuant to the
agreements related to the transaction. The swap markets in which many types of
swap transactions are traded have grown substantially in recent years, with a
large number of banks and investment banking firms acting both as principals and
as agents utilizing standardized swap documentation. As a result, the markets
for certain types of swaps (e.g., interest rate swaps) have become relatively
liquid. The markets for some types of caps, floors and collars are less liquid.

During the term of a swap, cap, floor or collar, changes in the value of the
instrument are recognized as unrealized gains or losses by marking to market to
reflect the market value of the instrument. When the instrument is terminated,
the Fund will record a realized gain or loss equal to the difference, if any,
between the proceeds from (or cost of) the closing transaction and the Fund's
basis in the contract. The federal income tax treatment with respect to swap
transactions, caps, floors, and collars may impose limitations on the extent to
which the Fund may engage in such transactions.

CREDIT DEFAULT SWAPS. As described above, swap agreements are two party
contracts entered into primarily by institutional investors for periods ranging
typically from three to ten years, although shorter or longer periods do exist.
In the case of a Credit Default Swap ("CDS"), the contract gives one party (the
buyer) the right to recoup the economic value of a decline in the value of debt
securities of the reference issuer if the credit event (including a default or
restructuring) occurs. This value is obtained by delivering a debt security of
the reference issuer to the party in return for a previously agreed payment from
the other party (frequently, the par value of the debt security)or by cash
settlement of the transaction.

The Fund may also enter into swap contracts based on baskets or indices of
securities ("CDX"). A CDX index is an equally weighted credit default swap
index. This family of indices is comprised of baskets of credit derivatives that
are representative of certain market segments such as North American investment
grade, high volatility investment grade, non-investment grade, as well as
emerging markets. CDS of individual reference entities are selected for
inclusion in the indices based on rating requirements and liquidity
requirements. A CDX index tranche provides access to customized risk, exposing
each investor to losses at different levels of subordination. The lowest part of
the capital structure is called the "equity tranche" as it has exposure to the
first losses experienced in the basket. The mezzanine and senior tranches are
higher in the capital structure but can also be exposed to loss in value.

Credit default swaps may require initial premium (discount) payments as well
as periodic payments (receipts) related to the interest leg of the swap or to
the default of a reference obligation.

If the Fund is a seller of a CDS contract, the Fund would be required to pay
the par (or other agreed upon) value of a referenced debt obligation to the
counterparty in the event of a default or other credit event by the reference
issuer, such as a U.S. or foreign corporate issuer, with respect to such debt
obligations. In return, the Fund would receive from the counterparty a periodic
stream of payments over the term of the contract provided that no event of
default has occurred. If no default occurs, the Fund would keep the stream of
payments and would have no payment obligations. As the seller, the Fund would be
subject to investment exposure on the notional amount of the swap. The Fund
intends to maintain cash or liquid securities having a value at least equal to
the Fund's net payment obligation if the Fund is a seller of a CDS.

If the Fund is a buyer of a CDS contract, in the event of a default or other
credit event (such as a credit downgrade) by the reference issuer, such as a
U.S. or foreign corporation, with respect to its debt obligations, the Fund
would have the right to deliver a referenced debt obligation and receive the par
(or other agreed-upon) value of such debt obligation from the counterparty. In
return, the Fund would pay the counterparty a periodic stream of payments over
the term of the contract provided that no event of default has occurred. If no
default occurs, the counterparty would keep the stream of payments and would
have no further obligations to the Fund.

RULE 144A SECURITIES. The Fund may invest without limit in securities that
have not been registered for public sale, but that are eligible for purchase and
sale by certain qualified institutional buyers ("Rule 144A Securities").

OTHER DEBT SECURITIES. The Fund may also invest in investment grade debt
securities. The Fund's investments in investment grade debt securities may have
fixed or variable principal payments and all types of interest rate and dividend
payment and reset terms, including fixed rate, adjustable rate, contingent,
deferred, payment in kind and auction rate features.

U.S. GOVERNMENT SECURITIES. U.S. government securities in which the Fund
may invest include debt obligations of varying maturities issued by the U.S.
Treasury or issued or guaranteed by an agency or instrumentality of the U.S.
government, including the Federal Housing Administration, Federal Financing
Bank, Farmers Home Administration, Export-Import Bank of the United States,
Small Business Administration, Government National Mortgage Association, General
Services Administration, Central Bank for Cooperatives, Federal Farm Credit
Banks, Federal Home Loan Banks, Federal Home Loan Mortgage Corporation, Federal
National Mortgage Association ("FNMA"), Maritime Administration, Tennessee
Valley Authority, District of Columbia Armory Board, Student Loan Marketing
Association, Resolution Fund Corporation and various institutions that
previously were or currently are part of the Farm Credit System (which

has been undergoing reorganization since 1987). Some U.S. government securities,
such as U.S. Treasury bills, Treasury notes and Treasury bonds, which differ
only in their interest rates, maturities and times of issuance, are supported by
the full faith and credit of the United States. Others are supported by: (i) the
right of the issuer to borrow from the U.S. Treasury, such as securities of the
Federal Home Loan Banks; (ii) the discretionary authority of the U.S. government
to purchase the agency's obligations, such as securities of the FNMA; or (iii)
only the credit of the issuer. No assurance can be given that the U.S.
government will provide financial support in the future to U.S. government
agencies, authorities or instrumentalities that are not supported by the full
faith and credit of the United States. Securities guaranteed as to principal and
interest by the U.S. government, its agencies, authorities or instrumentalities
include: (i) securities for which the payment of principal and interest is
backed by an irrevocable letter of credit issued by the U.S. government or any
of its agencies, authorities or instrumentalities; and (ii) participations in
loans made to non-U.S. governments or other entities that are so guaranteed. The
secondary market for certain of these participations is limited and, therefore,
may be regarded as illiquid. U.S. government securities include STRIPS and
CUBES, which are issued by the U.S. Treasury as component parts of U.S. Treasury
bonds and represent scheduled interest and principal payments on the bonds.

OTHER INVESTMENT COMPANIES. The Fund may invest in the securities of other
investment companies to the extent that such investments are consistent with the
Fund's investment objective and policies and are permissible under the 1940 Act.
Under the 1940 Act, the Fund may not acquire the securities of other domestic or
non-U.S. investment companies if, as a result, (1) more than 10% of the Fund's
total assets would be invested in securities of other investment companies, (2)
such purchase would result in more than 3% of the total outstanding voting
securities of any one investment company being held by the Fund, or (3) more
than 5% of the Fund's total assets would be invested in any one investment
company. These limitations do not apply to the purchase of shares of any
investment company in connection with a merger, consolidation, reorganization or
acquisition of substantially all the assets of another investment company.

The Fund, as a holder of the securities of other investment companies, would
bear its pro rata portion of the other investment companies' expenses, including
advisory fees. These expenses are in addition to the direct expenses of the
Fund's own operations.

TEMPORARY DEFENSIVE INVESTMENTS. Under unusual market or economic
conditions or for temporary defensive purposes, the Fund may invest up to 100%
of its total assets in securities issued or guaranteed by the U.S. government or
its instrumentalities or agencies, certificates of deposit, bankers' acceptances
and other bank obligations, commercial paper rated in the highest category by a
nationally recognized statistical rating organization or other fixed income
securities deemed by Calamos to be consistent with a defensive posture, or may
hold cash. The yield on such securities may be lower than the yield on lower
rated fixed income securities. During such periods, the Fund may not be able to
achieve its investment objective.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
broker-dealers, member banks of the Federal Reserve System and other financial
institutions. Repurchase agreements are arrangements under which the Fund
purchases securities and the seller agrees to repurchase the securities within a
specific time and at a specific price. The repurchase price is generally higher
than the Fund's purchase price, with the difference being income to the Fund.
The counterparty's obligations under the repurchase agreement are collateralized
with U.S. Treasury and/or agency obligations with a market value of not less
than 100% of the obligations, valued daily. Collateral is held by the Fund's
custodian in a segregated, safekeeping account for the benefit of the Fund.
Repurchase agreements afford the Fund an opportunity to earn income on
temporarily available cash at low risk. In the event of commencement of
bankruptcy or insolvency proceedings with respect to the seller of the security
before repurchase of the security under a repurchase agreement, the Fund may
encounter delay and incur costs before being able to sell the security. Such a
delay may involve loss of interest or a decline in price of the security. If the
court characterizes the transaction as a loan and the Fund has not perfected a
security interest in the security, the Fund may be required to return the
security to the seller's estate and be treated as an unsecured creditor of the
seller. As an unsecured creditor, the Fund would be at risk of losing some or
all of the principal and interest involved in the transaction.

LENDING OF PORTFOLIO SECURITIES. The Fund may lend portfolio securities to
registered broker-dealers or other institutional investors deemed by Calamos to
be of good standing under agreements which require that the loans be secured
continuously by collateral in cash, cash equivalents or U.S. Treasury bills
maintained on a current basis at an amount at least equal to the market value of
the securities loaned. The Fund continues to receive the equivalent of the
interest or dividends paid by the issuer on the securities loaned as well as the
benefit of an increase and the detriment of any decrease in the market value of
the securities loaned and would also receive compensation based on investment of
the collateral. The Fund would not, however, have the right to vote any
securities having voting rights during the existence of the loan, but could call
the loan in anticipation of an important vote to be taken among holders of the
securities or of the giving or withholding of consent on a material matter
affecting the investment.

As with other extensions of credit, there are risks of delay in recovery or
even loss of rights in the collateral should the borrower of the securities fail
financially. At no time would the value of the securities loaned exceed 33 1/3%
of the value of the Fund's total assets.

PORTFOLIO TURNOVER. Although the Fund does not purchase securities with a
view to rapid turnover, there are no limitations on the length of time that
portfolio securities must be held. Portfolio turnover can occur for a number of
reasons, including calls for redemption, general conditions in the securities
markets, more favorable investment opportunities in other securities, or other
factors relating to the desirability of holding or changing a portfolio
investment. The portfolio turnover rates may vary greatly from year to year. A
high rate of portfolio turnover in the Fund would result in increased
transaction expense, which must be borne by the Fund. High portfolio turnover
may also result in the realization of capital gains or losses and, to the extent
net short-term capital gains are realized, any distributions resulting from such
gains will be considered ordinary income for federal income tax purposes.

LEVERAGE

The Fund may issue preferred shares, borrow money or issue debt securities
to increase its assets available for investment. The Fund currently anticipates
that it will issue cumulative preferred shares, as soon as practicable after the
closing of this offering, with an aggregate liquidation preference of up to
approximately 33% of the Fund's total assets immediately after issuance. As a
non-fundamental policy, the aggregate liquidation preference of preferred shares
and the principal amount of borrowings and debt securities may not exceed 38% of
the Fund's total assets. However, the Fund reserves the right to issue preferred
shares, borrow or issue debt securities to the extent permitted by the 1940 Act
(50% of total assets for preferred shares and 33 1/3% of total assets for
borrowing and debt securities). The Fund generally will not issue preferred
shares, borrow or issue debt securities unless Calamos expects that the Fund
will achieve a return on the leverage proceeds greater than the additional costs
the Fund incurs as a result of such leverage. The Fund also may borrow money as
a temporary measure for extraordinary or emergency purposes, including the
payment of dividends and the settlement of securities transactions which
otherwise might require untimely dispositions of the Fund's holdings. When the
Fund leverages its assets, the fees paid to Calamos for investment management
services will be higher than if the Fund did not leverage because Calamos' fees
are calculated based on the Fund's managed assets, which include the proceeds of
any leverage. Consequently, the Fund and Calamos may have differing interests in
determining whether to leverage the Fund's assets. In addition, the costs of
leveraging the Fund's assets, including underwriting commissions, offering
expenses and rating agency fees, will effectively be borne by the common
shareholders.

Under the 1940 Act, the Fund is not permitted to issue preferred shares
unless immediately after such issuance the net asset value of the Fund's
portfolio is at least 200% of the liquidation value of the outstanding preferred
shares (i.e., such liquidation value may not exceed 50% of the value of the
Fund's total assets). In addition, the Fund is not permitted to declare any cash
dividend or other distribution on its common shares unless, at the time of such
declaration, the net asset value of the Fund's portfolio (determined after
deducting the amount of such dividend or distribution) is at least 200% of such
liquidation value. In the event preferred shares are issued, the Fund intends,
to the extent possible, to purchase or redeem preferred shares from time to time
to maintain coverage of any preferred shares of at

least 200%. Under the 1940 Act, the Fund is not permitted to incur indebtedness
unless immediately after a borrowing or issuance of debt securities the Fund has
an asset coverage of at least 300% of the aggregate outstanding principal
balance of indebtedness (i.e., such indebtedness may not exceed 33 1/3% of the
value of the Fund's total assets). Additionally, under the 1940 Act, the Fund
may not declare any dividend or other distribution upon any class of its shares,
or purchase any such shares, unless the aggregate indebtedness of the Fund has,
at the time of the declaration of any such dividend or distribution or at the
time of any such purchase, an asset coverage of at least 300% after deducting
the amount of such dividend, distribution, or purchase price, as the case may
be.

The Fund may be subject to certain restrictions on investments imposed by
guidelines of one or more NRSROs which may issue ratings for the preferred
shares or debt instruments issued by the Fund if it wishes to maintain those
ratings. These guidelines may impose asset coverage or portfolio composition
requirements that are more stringent than those imposed by the 1940 Act. Certain
types of borrowings may result in the Fund being subject to covenants in credit
agreements, including those relating to asset coverage, borrowing base and
portfolio composition requirements and additional covenants that may affect the
Fund's ability to pay dividends and distributions on common shares in certain
instances. The Fund may also be required to pledge its assets to the lenders in
connection with certain types of borrowings. Calamos does not anticipate that
these covenants or restrictions will adversely affect its ability to manage the
Fund's portfolio in accordance with the Fund's investment objective and
policies. Due to these covenants or restrictions, the Fund may be forced to
liquidate investments at times and at prices that are not favorable to the Fund,
or the Fund may be forced to forgo investments that Calamos otherwise views as
favorable.

Whether and the extent to which the Fund employs leverage will depend on
many factors, the most important of which are investment outlook, market
conditions and interest rates. Successful use of a leveraging strategy depends
on Calamos' ability to predict correctly interest rates and market movements.
There is no assurance that a leveraging strategy will be successful during any
period in which it is employed.

See "Risk Factors -- Leverage Risk."

EFFECTS OF LEVERAGE

Assuming the Fund issues preferred shares with an aggregate liquidation
preference equal to approximately 33% of the Fund's total assets and an annual
dividend rate of 5.01% of such liquidation preference (which rate is
approximately the current rate which Calamos expects the Fund to pay, based on
market rates as of May 21, 2007), income generated by the Fund's portfolio (net
of estimated expenses) would need to exceed 1.67% in order to cover such
dividend payments on the preferred shares. Actual dividend rates may vary and
may be significantly higher or lower than the rate estimated above.

The following table illustrates the hypothetical effect on the return to a
holder of the Fund's common shares of the leverage obtained by issuing preferred
shares with an aggregate liquidation preference equal to 33% of the Fund's total
assets, assuming hypothetical annual returns of the Fund's portfolio of minus
10% to plus 10% and dividends on preferred shares at an annual dividend rate of
5.01%. As the table shows, leverage generally increases the return to common
shareholders when portfolio return is positive and greater than the cost of
leverage and decreases the return when the portfolio return is negative or less
than the cost of leverage. The figures appearing in the table are hypothetical
and actual returns may be greater or less than those appearing in the table.

Assumed Portfolio Return (Net of Expenses)....... (10)% (5)% 0% 5% 10%
Corresponding Common Share Return................ (17.51)% (10.01)% (2.51)% 5.00% 12.50%

Until the Fund issues preferred shares or borrows or issues debt securities,
the Fund's common shares will not be leveraged, and the risks and special
considerations related to leverage described in this prospectus will not apply.
Such leveraging of the common shares cannot be fully achieved until the proceeds
resulting from the use of leverage have been invested in longer term debt
instruments or equity securities in accordance with the Fund's investment
objective and policies.

INTEREST RATE TRANSACTIONS

In order to seek to reduce the interest rate risk inherent in the Fund's
underlying investments and capital structure, the Fund, if market conditions are
deemed favorable, likely will enter into interest rate swap or cap transactions
to attempt to protect itself from increasing dividend or interest expenses on
its leverage and to hedge portfolio securities from interest rate changes.
Interest rate swaps involve the Fund's agreement with the swap counterparty to
pay a fixed rate payment in exchange for the counterparty agreeing to pay the
Fund a payment at a variable rate that is expected to approximate the rate of
any variable rate payment obligation on the Fund's leverage. The payment
obligations would be based on the notional amount of the swap.

The Fund may use an interest rate cap, which would require it to pay a
premium to the cap counterparty and would entitle it, to the extent that a
specified variable rate index exceeds a predetermined fixed rate, to receive
from the counterparty payment of the difference based on the notional amount of
such cap. The Fund would use interest rate swaps or caps only with the intent to
reduce or eliminate the risk that an increase in short-term interest rates could
have on common share net earnings as a result of leverage.

The Fund will usually enter into swaps or caps on a net basis; that is, the
two payment streams will be netted out in a cash settlement on the payment date
or dates specified in the instrument, with the Fund receiving or paying, as the
case may be, only the net amount of the two payments. The Fund intends to
segregate with its custodian cash or liquid securities having a value at least
equal to the Fund's net payment obligations under any swap transaction, marked-
to-market daily.

The use of interest rate swaps and caps is a highly specialized activity
that involves investment techniques and risks different from those associated
with ordinary portfolio security transactions. Depending on the state of
interest rates in general, the Fund's use of interest rate swaps or caps could
enhance or harm the overall performance of the common shares. To the extent that
there is a decline in interest rates for maturities equal to the remaining
maturity on the Fund's fixed rate payment obligation under the interest rate
swap or equal to the remaining term of the interest rate cap, the value of the
swap or cap (which initially has a value of zero) could decline, and could
result in a decline in the net asset value of the common shares. If, on the
other hand, such rates were to increase, the value of the swap or cap could
increase, and thereby increase the net asset value of the common shares. As
interest rate swaps or caps approach their maturity, their positive or negative
value due to interest rate changes will approach zero.

In addition, if the short-term interest rates effectively received by the
Fund during the term of an interest rate swap are lower than the Fund's fixed
rate of payment on the swap, the swap will increase the Fund's operating
expenses and reduce common share net earnings. For example, if the Fund were to
(A) issue preferred shares representing 33% of the Fund's total assets and (B)
enter into one or more interest rate swaps in a notional amount equal to 75% of
its outstanding preferred shares under which the Fund would receive a short-term
swap rate of 5.01% and pay a fixed swap rate of 5.35% over the term of the swap,
the swap would effectively increase Fund expenses and reduce Fund common share
net earnings by approximately 0.13% as a percentage of net assets attributable
to common shares and approximately 0.08% as a percentage of managed assets. If,
on the other hand, the short-term interest rates effectively received by the
Fund are higher than the Fund's fixed rate of payment on the interest rate swap,
the swap would enhance common share net earnings. In either case, the swap would
have the effect of reducing fluctuations in the Fund's cost of leverage due to
changes in short-term interest rates during the term of the swap. The example
above is purely for illustrative purposes and is not predictive of the actual
percentage of the Fund's leverage that will be hedged by a swap, the actual
fixed rates that the Fund will pay under the swap (which will depend on market
interest rates for the applicable maturities at the time the Fund enters into
swaps) or the actual short-term rates that the Fund will receive on any swaps
(which fluctuate frequently during the term of the swap, and may change
significantly from initial levels), or the actual impact such swaps will have on
the Fund's expenses and common share net earnings.

Buying interest rate caps could enhance the performance of the common shares
by providing a maximum leverage expense. Buying interest rate caps could also
increase the operating expenses of the

Fund and decrease the net earnings of the common shares in the event that the
premium paid by the Fund to the counterparty exceeds the additional amount the
Fund would have been required to pay on its preferred shares due to increases in
short-term interest rates during the term of the cap had it not entered into the
cap agreement. The Fund has no current intention of selling an interest rate
swap or cap. The Fund will monitor any interest rate swaps or caps with a view
to ensure that the Fund remains in compliance with all applicable tax
requirements.

Interest rate swaps and caps do not involve the delivery of securities or
other underlying assets or principal. Accordingly, the risk of loss with respect
to interest rate swaps is limited to the net amount of interest payments that
the Fund is contractually obligated to make. If the counterparty defaults, the
Fund would not be able to use the anticipated net receipts under the swap or cap
to offset the dividend or interest payments on the Fund's leverage. Depending on
whether the Fund would be entitled to receive net payments from the counterparty
on the swap or cap, which in turn would depend on the general state of short-
term interest rates at that point in time, such a default could negatively
impact the performance of the common shares.

The Fund will not enter into an interest rate swap or cap transaction with
any counterparty that Calamos believes does not have the financial resources to
honor its obligation under the interest rate swap or cap transaction. Further,
Calamos will continually monitor the financial stability of a counterparty to an
interest rate swap or cap transaction in an effort to proactively protect the
Fund's investments.

In addition, at the time the interest rate swap or cap transaction reaches
its scheduled termination date, there is a risk that the Fund will not be able
to obtain a replacement transaction or that the terms of the replacement will
not be as favorable as on the expiring transaction. If this occurs, the
transaction could have a negative impact on the performance of the common
shares.

The Fund may choose or be required to redeem some or all preferred shares or
prepay any borrowings. This redemption would likely result in the Fund seeking
to terminate early all or a portion of any swap or cap transaction. Such early
termination of a swap could result in a termination payment by or to the Fund.
An early termination of a cap could result in a termination payment to the Fund.

RISK FACTORS

GENERAL. The Fund is a newly organized, diversified, closed-end management
investment company designed primarily as a long-term investment and not as a
trading tool. The Fund invests in a globally diversified portfolio of common and
preferred stocks and income-producing securities such as investment grade and
below investment grade debt securities. An investment in the Fund's common
shares may be speculative and it involves a high degree of risk. The Fund should
not constitute a complete investment program. Due to the uncertainty in all
investments, there can be no assurance that the Fund will achieve its investment
objective.

NO OPERATING HISTORY. The Fund has no operating history and its shares have
no history of public trading.

MARKET PRICE OF SHARES. Shares of closed-end funds frequently trade at a
market price that is below their net asset value. This is commonly referred to
as "trading at a discount." This characteristic of shares of closed-end funds is
a risk separate and distinct from the risk that the Fund's net asset value may
decrease. Investors who sell their shares within a relatively short period after
completion of the public offering are likely to be exposed to this risk.
Accordingly, the Fund is designed primarily for long-term investors and should
not be considered a vehicle for trading purposes. Net asset value will be
reduced following the offering by the sales load and the amount of
organizational and offering expenses paid by the Fund and immediately following
any offering of preferred shares by the costs of that offering paid by the Fund.

Whether investors will realize a gain or loss upon the sale of the Fund's
common shares will depend upon whether the market value of the shares at the
time of sale is above or below the price the investor

paid, taking into account transaction costs, for the shares and is not directly
dependent upon the Fund's net asset value. Because the market value of the
Fund's shares will be determined by factors such as the relative demand for and
supply of the shares in the market, general market conditions and other factors
beyond the control of the Fund, the Fund cannot predict whether its common
shares will trade at, below or above net asset value, or below or above the
initial offering price for the shares.

FOREIGN SECURITIES RISK. Investments in non-U.S. issuers may involve unique
risks compared to investing in securities of U.S. issuers. These risks are more
pronounced to the extent that the Fund invests a significant portion of its non-
U.S. investments in one region or in the securities of emerging market issuers.
These risks may include:

- less information about non-U.S. issuers or markets may be available due to
less rigorous disclosure or accounting standards or regulatory practices;

- many non-U.S. markets are smaller, less liquid and more volatile. In a
changing market, Calamos may not be able to sell the Fund's portfolio
securities at times, in amounts and at prices it considers reasonable;

- the adverse effect of currency exchange rates or controls on the value of
the Fund's investments;

- the economies of non-U.S. countries may grow at slower rates than expected
or may experience a downturn or recession;

- economic, political and social developments may adversely affect the
securities markets, including expropriation and nationalization;

- the difficulty in obtaining or enforcing a court judgment in non-U.S.
countries;

- restrictions on foreign investments in non-U.S. jurisdictions;

- difficulties in effecting the repatriation of capital invested in non-U.S.
countries; and

- withholding and other non-U.S. taxes may decrease the Fund's return.

There may be less publicly available information about non-U.S. markets and
issuers than is available with respect to U.S. securities and issuers. Non-U.S.
companies generally are not subject to accounting, auditing and financial
reporting standards, practices and requirements comparable to those applicable
to U.S. companies. The trading markets for most non-U.S. securities are
generally less liquid and subject to greater price volatility than the markets
for comparable securities in the United States. The markets for securities in
certain emerging markets are in the earliest stages of their development. Even
the markets for relatively widely traded securities in certain non-U.S. markets,
including emerging market countries, may not be able to absorb, without price
disruptions, a significant increase in trading volume or trades of a size
customarily undertaken by institutional investors in the United States.

Additionally, market making and arbitrage activities are generally less
extensive in such markets, which may contribute to increased volatility and
reduced liquidity.

Economies and social and political conditions in individual countries may
differ unfavorably from the United States. Non-U.S. economies may have less
favorable rates of growth of gross domestic product, rates of inflation,
currency valuation, capital reinvestment, resource self-sufficiency and balance
of payments positions. Many countries have experienced substantial, and in some
cases extremely high, rates of inflation for many years. Inflation and rapid
fluctuations in inflation rates have had, and may continue to have, very
negative effects on the economies and securities markets of certain emerging
market countries. Unanticipated political or social developments may also affect
the values of the Fund's investments and the availability to the Fund of
additional investments in such countries.

CURRENCY RISK. The value of the securities denominated or quoted in foreign
currencies may be adversely affected by fluctuations in the relative currency
exchange rates and by exchange control regulations. The Fund's investment
performance may be negatively affected by a devaluation of a currency in which
the Fund's investments are denominated or quoted. Further, the Fund's investment
performance

may be significantly affected, either positively or negatively, by currency
exchange rates because the U.S. dollar value of securities denominated or quoted
in another currency will increase or decrease in response to changes in the
value of such currency in relation to the U.S. dollar.

CONVERTIBLE SECURITIES RISK. The value of a convertible security is
influenced by both the yield of non-convertible securities of comparable issuers
and by the value of the underlying common stock. The value of a convertible
security viewed without regard to its conversion feature (i.e., strictly on the
basis of its yield) is sometimes referred to as its "investment value." A
convertible security's investment value tends to decline as prevailing interest
rate levels increase. Conversely, a convertible security's investment value
increases as prevailing interest rate levels decline.

However, a convertible security's market value will also be influenced by
its "conversion price," which is the market value of the underlying common stock
that would be obtained if the convertible security were converted. A convertible
security's conversion price tends to increase as the price of the underlying
common stock increases, and decrease as the price of the underlying common stock
decreases. As the market price of the underlying common stock declines such that
the conversion price is substantially below the investment value of the
convertible security, the price of the convertible security tends to be
influenced more by the yield of the convertible security. Thus, the convertible
security may not decline in price to the same extent as the underlying common
stock. If the market price of the underlying common stock increases to a point
where the conversion value approximates or exceeds the investment value, the
price of the convertible security tends to be influenced more by the market
price of the underlying common stock. In the event of a liquidation of the
issuing company, holders of convertible securities would be paid before the
company's common stockholders. Consequently, an issuer's convertible securities
generally entail less risk than its common stock.

SYNTHETIC CONVERTIBLE SECURITIES RISK. The value of a synthetic convertible
security may respond differently to market fluctuations than a convertible
security because a synthetic convertible is composed of two or more separate
securities, each with its own market value. In addition, if the value of the
underlying common stock or the level of the index involved in the convertible
component falls below the exercise price of the warrant or option, the warrant
or option may lose all value.

CONVERTIBLE HEDGING/SHORT SALES RISK. The Fund may incur a loss (without
limit) as a result of a short sale if the market value of the borrowed security
increases between the date of the short sale and the date the Fund replaces the
security. The Fund may be unable to repurchase the borrowed security at a
particular time or at an acceptable price. If the market price of the common
stock issuable upon exercise of a convertible security increases above the
conversion price on the convertible security, the price of the convertible
security will increase. The Fund's increased liability on the short position
would, in whole or in part, reduce this gain. If the price of the common stock
declines, any decline in the price of the convertible security would offset, in
whole or in part, the Fund's gain on the short position. The use of short sales
could increase the Fund's exposure to the market, magnify losses and increase
the volatility of returns.

LEVERAGE RISK. Leverage creates risks which may adversely affect the return
for the holders of common shares, including:

- the likelihood of greater volatility of net asset value and market price
of common shares;

- fluctuations in the dividend rates on any preferred shares or in interest
rates on borrowings and debt securities;

- increased operating costs, which may reduce the Fund's total return; and

- the potential for a decline in the value of an investment acquired with
borrowed funds, while the Fund's obligations under such borrowing remain
fixed.

Leverage is a speculative technique that could adversely affect the returns
to common shareholders. Leverage can cause the Fund to lose money and can
magnify the effect of any losses. The Fund's use of leverage is premised upon
the expectation that the Fund's leverage costs will be lower than the return the
Fund achieves on its investments with the proceeds of the issuance of preferred
shares, borrowing or issuance of debt securities. Such difference in return may
result from the Fund's higher credit rating or the short-term nature of its
borrowing compared to the long-term nature of its investments. If the total
assets

of the Fund (including the assets obtained from leverage) are invested in the
higher yielding portfolio investments or portfolio investments with the
potential for capital appreciation, the holders of common shares will be the
beneficiaries of any incremental return. If the differential between the
underlying assets and cost of leverage narrows, the incremental return "pick up"
will be reduced. Furthermore, if long-term interest rates rise or the Fund
otherwise incurs losses on its investments, the Fund's net asset value
attributable to its common shares will reflect the resulting decline in the
value of portfolio holdings.

To the extent the income or capital appreciation derived from securities
purchased with funds received from leverage exceeds the cost of leverage, the
Fund's return will be greater than if leverage had not been used. Conversely, if
the income or capital appreciation from the securities purchased with such
proceeds is not sufficient to cover the cost of leverage or if the Fund incurs
capital losses, the return of the Fund will be less than if leverage had not
been used, and therefore the amount available for distribution to common
shareholders as dividends and other distributions will be reduced or potentially
eliminated. Common shareholders bear the cost of any leverage.

If the Fund's ability to make distributions on its common shares is limited,
such limitation could, under certain circumstances, impair the ability of the
Fund to maintain its qualification for taxation as a regulated investment
company, which would have adverse tax consequences for common shareholders. To
the extent that the Fund is required, in connection with maintaining 1940 Act
asset coverage requirements or otherwise, or elects to redeem any preferred
shares or prepay any borrowings, the Fund may need to liquidate investments to
fund such redemptions or prepayments. Liquidation at times of adverse economic
conditions may result in capital loss and reduce returns to common shareholders.

Because Calamos' investment management fee is a percentage of the Fund's
managed assets, Calamos' fee will be higher if the Fund is leveraged and Calamos
will have an incentive to be more aggressive and leverage the Fund.

HIGH-YIELD SECURITIES RISK. Investment in high yield securities involves
substantial risk of loss. Below investment grade non-convertible debt securities
or comparable unrated securities are commonly referred to as "junk bonds" and
are considered predominantly speculative with respect to the issuer's ability to
pay interest and principal and are susceptible to default or decline in market
value due to adverse economic and business developments. The market values for
high yield securities tend to be very volatile, and those securities are less
liquid than investment grade debt securities. For these reasons, your investment
in the Fund is subject to the following specific risks:

- increased price sensitivity to changing interest rates and to a
deteriorating economic environment;

- greater risk of loss due to default or declining credit quality;

- adverse company specific events are more likely to render the issuer
unable to make interest and/or principal payments; and

- if a negative perception of the high yield market develops, the price and
liquidity of high yield securities may be depressed. This negative
perception could last for a significant period of time.

Securities rated below investment grade are speculative with respect to the
capacity of the issuer to pay interest and repay principal in accordance with
the terms of such securities. See the Statement of Additional Information for a
description of Moody's and Standard & Poor's ratings.

Adverse changes in economic conditions are more likely to lead to a weakened
capacity of a high yield issuer to make principal payments and interest payments
than of an investment grade issuer. The principal amount of high yield
securities outstanding has proliferated in the past decade as an increasing
number of issuers have used high yield securities for corporate financing. An
economic downturn could severely affect the ability of highly leveraged issuers
to service their debt obligations or to repay their obligations upon maturity.
Similarly, downturns in profitability in specific industries could adversely
affect the ability of high yield issuers in those industries to meet their
obligations. The market values of lower quality debt securities tend to reflect
individual developments of the issuer to a greater extent than do higher quality
securities, which react primarily to fluctuations in the general level of
interest rates. Factors having an adverse impact on the market value of lower
quality securities may have an adverse effect on the Fund's net asset value and

the market value of its common shares. In addition, the Fund may incur
additional expenses to the extent it is required to seek recovery upon a default
in payment of principal or interest on its portfolio holdings. In certain
circumstances, the Fund may be required to foreclose on an issuer's assets and
take possession of its property or operations. In such circumstances, the Fund
would incur additional costs in disposing of such assets and potential
liabilities from operating any business acquired.

The secondary market for high yield securities may not be as liquid as the
secondary market for more highly rated securities, a factor which may have an
adverse effect on the Fund's ability to dispose of a particular security. There
are fewer dealers in the market for high yield securities than for investment
grade obligations. The prices quoted by different dealers may vary significantly
and the spread between the bid and asked price is generally much larger than for
higher quality instruments. Under adverse market or economic conditions, the
secondary market for high yield securities could contract further, independent
of any specific adverse changes in the condition of a particular issuer, and
these instruments may become illiquid. As a result, the Fund could find it more
difficult to sell these securities or may be able to sell the securities only at
prices lower than if such securities were widely traded. Prices realized upon
the sale of such lower rated or unrated securities, under these circumstances,
may be less than the prices used in calculating the Fund's net asset value.

Because investors generally perceive that there are greater risks associated
with lower quality debt securities of the type in which the Fund may invest a
portion of its assets, the yields and prices of such securities may tend to
fluctuate more than those for higher rated securities. In the lower quality
segments of the debt securities market, changes in perceptions of issuers'
creditworthiness tend to occur more frequently and in a more pronounced manner
than do changes in higher quality segments of the debt securities market,
resulting in greater yield and price volatility.

RISKS ASSOCIATED WITH OPTIONS. There are several risks associated with
transactions in options. For example, there are significant differences between
the securities markets, the currency markets and the options markets that could
result in an imperfect correlation among these markets, causing a given
transaction not to achieve its objectives. A decision as to whether, when and
how to use options involves the exercise of skill and judgment, and even a well-
conceived transaction may be unsuccessful to some degree because of market
behavior or unexpected events. As the Fund writes covered calls over more of its
portfolio, its ability to benefit from capital appreciation becomes more limited
and the risk of net asset value erosion increases. If the Fund experiences net
asset value erosion, which itself may have an indirect negative effect on the
market price of the Fund's shares, the Fund will have a reduced asset base over
which to write covered calls, which may eventually lead to reduced distributions
to shareholders. The ability of the Fund to utilize options successfully will
depend on Calamos' ability to predict pertinent market investments, which cannot
be assured.

The Fund's ability to close out its position as a purchaser or seller of an
OCC or exchange listed put or call option is dependent, in part, upon the
liquidity of the option market. Among the possible reasons for the absence of a
liquid option market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities, including
reaching daily price limits; (iv) interruption of the normal operations of the
OCC or an exchange; (v) inadequacy of the facilities of an exchange or the OCC
to handle current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms. If the Fund were unable to
close out an option that it has purchased on a security, it would have to
exercise the option in order to realize any profit or the option would expire
and become worthless. If the Fund were unable to close out a covered call option
that it had written on a security, it would not be able to sell the underlying
security until the option expired. As the writer of a covered call option on a
security, the Fund foregoes, during the option's life, the opportunity to profit
from increases in the market value of the security covering the call option
above the sum of the premium and the exercise

price of the call. As the writer of a covered call option on a foreign currency,
the Fund foregoes, during the option's life, the opportunity to profit from
currency appreciation.

The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that would not have been reflected in the option markets at
their closing.

Unless the parties provide for it, there is no central clearing or guaranty
function in an OTC option. As a result, if the Counterparty (as described above
under "Options on Securities, Indexes and Currencies") fails to make or take
delivery of the security, currency or other instrument underlying an OTC option
it has entered into with a fund or fails to make a cash settlement payment due
in accordance with the terms of that option, a fund will lose any premium it
paid for the option as well as any anticipated benefit of the transaction.
Accordingly, Calamos must assess the creditworthiness of each such Counterparty
or any guarantor or credit enhancement of the Counterparty's credit to determine
the likelihood that the terms of the OTC option will be satisfied. The Fund will
engage in OTC option transactions only with U.S. government securities dealers
recognized by the Federal Reserve Bank of New York as "primary dealers" or
broker/dealers, domestic or foreign banks or other financial institutions which
have received (or the guarantors of the obligation of which have received) a
short-term credit rating of A-1 from S&P or P-1 from Moody's or an equivalent
rating from any nationally recognized statistical rating organization ("NRSRO")
or, in the case of OTC currency transactions, are determined to be of equivalent
credit quality by Calamos.

The Fund may purchase and sell call options on securities indices and
currencies. All calls sold by the Fund must be "covered." Even though the Fund
will receive the option premium to help protect it against loss, a call sold by
the Fund exposes the Fund during the term of the option to possible loss of
opportunity to realize appreciation in the market price of the underlying
security or instrument and may require the Fund to hold a security or instrument
which it might otherwise have sold. The Fund may purchase and sell put options
on securities indices and currencies. In selling put options, there is a risk
that the Fund may be required to buy the underlying security at a
disadvantageous price above the market price.

EQUITY SECURITIES RISK. Equity investments are subject to greater
fluctuations in market value than many other asset classes as a result of such
factors as the issuer's business performance, investor perceptions, stock market
trends and general economic conditions. Equity securities are subordinated to
bonds and other debt instruments in a company's capital structure in terms of
priority to corporate income and liquidation payments.

SWAPS AND RELATED SWAP PRODUCTS RISK. Swap agreements are two-party
contracts entered into primarily by institutional counterparties for periods
ranging from a few weeks to several years. In a standard swap transaction, two
parties agree to exchange the returns (or differentials in rates of return) that
would be earned or realized on specified notional investments or instruments.
The gross returns to be exchanged or "swapped" between the parties are
calculated by reference to a "notional amount," i.e., the return on or increase
in value of a particular dollar amount invested at a particular interest rate,
in a particular foreign currency or commodity, or in a "basket" of securities
representing a particular index. The purchaser of an interest rate cap or floor,
upon payment of a fee, has the right to receive payments (and the seller of the
cap or floor is obligated to make payments) to the extent a specified interest
rate exceeds (in the case of a cap) or is less than (in the case of a floor) a
specified level over a specified period of time or at specified dates. The
purchaser of an interest rate collar, upon payment of a fee, has the right to
receive payments (and the seller of the collar is obligated to make payments) to
the extent that a specified interest rate falls outside an agreed upon range
over a specified period of time or at specified dates. The purchaser of an
option on an interest rate swap, upon payment of a fee (either at the time of
purchase or in the form of higher payments or lower receipts within an interest
rate swap transaction) has the right, but not the obligation, to initiate a new
swap transaction of a pre-specified notional amount with pre-specified terms
with the seller of the option as the counterparty. The "notional amount" of a
swap transaction is the agreed upon basis for calculating the payments that the
parties have agreed to exchange. For example, one swap counterparty may agree to
pay a floating rate of interest (e.g., 3 month LIBOR)

calculated based on a $10 million notional amount on a quarterly basis in
exchange for receipt of payments calculated based on the same notional amount
and a fixed rate of interest on a semi-annual basis. In the event the Fund is
obligated to make payments more frequently than it receives payments from the
other party, it will incur incremental credit exposure to that swap
counterparty. This risk may be mitigated somewhat by the use of swap agreements
which call for a net payment to be made by the party with the larger payment
obligation when the obligations of the parties fall due on the same date. Under
most swap agreements entered into by the Fund, payments by the parties will be
exchanged on a "net basis", and the Fund will receive or pay, as the case may
be, only the net amount of the two payments.

The use of swap transactions, caps, floors and collars involves investment
techniques and risks that are different from those associated with portfolio
security transactions. If Calamos is incorrect in its forecasts of market
values, interest rates, and other applicable factors, the investment performance
of the Fund will be less favorable than if those techniques had not been used.
Those instruments are typically not traded on exchanges. Accordingly, there is a
risk that the other party to certain of these instruments will not perform its
obligations to the Fund or that the Fund may be unable to enter into offsetting
positions to terminate its exposure or liquidate its position under certain of
these instruments when it wishes to do so. Such occurrences could result in
losses to the Fund.

Calamos will consider such risks and will enter into swap and other
derivatives transactions only when it believes that the risks are not
unreasonable. The Fund will earmark and reserve the Fund assets, in cash or
liquid securities, in an amount sufficient at all times to cover its current
obligations under its swap transactions, caps, floors and collars. If the Fund
enters into a swap agreement on a net basis, it will earmark and reserve assets
with a daily value at least equal to the excess, if any, of the Fund's accrued
obligations under the swap agreement over the accrued amount the Fund is
entitled to receive under the agreement. If the Fund enters into a swap
agreement on other than a net basis, or sells a cap, floor or collar, it will
earmark and reserve assets with a daily value at least equal to the full amount
of the Fund's accrued obligations under the agreement. The Fund will not enter
into any swap transaction, cap, floor, or collar, unless the counterparty to the
transaction is deemed creditworthy by Calamos. If a counterparty defaults, the
Fund may have contractual remedies pursuant to the agreements related to the
transaction. The swap markets in which many types of swap transactions are
traded have grown substantially in recent years, with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the markets for certain types of
swaps (e.g., interest rate swaps) have become relatively liquid. The markets for
some types of caps, floors and collars are less liquid. The liquidity of swap
transactions, caps, floors and collars will be as set forth in guidelines
established by Calamos and approved by the Trustees which are based on various
factors, including: (1) the availability of dealer quotations and the estimated
transaction volume for the instrument, (2) the number of dealers and end users
for the instrument in the marketplace, (3) the level of market making by dealers
in the type of instrument, (4) the nature of the instrument (including any right
of a party to terminate it on demand) and (5) the nature of the marketplace for
trades (including the ability to assign or offset the Fund's rights and
obligations relating to the instrument). Such determination will govern whether
the instrument will be deemed within the applicable liquidity restriction on
investments in securities that are not readily marketable.

federal income tax treatment with respect to swap transactions, caps, floors,
and collars may impose limitations on the extent to which the Fund may engage in
such transactions.

CREDIT DEFAULT SWAPS RISK. Credit default swaps based on baskets or indices
(e.g., CDX Index) may require initial premium (discount) payments as well as
periodic payments (receipts) related to the interest leg of the swap or to the
default of a reference obligation.

If the Fund is a seller of a CDS contract or index, the Fund would be
required to pay the par (or other agreed upon) value of a referenced debt
obligation to the counterparty in the event of a default or other credit event
by the reference issuer, such as a U.S. or foreign corporate issuer, with
respect to such debt obligations. In return, the Fund would receive from the
counterparty a periodic stream of payments over the term of the contract
provided that no event of default has occurred. If no default occurs, the Fund
would keep the stream of payments and would have no payment obligations. As the
seller, the Fund would be subject to investment exposure on the notional amount
of the swap.

If the Fund is a buyer of a CDS contract or index, in the event of a
default or other credit event (such as a credit downgrade) by the reference
issuer, such as a U.S. or foreign corporation, with respect to its debt
obligations, the Fund would have the right to deliver a referenced debt
obligation and receive the par (or other agreed-upon) value of such debt
obligation from the counterparty. In return, the Fund would pay the counterparty
a periodic stream of payments over the term of the contract provided that no
event of default has occurred. If no default occurs, the counterparty would keep
the stream of payments and would have no further obligations to the Fund.

The use of CDS contracts or indices, like all swap agreements, is subject to
certain risks. If a counterparty's creditworthiness declines, the value of the
swap would likely decline. Moreover, there is no guarantee that the Fund could
eliminate its exposure under an outstanding swap agreement by entering into an
offsetting swap agreement with the same or another party.

INTEREST RATE RISK. Fixed income securities, including high yield
securities, are subject to certain common risks, including:

- if interest rates go up, the value of debt securities in the Fund's
portfolio generally will decline;

- during periods of declining interest rates, the issuer of a security may
exercise its option to prepay principal earlier than scheduled, forcing
the Fund to reinvest in lower yielding securities. This is known as call
or prepayment risk. Debt securities frequently have call features that
allow the issuer to repurchase the securities prior to their stated
maturity. An issuer may redeem an obligation if the issuer can refinance
the debt at a lower cost due to declining interest rates or an improvement
in the credit standing of the issuer;

- during periods of rising interest rates, the average life of certain types
of securities may be extended because of slower than expected principal
payments. This may lock in a below market interest rate, increase the
security's duration (the estimated period until the security is paid in
full) and reduce the value of the security. This is known as extension
risk; and

- market interest rates currently are at historically low levels.

DEFAULT RISK. Default risk refers to the risk that a company who issues a
debt security will be unable to fulfill its obligations to repay principal and
interest. The lower a debt security is rated, the greater its default risk.

ILLIQUID INVESTMENTS RISK. Illiquid securities may be difficult to dispose
of at a fair price at the times when the Fund believes it is desirable to do so.
Investment of the Fund's assets in illiquid securities may restrict the Fund's
ability to take advantage of market opportunities. The market price of illiquid
securities generally is more volatile than that of more liquid securities, which
may adversely affect the price that the Fund pays for or recovers upon the sale
of illiquid securities. Illiquid securities are also more difficult to value and
Calamos' judgment may play a greater role in the valuation process. The risks
associated with illiquid securities may be particularly acute in situations in
which the Fund's operations require cash and could result in the Fund borrowing
to meet its short-term needs or incurring losses on the sale of illiquid
securities.

INTEREST RATE TRANSACTIONS RISK. The Fund may enter into an interest rate
swap or cap transaction to attempt to protect itself from increasing dividend or
interest expenses on its preferred shares, debt securities or other borrowings
resulting from increasing short-term interest rates and to hedge its portfolio
securities. A decline in interest rates may result in a decline in the value of
the swap or cap, which may result in a decline in the net asset value of the
Fund.

Depending on the state of interest rates in general, the Fund's use of
interest rate swap or cap transactions could enhance or harm the overall
performance of the common shares. To the extent there is a decline in interest
rates, the value of the interest rate swap or cap could decline, and could
result in a decline in the net asset value of the common shares. In addition, if
the counterparty to an interest rate swap or cap defaults, the Fund would not be
able to use the anticipated net receipts under the swap or cap to offset the
dividend or interest payments on the Fund's leverage.

Depending on whether the Fund would be entitled to receive net payments from
the counterparty on the swap or cap, which in turn would depend on the general
state of short-term interest rates at that point in time, such a default could
negatively impact the performance of the common shares. In addition, at the time
an interest rate swap or cap transaction reaches its scheduled termination date,
there is a risk that the Fund would not be able to obtain a replacement
transaction or that the terms of the replacement would not be as favorable as on
the expiring transaction. If either of these events occurs, it could have a
negative impact on the performance of the common shares.

If the Fund fails to maintain a required 200% asset coverage of the
liquidation value of the outstanding preferred shares or if the Fund loses its
expected rating on its preferred shares or fails to maintain other covenants
with respect to its preferred shares, the Fund may be required to redeem some or
all of the preferred shares. Similarly, the Fund could be required to prepay the
principal amount of any debt securities or other borrowings. Such redemption or
prepayment would likely result in the Fund seeking to terminate early all or a
portion of any swap or cap transaction. Early termination of a swap could result
in a termination payment by or to the Fund. Early termination of a cap could
result in a termination payment to the Fund. The Fund intends to maintain in a
segregated account with its custodian cash or liquid securities having a value
at least equal to the Fund's net payment obligations under any swap transaction,
marked-to-market daily.

TAX RISK. The Fund may invest in certain securities, such as certain
convertible securities, for which the federal income tax treatment may not be
clear or may be subject to recharacterization by the Internal Revenue Service.
It could be more difficult for the Fund to comply with the tax requirements
applicable to regulated investment companies if the tax characterization of the
Fund's investments or the tax treatment of the income from such investments were
successfully challenged by the Internal Revenue Service. See "U.S. Federal
Income Tax Matters."

MANAGEMENT RISK. Calamos' judgment about the attractiveness, relative value
or potential appreciation of a particular sector, security or investment
strategy may prove to be incorrect.

ANTITAKEOVER PROVISIONS. The Fund's Agreement and Declaration of Trust and
By-laws include provisions that could limit the ability of other entities or
persons to acquire control of the Fund or to change the composition of its Board
of Trustees. Such provisions could limit the ability of shareholders to sell
their shares at a premium over prevailing market prices by discouraging a third
party from seeking to obtain control of the Fund. These provisions include
staggered terms of office for the Trustees, advance notice requirements for
shareholder proposals, and super-majority voting requirements for certain
transactions with affiliates, converting the Fund to an open-end investment
company or a merger, asset sale or similar transaction. Holders of preferred
shares will have voting rights in addition to and separate from the voting
rights of common shareholders with respect to certain of these matters. See
"Description of Shares -- Preferred Shares" and "Certain Provisions of the
Agreement and Declaration of Trust and By-Laws." The holders of preferred
shares, on the one hand, and the holders of the common shares, on the other, may
have interests that conflict in these situations.

MARKET DISRUPTION RISK. Certain events have a disruptive effect on the
securities markets, such as terrorist attacks, war and other geopolitical
events, earthquakes, storms and other disasters. The Fund cannot predict the
effects of similar events in the future on the U.S. economy or any foreign
economy.

MANAGEMENT OF THE FUND

TRUSTEES AND OFFICERS

The Fund's Board of Trustees provides broad supervision over the affairs of
the Fund. The officers of the Fund are responsible for the Fund's operations.
Currently, there are seven Trustees of the Fund, one of whom is an "interested
person" of the Trust (as defined in the 1940 Act) and six of whom are not
"interested persons." The names and business addresses of the trustees and
officers of the Fund and their principal occupations and other affiliations
during the past five years are set forth under "Management of the Fund" in the
Statement of Additional Information.

INVESTMENT ADVISER

The Fund's investments are managed by Calamos, 2020 Calamos Court,
Naperville, IL 60563. As of April 30, 2007, Calamos managed approximately $43.0
billion in assets of individuals and institutions. Calamos is a wholly-owned
subsidiary of Holdings and an indirect subsidiary of Calamos Asset Management,
Inc., a publicly-traded holding company.

INVESTMENT MANAGEMENT AGREEMENT

Subject to the overall authority of the Board of Trustees, Calamos regularly
provides the Fund with investment research, advice and supervision and furnishes
continuously an investment program for the Fund. In addition, Calamos furnishes
for use of the Fund such office space and facilities as the Fund may require for
its reasonable needs, supervises the business and affairs of the Fund and
provides the following other services on behalf of the Fund and not provided by
persons not a party to the investment management agreement: (a) preparing or
assisting in the preparation of reports to and meeting materials for the
Trustees; (b) supervising, negotiating contractual arrangements with, to the
extent appropriate, and monitoring the performance of, accounting agents,
custodians, depositories, transfer agents and pricing agents, accountants,
attorneys, printers, underwriters, brokers and dealers, insurers and other
persons in any capacity deemed to be necessary or desirable to Fund operations;
(c) assisting in the preparation and making of filings with the Commission and
other regulatory and self-regulatory organizations, including, but not limited
to, preliminary and definitive proxy materials, registration statements on Form
N-2, and amendments thereto, and semi-annual reports on Form N-SAR and Form N-
CSR; (d) overseeing the tabulation of proxies by the Fund's transfer agent; (e)
assisting in the preparation and filing of the Fund's federal, state and local
tax returns; (f) assisting in the preparation and filing of the Fund's federal
excise tax return pursuant to Section 4982 of the Internal Revenue Code of 1986,
as amended; (g) providing assistance with investor and public relations matters;
(h) monitoring the valuation of portfolio securities and the calculation of net
asset value; (i) monitoring the registration of shares of beneficial interest of
the Fund under applicable federal and state securities laws; (j) maintaining or
causing to be maintained for the Fund all books, records and reports and any
other information required under the 1940 Act, to the extent that such books,
records and reports and other information are not maintained by the Fund's
custodian or other agents of the Fund; (k) assisting in establishing the
accounting policies of the Fund; (l) assisting in the resolution of accounting
issues that may arise with respect to the Fund's operations and consulting with
the Fund's independent accountants, legal counsel and the Fund's other agents as
necessary in connection therewith; (m) reviewing the Fund's bills; (n) assisting
the Fund in determining the amount of dividends and distributions available to
be paid by the Fund to its shareholders, preparing and arranging for the
printing of dividend notices to shareholders, and providing the transfer and
dividend paying agent, the custodian, and the accounting agent with such
information as is required for such parties to effect the payment of dividends
and distributions; and (o) otherwise assisting the Fund as it may reasonably
request in the conduct of the Fund's business, subject to the direction and
control of the Trustees.

Under the investment management agreement, the Fund will pay to Calamos a
fee based on the average weekly managed assets that is computed weekly and paid
on a monthly basis. The fee paid by the Fund is at the annual rate of 1.00% of
average weekly managed assets. "Managed assets" means the total assets of the
Fund (including any assets attributable to any leverage that may be outstanding)
minus the sum of accrued liabilities (other than debt representing financial
leverage). Because the fees paid to Calamos are determined on the basis of the
Fund's managed assets, the amount of the management fees paid to Calamos if the
Fund uses leverage would be higher than if the Fund did not use leverage.
Therefore, Calamos has a financial incentive to use leverage, which would create
a conflict of interest between Calamos and the Fund's common shareholders.

Under the terms of its investment management agreement, except for the
services and facilities provided by Calamos as set forth therein, the Fund shall
assume and pay all expenses for all other Fund operations and activities and
shall reimburse Calamos for any such expenses incurred by Calamos. The expenses
borne by the Fund shall include, without limitation: (a) organization expenses
of the Fund (including out-of-pocket expenses, but not including Calamos'
overhead or employee costs), unless otherwise reimbursed or paid by Calamos; (b)
fees payable to Calamos; (c) legal expenses; (d) auditing and accounting
expenses; (e) maintenance of books and records that are required to be
maintained by the Fund's custodian or other agents of the Fund; (f) telephone,
telex, facsimile, postage and other communications expenses; (g) taxes and
governmental fees; (h) fees, dues and expenses incurred by the Fund in
connection with membership in investment company trade organizations and the
expense of attendance at professional meetings of such organizations; (i) fees
and expenses of accounting agents, custodians, sub-custodians, transfer agents,
dividend disbursing agents and registrars; (j) payment for portfolio pricing or
valuation services to pricing agents, accountants, bankers and other
specialists, if any; (k) expenses of preparing share certificates; (l) expenses
in connection with the issuance, offering, distribution, sale, redemption or
repurchase of securities issued by the Fund; (m) expenses relating to investor
and public relations provided by parties other than Calamos; (n) expenses and
fees of registering or qualifying shares of beneficial interest of the Fund for
sale; (o) interest charges, bond premiums and other insurance expenses; (p)
freight, insurance and other charges in connection with the shipment of the
Fund's portfolio securities; (q) the compensation and all expenses (specifically
including travel expenses relating to Fund business) of Trustees, officers and
employees of the Fund who are not affiliated persons of Calamos; (r) brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; (s) expenses of printing and distributing reports, notices and
dividends to shareholders; (t) expenses of preparing and setting in type,
printing and mailing prospectuses and statements of additional information of
the Fund and supplements thereto; (u) costs of stationery; (v) any litigation
expenses; (w) indemnification of Trustees and officers of the Fund; (x) costs of
shareholders' and other meetings; (y) interest on borrowed money, if any; and
(z) the fees and other expenses of listing the Fund's shares on the New York
Stock Exchange or any other national stock exchange.

PORTFOLIO MANAGER

Calamos employs a team approach to portfolio management, with teams led by
the Co-Chief Investment Officers (the "Co-CIOs") and comprised generally of the
Co-CIOs, senior strategy analysts, intermediate analysts and junior analysts.
The Co-CIOs, directors and senior strategy analysts are supported by and lead a
team of investment professionals whose valuable contributions create a synergy
of expertise that can be applied across many different investment strategies.

Portfolio holdings are reviewed and trading activity is discussed on a
regular basis by team members. Team members generally may make trading decisions
guided by each respective Fund's investment objective and strategy.

While day-to-day management of each portfolio is a team effort, the Co-CIOs,
along with the Director of Fixed Income and certain of the senior strategy
analysts, have joint primary and supervisory responsibility for the Fund and
work with all team members in developing and executing each respective
portfolio's investment program. The Fund's portfolio investment program includes
implementation of distinct strategies, including a fixed income approach which
is led by the Director of Fixed Income of Calamos. All team leaders are further
identified below.

John P. Calamos, Sr., Co-CIO of Calamos, generally focuses on the top-down
approach of diversification by industry sector and macro-level investment
themes. Nick P. Calamos, Co-CIO of Calamos, also focuses on the top-down
approach of diversification by industry sector and macro-level investment themes
and, in addition, focuses on the bottom-up approach and corresponding research
and analysis. Matthew Toms is Director of Fixed Income. John P. Calamos, Jr.,
John Hillenbrand, Steve Klouda, Jeff Scudieri and Jon Vacko are each senior
strategy analysts.

During the past five years, John P. Calamos, Sr. has been chairman, CEO and
Co-CIO of Calamos and its predecessor company. Nick P. Calamos has been Senior
Executive Vice President and Co-CIO of Calamos and its predecessor company.
Matthew Toms joined Calamos in March 2007 as Director of Fixed Income. John P.
Calamos, Jr., Executive Vice President of Calamos, joined the firm in 1985 and
has held various senior investment positions since that time. John Hillenbrand
joined Calamos in 2002 and has been a senior strategy analyst since August 2002.
Steve Klouda joined Calamos in 1994 and has been a senior strategy analyst since
July 2002. Jeff Scudieri joined Calamos in 1997 and has been a senior strategy
analyst since September 2002. Jon Vacko joined Calamos in 2000 and has been a
senior strategy analyst since July 2002.

For over 20 years, the Calamos portfolio management team has managed money
for their clients in convertible, high yield and global strategies. Furthermore,
Calamos has extensive experience investing in foreign markets through its
convertible securities and high yield securities strategies. Such experience has
included investments in established as well as emerging foreign markets. The
Fund's Statement of Additional Information provides additional information about
the team leaders, including other accounts they manage, their ownership in the
Calamos Family of Funds and their compensation.

FUND ACCOUNTANT

Under the arrangements with State Street to provide fund accounting
services, State Street provides certain administrative and accounting services
to the Fund and such other funds advised by Calamos that may be part of those
arrangements (the Fund and such other funds are collectively referred to as the
"Calamos Funds") as described more fully in the Statement of Additional
Information. For the services rendered to the Calamos Funds, State Street
receives fees based on the combined managed assets of the Calamos Funds
("Combined Assets"). Each fund of the Calamos Funds pays its pro-rata share of
the fees payable to State Street described below based on relative managed
assets of each fund. State Street receives a fee at the annual rate of .009% for
the first $5.0 billion of Combined Assets, .0075% for the next $5.0 billion of
Combined Assets, .005% for the next $5.0 billion of Combined Assets and .0035%
for the Combined Assets in excess of $15.0 billion. Because the fees payable to
State Street are based on the managed assets of the Calamos Funds, the fees
increase as the Calamos Funds increase their leverage.

In addition, Calamos also provides certain other financial accounting
services to the Calamos Funds described more fully in the statement of
additional information. For providing those services, Calamos receives a fee at
the annual rate of .0175% on the first $1 billion of the Combined Assets of the
Calamos Funds; .0150% on the next $1 billion of the Combined Assets of the
Calamos Funds; and .0110% on the Combined Assets of the Calamos Funds above $2
billion ("financial accounting service fee"). Each fund of the Calamos Funds
will pay its pro-rata share of the financial accounting service fee to Calamos
based on the Combined Assets of the fund.

DIVIDENDS AND DISTRIBUTIONS;
AUTOMATIC DIVIDEND REINVESTMENT PLAN

DIVIDENDS AND DISTRIBUTIONS

Subject to the determination of the Board of Trustees to implement a Managed
Dividend Policy, as described below, commencing with the first dividend, the
Fund intends to distribute all or a portion of its net investment income monthly
to holders of common shares. The Fund expects to declare the initial monthly
dividend on the common shares within approximately 45-60 days of the completion
of this offering and to pay that initial monthly dividend approximately 60-90
days after the completion of this

offering. The Fund may at times, and in its discretion, pay out less than the
entire amount of net investment income earned in any particular period and may
at times pay out such accumulated undistributed income in addition to net
investment income earned in other periods in order to permit the Fund to
maintain a more stable level of distributions. As a result, the dividend paid by
the Fund to holders of common shares for any particular period may be more or
less than the amount of net investment income earned by the Fund during such
period. The Fund is not required to maintain a stable level of distributions to
shareholders. For federal income tax purposes, the Fund is required to
distribute substantially all of its net investment income each year both to
reduce its federal income tax liability and to avoid a potential excise tax. The
Fund intends to distribute all net realized capital gains, if any, at least
annually.

In January 2004, Calamos, on behalf of itself and certain funds, filed an
exemptive application with the Commission seeking an order under the 1940 Act
facilitating the implementation of the Managed Dividend Policy. In March 2007,
an amended and restated exemptive application was filed with the Commission. If,
and when, Calamos, on behalf of itself and other parties, receives the requested
relief, the Fund may, subject to the determination of its Board of Trustees,
implement a Managed Dividend Policy.

Under a Managed Dividend Policy, the Fund would seek to distribute a monthly
fixed percentage of net asset value to common shareholders. If, for any
distribution, net investment income and net realized capital gains were less
than the amount of the distribution, the differences would be distributed from
the Fund's assets. In addition, in order to make such distributions, the Fund
might have to sell a portion of its investment portfolio at a time when
independent investment judgment might not dictate such action. The Fund's final
distribution for each calendar year would include any remaining net investment
income and net realized capital gains, if any, undistributed during the year.

If, for any calendar year, the Fund's total distributions exceeded its net
investment income and net realized capital gains (the "Excess"), the Excess,
distributed from the Fund's assets, would generally be treated as dividend
income to the extent of the Fund's current and accumulated earnings and profits.
Thereafter, such Excess would be treated as a tax-free return of capital to each
common shareholder up to the amount of the shareholder's tax basis in his, her
or its common shares, with any amounts exceeding such basis treated as gain from
the sale of common shares. Pursuant to the requirements of the 1940 Act and
other applicable laws, a notice would accompany each monthly distribution with
respect to the estimated source of the distribution made.

In the event the Fund distributed such Excess, the distribution would
decrease the Fund's total assets and, therefore, have the likely effect of
increasing the Fund's expense ratio. There is a risk that the Fund would not
eventually realize capital gains in an amount corresponding to a distribution of
the Excess.

LIMITATIONS ON DISTRIBUTIONS

There is no guarantee that the Fund will receive an exemptive order
facilitating the implementation of a Managed Dividend Policy or, if received,
that the Board of Trustees will determine to implement a Managed Dividend
Policy. The Board of Trustees reserves the right to change the dividend policy
from time to time.

Under the 1940 Act, the Fund is not permitted to incur indebtedness unless
immediately after such incurrence the Fund has an asset coverage of at least
300% of the aggregate outstanding principal balance of indebtedness.
Additionally, under the 1940 Act, the Fund may not declare any dividend or other
distribution upon any class of its capital shares, or purchase any such capital
shares, unless the aggregate indebtedness of the Fund has, at the time of the
declaration of any such dividend or distribution or at the time of any such
purchase, an asset coverage of at least 300% after deducting the amount of such
dividend, distribution, or purchase price, as the case may be.

While any preferred shares are outstanding, the Fund may not declare any
cash dividend or other distribution on its common shares, unless at the time of
such declaration, (1) all accumulated preferred dividends have been paid and (2)
the net asset value of the Fund's portfolio (determined after deducting the
amount of such dividend or other distribution) is at least 200% of the
liquidation value of the outstanding preferred shares (expected to be equal to
the original purchase price per share plus any accumulated and unpaid dividends
thereon) plus the amount of senior securities representing indebtedness.

In addition to the limitations imposed by the 1940 Act described above,
certain lenders may impose additional restrictions on the payment of dividends
or distributions on the common shares in the event of a default on the Fund's
borrowings. If the Fund's ability to make distributions on its common shares is
limited, such limitation could, under certain circumstances, impair the ability
of the Fund to maintain its qualification for federal income taxation as a
regulated investment company, which would have adverse tax consequences for
shareholders. See "Leverage" and "U.S. Federal Income Tax Matters."

See -- "Automatic Dividend Reinvestment Plan" for information concerning the
manner in which dividends and distributions to common shareholders may be
automatically reinvested in common shares. Dividends and distributions are
taxable to shareholders for federal income tax purposes whether they are
reinvested in shares of the Fund or received in cash.

The yield on the Fund's common shares will vary from period to period
depending on factors including, but not limited to, market conditions, the
timing of the Fund's investment in portfolio securities, the securities
comprising the Fund's portfolio, changes in interest rates including changes in
the relationship between short-term rates and long-term rates, the amount and
timing of the use of borrowings and other leverage by the Fund, the effects of
leverage on the common shares discussed above under "Leverage," the timing of
the investment of leverage proceeds in portfolio securities, the Fund's net
assets and its operating expenses. Consequently, the Fund cannot guarantee any
particular yield on its shares and the yield for any given period is not an
indication or representation of future yields on the Fund's shares.

AUTOMATIC DIVIDEND REINVESTMENT PLAN

Pursuant to the Fund's Automatic Dividend Reinvestment Plan ("Plan"), unless
a shareholder is ineligible or elects otherwise, all dividend and capital gains
distributions are automatically reinvested by The Bank of New York, as agent for
shareholders in administering the Plan ("Plan Agent"), in additional common
shares of the Fund. Shareholders who elect not to participate in the Plan will
receive all dividends and distributions payable in cash paid by check mailed
directly to the shareholder of record (or, if the shares are held in street or
other nominee name, then to such nominee) by The Bank of New York, as dividend
paying agent. Such shareholders may elect not to participate in the Plan and to
receive all dividends and distributions in cash by sending written instructions
to The Bank of New York, as dividend paying agent, at the address set forth
below. Participation in the Plan is completely voluntary and may be terminated
or resumed at any time without penalty by giving notice in writing to the Plan
Agent; such termination will be effective with respect to a particular dividend
or distribution if notice is received prior to the record date for the
applicable distribution.

Whenever the Fund declares a dividend or distribution payable either, in
shares or in cash, non-participants in the Plan will receive cash, and
participants in the Plan will receive the equivalent in shares of common shares.
The shares are acquired by the Plan Agent for the participant's account,
depending upon the circumstances described below, either (i) through receipt of
additional common shares from the Fund ("newly issued shares") or (ii) by
purchase of outstanding common shares on the open market ("open-market
purchases") on the New York Stock Exchange or elsewhere. If, on the payment
date, the net asset value per share of the common shares is equal to or less
than the market price per common share plus estimated brokerage commissions
(such condition being referred to herein as "market premium"), the Plan Agent
will receive newly issued shares from the Fund for each participant's account.
The number of newly issued common shares to be credited to the participant's
account will be determined by dividing the dollar amount of the dividend or
distribution by the greater of (i) the net asset value per common share on the
payment date, or (ii) 95% of the market price per common share on the payment
date.

If, on the payment date, the net asset value per common share exceeds the
market price plus estimated brokerage commissions (such condition being referred
to herein as "market discount"), the Plan Agent has until the last business day
before the next date on which the shares trade on an "ex-dividend" basis or in
no event more than 30 days after the payment date ("last purchase date") to
invest the dividend or distribution amount in shares acquired in open-market
purchases. It is contemplated that the Fund will pay monthly income dividends.
Therefore, the period during which open-market purchases can be made

will exist only from the payment date on the dividend through the date before
the next ex-dividend date, which typically will be approximately ten days. The
weighted average price (including brokerage commissions) of all common shares
purchased by the Plan Agent as Plan Agent will be the price per common share
allocable to each participant. If, before the Plan Agent has completed its open-
market purchases, the market price of a common share exceeds the net asset value
per share, the average per share purchase price paid by the Plan Agent may
exceed the net asset value of the Fund's shares, resulting in the acquisition of
fewer shares than if the dividend had been paid in newly issued shares on the
payment date. Because of the foregoing difficulty with respect to open-market
purchases, the Plan provides that if the Plan Agent is unable to invest the full
dividend amount in open-market purchases during the purchase period or if the
market discount shifts to a market premium during the purchase period, the Plan
Agent will cease making open-market purchases and will invest the uninvested
portion of the dividend or distribution amount in newly issued shares at the
close of business on the last purchase date.

The Plan Agent maintains all shareholders' accounts in the Plan and
furnishes written confirmation of each acquisition made for the participant's
account as soon as practicable, but in no event later than 60 days after the
date thereof. Shares in the account of each Plan participant will be held by the
Plan Agent in non-certificated form in the Plan Agent's name or that of its
nominee, and each shareholder's proxy will include those shares purchased or
received pursuant to the Plan. The Plan Agent will forward all proxy
solicitation materials to participants and vote proxies for shares held pursuant
to the Plan first in accordance with the instructions of the participants then
with respect to any proxies not returned by such participant, in the same
proportion as the Plan Agent votes the proxies returned by the participants.

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
in cash. However, each participant will pay a pro rata share of brokerage
commissions incurred with respect to the Plan Agent's open-market purchases in
connection with the reinvestment of dividends or distributions. If a participant
elects to have the Plan Agent sell part or all of his or her common shares and
remit the proceeds, such participant will be charged his or her pro rata share
of brokerage commissions on the shares sold, plus a $15 transaction fee.

The automatic reinvestment of dividends and distributions will not relieve
participants of any federal, state or local income tax that may be payable (or
required to be withheld) on such dividends. See "U.S. Federal Income Tax
Matters."

Shareholders participating in the Plan may receive benefits not available to
shareholders not participating in the Plan. If the market price plus commissions
of the Fund's shares is higher than the net asset value, participants in the
Plan will receive shares of the Fund at less than they could otherwise purchase
them and will have shares with a cash value greater than the value of the cash
distribution they would have received on their shares. If the market price plus
commissions is below the net asset value, participants receive distributions of
shares with a net asset value greater than the value of the cash distribution
they would have received on their shares. However, there may be insufficient
shares available in the market to make distributions in shares at prices below
the net asset value. Also, since the Fund does not redeem its shares, the price
on resale may be more or less than the net asset value. See "U.S. Federal Income
Tax Matters" for a discussion of the federal income tax consequences of the
Plan.

Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan if in
the judgment of the Board of Trustees such a change is warranted. The Plan may
be terminated by the Plan Agent or the Fund upon notice in writing mailed to
each participant at least 60 days prior to the effective date of the
termination. Upon any termination, the Plan Agent will cause a certificate or
certificates to be issued for the full shares held by each participant under the
Plan and cash adjustment for any fraction of a common share at the then current
market value of the common shares to be delivered to him or her. If preferred, a
participant may request the sale of all of the common shares held by the Plan
Agent in his or her Plan account in order to terminate participation in the
Plan. If such participant elects in advance of such termination to have the Plan
Agent sell part or all of his shares, the Plan Agent is authorized to deduct
from the proceeds a $15.00 fee plus the brokerage commissions incurred for the
transaction. If a participant has terminated his or her participation in the

Plan but continues to have common shares registered in his or her name, he or
she may re-enroll in the Plan at any time by notifying the Plan Agent in writing
at the address below. The terms and conditions of the Plan may be amended by the
Plan Agent or the Fund at any time but, except when necessary or appropriate to
comply with applicable law or the rules or policies of the Commission or any
other regulatory authority, only by mailing to each participant appropriate
written notice at least 30 days prior to the effective date thereof. The
amendment shall be deemed to be accepted by each participant unless, prior to
the effective date thereof, the Plan Agent receives notice of the termination of
the participant's account under the Plan. Any such amendment may include an
appointment by the Plan Agent of a successor Plan Agent, subject to the prior
written approval of the successor Plan Agent by the Fund. There is no direct
service charge to participants in the Plan; however, the Fund reserves the right
to amend the Plan to include a service charge payable by the participants.

All correspondence concerning the Plan should be directed to the Plan Agent
at Dividend Reinvestment Department, P.O. Box 1958, Newark, NJ 07101-9774.

CLOSED-END FUND STRUCTURE

The Fund is a newly organized, diversified, closed-end management investment
company (commonly referred to as a closed-end fund). Closed-end funds differ
from open-end management investment companies (which are generally referred to
as mutual funds) in that closed-end funds generally list their shares for
trading on a stock exchange and do not redeem their shares at the request of the
shareholder. This means that if you wish to sell your shares of a closed-end
fund you must sell them on the market like any other stock at the prevailing
market price at that time. In a mutual fund, if the shareholder wishes to sell
shares of the fund, the mutual fund will redeem or buy back the shares at any
time (except in certain circumstances as authorized by or under the 1940 Act) at
"net asset value," less such redemption charge, if any, as might be in effect at
the time of redemption. Also, mutual funds generally offer new shares on a
continuous basis to investors, and closed-end funds generally do not. The
continuous inflows and outflows of assets in a mutual fund can make it more
difficult to manage the fund's investments. By comparison, closed-end funds are
generally able to stay more fully invested in securities that are consistent
with their investment objectives and also have greater flexibility to make
certain types of investments and to use certain investment strategies, such as
financial leverage and investments in illiquid securities.

Shares of closed-end funds frequently trade at a discount to their net asset
value. To the extent the common shares do trade at a discount, the Fund's Board
of Trustees may, from time to time and without the approval of the Fund's
shareholders, engage in open-market repurchases or tender offers for shares. Any
such purchases or tender offers may result in the temporary narrowing of any
discount, but should not have any long-term effect on the level of any discount.
We cannot guarantee or assure, however, that the Fund's Board of Trustees will
decide to engage in any of these actions. Nor is there any guarantee or
assurance that such actions, if undertaken, would result in the shares trading
at a price equal or close to net asset value per share.

The Board of Trustees might also consider converting the Fund to an open-end
mutual fund if the common shares trade at a discount, which would also require a
vote of the shareholders of the Fund. If the Fund is converted to an open-end
mutual fund, it could be required to liquidate portfolio securities to meet
requests for redemption, and the common shares would no longer be listed on the
New York Stock Exchange. Conversion to an open-end mutual fund would also
require changes in certain of the Fund's investment policies and restrictions.
In addition, the total annual expenses of the Fund may increase in the event of
a conversion as a result of increased portfolio trading administrative expenses
associated with the operation of the Fund as an open-end mutual fund or as a
result of a decrease in the Fund's asset base resulting from redemption of
shares. Converting the Fund to an open-end mutual fund would require an
amendment to the Fund's Declaration of Trust.

In considering whether to take any of the above actions in response to any
discount in the market price of the Fund's common shares, the Board of Trustees
would consider, among other things, the benefit to shareholders of such actions
and the impact of such actions on the expenses and assets of the Fund.

When undertaking any of the actions described above, the Fund would comply with
the requirements of the Securities Exchange Act of 1934, as amended, the 1940
Act and the principal stock exchange on which the common shares are traded.

U.S. FEDERAL INCOME TAX MATTERS

The following is a description of certain U.S. federal income tax
consequences to a shareholder that acquires, holds and/or disposes of common
shares of the Fund. The discussion reflects applicable federal tax laws of the
United States as of the date of this prospectus, which tax laws may be changed
or subject to new interpretations by the courts or the Internal Revenue Service
("IRS") retroactively or prospectively. No attempt is made to present a detailed
explanation of U.S. federal income tax concerns affecting the Fund and its
shareholders, and the discussion set forth herein does not constitute tax
advice. In addition, no attempt is made to present state, local or foreign tax
concerns or tax concerns applicable to an investor with a special tax status
such as a financial institution or non-U.S. investors. INVESTORS ARE URGED TO
CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE TAX CONSEQUENCES TO THEM BEFORE
INVESTING IN THE FUND.

The Fund intends to elect to be treated, and to qualify each year, as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), so that it will not pay U.S. federal income
tax on income and capital gains distributed to shareholders. If the Fund
qualifies as a regulated investment company and distributes to its shareholders
at least 90% of the sum of (i) its "investment company taxable income" as that
term is defined in the Code (which includes, among other things, dividends,
taxable interest, the excess of any net short-term capital gains over net long-
term capital losses and certain net foreign exchange gains as reduced by certain
deductible expenses) without regard to the deduction for dividends paid and (ii)
the excess of its gross tax-exempt interest, if any, over certain disallowed
deductions, the Fund will be relieved of U.S. federal income tax on any income
of the Fund, including long-term capital gains, distributed to shareholders.
However, if the Fund retains any investment company taxable income or "net
capital gain" (the excess of net long-term capital gain over net short-term
capital loss), it will be subject to U.S. federal income tax at regular
corporate rates (currently at a maximum rate of 35%) on the amount retained. The
Fund intends to distribute at least annually all or substantially all of its
investment company taxable income, net tax-exempt interest, if any, and net
capital gain. Under the Code, the Fund will generally be subject to a
nondeductible 4% federal excise tax on the portion of its undistributed ordinary
income and capital gains if it fails to meet certain distribution requirements
with respect to each calendar year. The Fund intends to make distributions in a
timely manner and accordingly does not expect to be subject to the excise tax.

If for any taxable year the Fund did not qualify as a regulated investment
company for U.S. federal income tax purposes, it would be treated as a
corporation subject to U.S. federal income tax and distributions to its
shareholders would not be deducted by the Fund in computing its taxable income.
In such event, the Fund's distributions, to the extent derived from the Fund's
current or accumulated earnings and profits, would generally constitute ordinary
dividends, which would generally be eligible for the dividends received
deduction available to corporate shareholders, and non-corporate shareholders
would generally be able to treat such distributions as "qualified dividend
income" eligible for reduced rates of federal income taxation in taxable years
beginning on or before December 31, 2010.

Unless a shareholder is ineligible to participate or elects otherwise, all
distributions will be automatically reinvested in additional common shares of
the Fund pursuant to the Plan. For U.S. federal income tax purposes, all
dividends are taxable whether a shareholder takes them in cash or they are
reinvested pursuant to the Plan in additional shares of the Fund. Distributions
of net investment income, other than "qualified dividend income," are taxable
for federal income tax purposes at ordinary income tax rates. Distributions
designated as "qualified dividend income" are generally taxed to non-corporate
investors at rates applicable to long-term capital gains, provided certain
holding period and other requirements contained in the Code are satisfied at
both the Fund and shareholder levels. The provisions of the Code applicable to
"qualified dividend income" are currently effective for taxable years beginning
on or before December 31, 2010. Distributions of net capital gain (i.e., the
excess of net long-term capital gain over net

short-term capital loss) are taxable for federal income tax purposes as long-
term capital gain regardless of how long the shareholder has held shares of the
Fund. Distributions of net short-term capital gain (i.e., net short-term capital
gain less any net long-term capital loss) are taxable as ordinary income
regardless of how long the shareholder has held shares of the Fund. Dividends
paid by the Fund may qualify in part for the "dividends received deduction"
available to corporate shareholders under Section 243 of the Code, provided
certain holding period and other requirements are satisfied at both the Fund and
shareholder levels. A distribution of an amount in excess of the Fund's current
and accumulated earnings and profits, if any, will be treated by a shareholder
as a tax-free return of capital which is applied against and reduces the
shareholder's basis in his or her shares. To the extent that the amount of any
such distribution exceeds the shareholder's basis in his or her shares, the
excess will be treated by the shareholder as gain from the sale or exchange of
shares. The U.S. federal income tax status of all distributions will be
designated by the Fund and reported to shareholders annually.

If the Fund retains any net capital gain, the Fund may designate the
retained amount as undistributed capital gains in a notice to shareholders who,
if subject to U.S. federal income tax on long-term capital gains, (i) will be
required to include in income as long-term capital gain, their proportionate
share of such undistributed amount, and (ii) will be entitled to credit their
proportionate share of the federal income tax paid by the Fund on the
undistributed amount against their U.S. federal income tax liabilities, if any,
and to claim refunds to the extent the credit exceeds such liabilities. If such
an event occurs, the tax basis of shares owned by a shareholder of the Fund
will, for U.S. federal income tax purposes, generally be increased by the
difference between the amount of undistributed net capital gain included in the
shareholder's gross income and the federal income tax deemed paid by the
shareholders.

If a shareholder's distributions are automatically reinvested pursuant to
the Plan and the Plan Agent invests the distribution in shares acquired on
behalf of the shareholder in open-market purchases, for U.S. federal income tax
purposes, the shareholder will be treated as having received a taxable
distribution in the amount of the cash dividend that the shareholder would have
received if the shareholder had elected to receive cash. If a shareholder's
distributions are automatically reinvested pursuant to the Plan and the Plan
Agent invests the distribution in newly issued shares of the Fund, the
shareholder will be treated as receiving a taxable distribution equal to the
fair market value of the shares the shareholder receives.

To the extent that the Fund is liable for foreign income taxes, the Fund may
make an election under Section 853 of the Code to "pass through" to the Fund's
shareholders the foreign income taxes it pays, if more than 50% of the value of
the Fund's total assets at the close of the taxable year consists of stock or
securities of foreign corporations. If this election is made, shareholders will
generally be able to claim a credit or deduction (but not both) on their federal
income tax returns for, and will be required to treat as part of the amounts
distributed to them, their pro rata portion of the income taxes paid by the Fund
to foreign countries (which taxes relate primarily to investment income). The
shareholders of the Fund may claim a federal income tax credit by reason of the
Fund's election, subject to certain limitations imposed by the Code. Also, under
the Code, no deduction for foreign taxes may be claimed by individual
shareholders who do not elect to itemize deductions on their federal income tax
returns, although such a shareholder may be able to claim a credit for foreign
taxes paid and in any event will be treated as having taxable income in the
amount of the shareholder's pro rata share of foreign taxes paid by the Fund. If
the Fund does not make such an election, the foreign taxes paid by the Fund will
reduce the Fund's net investment income. In such a case, shareholders will not
be able to claim either a credit or a deduction for their pro rata portion of
such taxes paid by the Fund, nor will shareholders be required to treat as part
of the amounts distributed to them their pro rata portion of such taxes paid.

or other dispositions of shares may be disallowed under the "wash sale" rules in
the event of other investments in the Fund (including those made pursuant to
reinvestment of dividends) or in other substantially identical stock or
securities within a period of 61 days beginning 30 days before and ending 30
days after a sale or other disposition of shares. In such a case, the disallowed
portion of any loss generally would be included in the U.S. federal income tax
basis of the shares acquired in the other investments.

The Fund is required in certain circumstances to backup withhold at a
current rate of 28% on reportable payments including dividends, capital gain
distributions, and proceeds of sales or other dispositions of the Fund's shares
paid to certain holders of the Fund's shares who do not furnish the Fund with
their correct social security number or other taxpayer identification number and
certain other certifications, or who are otherwise subject to backup
withholding. Backup withholding is not an additional tax. Any amounts withheld
from payments made to a shareholder may be refunded or credited against such
shareholder's U.S. federal income tax liability, if any, provided that the
required information is furnished to the IRS.

THE FOREGOING IS A GENERAL AND ABBREVIATED SUMMARY OF THE PROVISIONS OF THE
CODE AND THE TREASURY REGULATIONS THEREUNDER IN EFFECT AS THEY DIRECTLY GOVERN
THE TAXATION OF THE FUND AND ITS SHAREHOLDERS. THESE PROVISIONS ARE SUBJECT TO
CHANGE BY LEGISLATIVE OR ADMINISTRATIVE ACTION, AND ANY SUCH CHANGE MAY BE
RETROACTIVE. A MORE COMPLETE DISCUSSION OF THE FEDERAL INCOME TAX RULES
APPLICABLE TO THE FUND CAN BE FOUND IN THE STATEMENT OF ADDITIONAL INFORMATION
WHICH IS INCORPORATED BY REFERENCE INTO THIS PROSPECTUS. SHAREHOLDERS ARE URGED
TO CONSULT THEIR TAX ADVISORS REGARDING SPECIFIC QUESTIONS AS TO U.S. FEDERAL,
FOREIGN, STATE, AND LOCAL INCOME OR OTHER TAXES BEFORE MAKING AN INVESTMENT IN
THE FUND.

NET ASSET VALUE

Net asset value per common share is determined as of the close of regular
session trading on the New York Stock Exchange (usually 4:00 p.m., Eastern
time), on the last business day in each week. Net asset value is calculated by
dividing the value of all of the securities and other assets of the Fund, less
its liabilities (including accrued expenses and indebtedness) and the aggregate
liquidation value of any outstanding preferred shares, by the total number of
common shares outstanding. Currently, the net asset values of shares of publicly
traded closed-end investment companies are published in Barron's, the Monday
edition of The Wall Street Journal and the Monday and Saturday editions of The
New York Times.

The values of the securities in the Fund are based on market prices from the
primary market in which they are traded. As a general rule, equity securities
listed on a U.S. securities exchange are valued at the last current reported
sale price as of the time of valuation. Securities quoted on the NASDAQ National
Market System are valued at the Nasdaq Official Closing Price ("NOCP"), as
determined by Nasdaq, or lacking an NOCP, at the last current reported sale
price as of the time of valuation. Bonds and other fixed-income securities that
are traded over the counter or on an exchange will be valued according to the
broadest and most representative market, and it is expected this will ordinarily
be the over-the-counter market. Foreign securities held by the Fund are traded
on exchanges throughout the world. Trading on these foreign securities exchanges
is completed at various times throughout the day and often does not coincide
with the close of trading on the New York Stock Exchange. The value of foreign
securities is determined at the last current reported sale price at the close of
trading of the exchange on which the securities are traded or at the close of
trading on the New York Stock Exchange, whichever is earlier. If market prices
for a security are not readily available or the Fund's valuation methods do not
produce a value reflective of a fair value of the security, that security and
other assets are priced at a fair value as determined by the Board of Trustees
or a committee thereof.

DESCRIPTION OF SHARES

The Fund is authorized to issue an unlimited number of common shares,
without par value. The Fund is also authorized to issue preferred shares. Upon
the completion of this offering, the Fund will only have common shares
outstanding. The Board of Trustees is authorized, however, to classify and
reclassify

any unissued shares into one or more additional classes or series of shares. The
Board of Trustees may establish such series or class, including preferred
shares, from time to time by setting or changing in any one or more respects the
designations, preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or conditions
of redemption of such shares and pursuant to such classification or
reclassification to increase or decrease the number of authorized shares of any
existing class or series. The Board of Trustees, without shareholder approval,
is authorized to amend the Agreement and Declaration of Trust and By-laws to
reflect the terms of any such class or series, including any class of preferred
shares. The Fund currently anticipates that it will issue cumulative preferred
shares as soon as practicable after the closing of this offering. See
"Leverage." The Fund is also authorized to issue other securities, including
debt securities.

COMMON SHARES

Common shares, when issued and outstanding, will be fully paid and non-
assessable. Shareholders are entitled to share pro rata in the net assets of the
Fund available for distribution to common shareholders upon liquidation of the
Fund. Common shareholders are entitled to one vote for each share held.

In the event that the Fund issues preferred shares and so long as any shares
of the Fund's preferred shares are outstanding, holders of common shares will
not be entitled to receive any net income of, or other distributions from, the
Fund unless all accumulated dividends on preferred shares have been paid, and
unless asset coverage (as defined in the 1940 Act) with respect to preferred
shares would be at least 200% after giving effect to such distributions. See
"Leverage."

The Fund will send unaudited reports at least semiannually and audited
annual financial statements to all of its shareholders.

Calamos provided the initial capital for the Fund by purchasing common
shares of the Fund for $100,000. As of the date of this prospectus, Calamos
owned 100% of the outstanding common shares. Calamos may be deemed to control
the Fund until such time as it owns less than 25% of the outstanding shares of
the Fund.

PREFERRED SHARES

The Fund currently anticipates issuing, as soon as practicable after the
closing of this offering, cumulative preferred shares with an aggregate
liquidation preference of up to approximately 33% of the Fund's total assets
immediately after issuance. As a non-fundamental policy, the Fund may not issue
preferred shares, borrow money or issue debt securities with an aggregate
liquidation preference and aggregate principal amount that exceeds 38% of the
Fund's total assets immediately after issuance. However, the Fund reserves the
right to issue preferred shares to the extent permitted by the 1940 Act, which
currently limits the aggregate liquidation preference of all outstanding
preferred shares to 50% of the value of the Fund's total assets less the Fund's
liabilities and indebtedness. Although the terms of any preferred shares,
including dividend rate, liquidation preference and redemption provisions, will
be determined by the Board of Trustees, subject to applicable law and the
Agreement and Declaration of Trust, it is likely that the preferred shares will
be structured to carry a relatively short-term dividend rate reflecting interest
rates on short-term bonds by providing for the periodic redetermination of the
dividend rate at relatively short intervals through an auction, remarketing or
other procedure. The Fund also believes that it is likely that the liquidation
preference, voting rights and redemption provisions of the preferred shares will
be similar to those stated below.

In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Fund, the holders of preferred shares will be entitled to
receive a preferential liquidating distribution, which is expected to equal the
original purchase price per preferred share plus accumulated and unpaid
dividends, whether or not declared, before any distribution of assets is made to
holders of common shares. After payment of the full amount of the liquidating
distribution to which they are entitled, the holders of preferred shares will
not be entitled to any further participation in any distribution of assets by
the Fund.

The 1940 Act requires that the holders of any preferred shares, voting
separately as a single class, have the right to elect at least two Trustees at
all times. The remaining Trustees will be elected by holders of common shares
and preferred shares, voting together as a single class. In addition, subject to
the prior rights, if any, of the holders of any other class of senior securities
outstanding, the holders of any preferred shares have the right to elect a
majority of the Trustees at any time two years' accumulated dividends on any
preferred shares are unpaid. The 1940 Act also requires that, in addition to any
approval by shareholders that might otherwise be required, the approval of the
holders of a majority of any outstanding preferred shares, voting separately as
a class, would be required to (1) adopt any plan of reorganization that would
adversely affect the preferred shares, and (2) take any action requiring a vote
of security holders under Section 13(a) of the 1940 Act, including, among other
things, changes in the Fund's subclassification as a closed-end investment
company or changes in its fundamental investment restrictions. See "Certain
Provisions of the Agreement and Declaration of Trust and By-Laws." As a result
of these voting rights, the Fund's ability to take any such actions may be
impeded to the extent that there are any preferred shares outstanding. The Board
of Trustees presently intends that, except as otherwise indicated in this
prospectus and except as otherwise required by applicable law, holders of
preferred shares will have equal voting rights with holders of common shares
(one vote per share, unless otherwise required by the 1940 Act) and will vote
together with holders of common shares as a single class.

The affirmative vote of the holders of a majority of the outstanding
preferred shares, voting as a separate class, will be required to amend, alter
or repeal any of the preferences, rights or powers of holders of preferred
shares so as to affect materially and adversely such preferences, rights or
powers, or to increase or decrease the authorized number of preferred shares.
The class vote of holders of preferred shares described above will in each case
be in addition to any other vote required to authorize the action in question.

The terms of the preferred shares are expected to provide that (i) they are
redeemable by the Fund in whole or in part at the original purchase price per
share plus accrued dividends per share, (ii) the Fund may tender for or purchase
preferred shares and (iii) the Fund may subsequently resell any shares so
tendered for or purchased. Any redemption or purchase of preferred shares by the
Fund will reduce the leverage applicable to the common shares, while any resale
of shares by the Fund will increase that leverage.

The discussion above describes the possible offering of preferred shares by
the Fund. If the Board of Trustees determines to proceed with such an offering,
the terms of the preferred shares may be the same as, or different from, the
terms described above, subject to applicable law and the Agreement and
Declaration of Trust. The Board of Trustees, without the approval of the holders
of common shares, may authorize an offering of preferred shares or may determine
not to authorize such an offering, and may fix the terms of the preferred shares
to be offered.

CERTAIN PROVISIONS OF THE AGREEMENT AND
DECLARATION OF TRUST AND BY-LAWS

The Fund's Agreement and Declaration of Trust includes provisions that could
have the effect of limiting the ability of other entities or persons to acquire
control of the Fund or to change the composition of its Board of Trustees and
could have the effect of depriving shareholders of an opportunity to sell their
shares at a premium over prevailing market prices by discouraging a third party
from seeking to obtain control of the Fund. These provisions, however, have the
advantage of potentially requiring persons seeking control of the Fund to
negotiate with its management regarding the price to be paid and facilitating
the continuity of the Fund's investment objective and policies. The Board of
Trustees of the Fund has considered these provisions and concluded that they are
in the best interests of the Fund.

The Board of Trustees is divided into three classes and the terms of the
Trustees of the different classes are staggered. A Trustee may be removed from
office with or without cause by a vote of at least a majority of the then
Trustees if such removal is approved by the holders of at least two-thirds of
the shares entitled to vote with respect to the election of such Trustee and
present in person or by proxy at a meeting of shareholders called for such
purpose.

In addition, the Agreement and Declaration of Trust requires the affirmative
vote of at least 75% of the outstanding shares entitled to vote on the matter
for the Trust to merge or consolidate with any other corporation, association,
trust or other organization or to sell, lease or exchange all or substantially
all of the Fund's assets; unless such action has been approved, adopted or
authorized by the affirmative vote of at least 75% of the Trustees then in
office, in which case, the affirmative vote of a majority of the outstanding
shares entitled to vote on the matter is required.

In addition, conversion of the Fund to an open-end investment company would
require an amendment to the Fund's Agreement and Declaration of Trust. Such an
amendment would require the favorable vote of a majority of the then Trustees
followed by a favorable vote of the holders of at least 75% of the shares
entitled to vote on the matter, voting as separate classes or series (or a
majority of such shares if the amendment was previously approved by 75% of the
Trustees). Such a vote also would satisfy a separate requirement in the 1940 Act
that the change be approved by the shareholders.

In addition, the Agreement and Declaration of Trust requires the affirmative
vote or consent of a majority of the then Trustees followed by the affirmative
vote or consent of the holders of at least 75% of the shares of each affected
class or series of the Fund outstanding, voting separately as a class or series,
to approve, adopt or authorize certain transactions with 5% or greater holders
of a class or series of shares and their associates, unless the transaction has
been approved by at least 75% of the Trustees, in which case a majority of the
outstanding shares entitled to vote shall be required. For purposes of these
provisions, a 5% or greater holder of a class or series of shares (a "Principal
Shareholder") refers to any person who, whether directly or indirectly and
whether alone or together with its affiliates and associates, beneficially owns
5% or more of the outstanding shares of any class or series of shares of
beneficial interest of the Fund. The 5% holder transactions subject to these
special approval requirements are:

- the merger or consolidation of the Fund or any subsidiary of the Fund with
or into any Principal Shareholder;

- the issuance of any securities of the Fund to any Principal Shareholder
for cash; or

- the sale, lease or exchange to the Fund or any subsidiary of the Fund in
exchange for securities of the Fund, of any assets of any Principal
Shareholder, except assets having an aggregate fair market value of less
than $1,000,000, aggregating for the purpose of such computation all
assets sold, leased or exchanged in any series of similar transactions
within a 12-month period.

The Fund may be terminated by the affirmative vote of not less than 75% of
the Trustees then in office by written notice to the shareholders.

The Agreement and Declaration of Trust and By-laws provide that the Board of
Trustees has the power, to the exclusion of shareholders, to make, alter or
repeal any of the By-laws (except for any By-law specified not to be amended or
repealed by the Board), subject to the requirements of the 1940 Act. Neither
this provision of the Agreement and Declaration of Trust, nor any of the
foregoing provisions thereof requiring the affirmative vote of 75% of
outstanding shares of the Fund, can be amended or repealed except by the vote of
such required number of shares.

The Fund's By-laws generally require that advance notice be given to the
Fund in the event a shareholder desires to nominate a person for election to the
Board of Trustees or to transact any other business at an annual meeting of
shareholders. With respect to an annual meeting following the first annual
meeting of shareholders, notice of any such nomination or business must be
delivered to or received at the principal executive offices of the Fund not less
than 90 calendar days nor more than 120 calendar days prior to the anniversary
date of the prior year's annual meeting (subject to certain exceptions). In the
case of the first annual meeting of shareholders, the notice must be given no
later than the tenth calendar day following public disclosure as specified in
the By-laws of the date of the meeting. Any notice by a shareholder must be
accompanied by certain information as provided in the By-laws.

UNDERWRITING

Wachovia Capital Markets, LLC and Citigroup Global Markets Inc. are acting
as representatives of the underwriters named below. Subject to the terms and
conditions stated in the Fund's underwriting agreement dated the date hereof,
each underwriter named below has severally agreed to purchase, and the Fund has
agreed to sell to such underwriter, the number of common shares set forth
opposite the name of such underwriter.

NUMBER OF
UNDERWRITERS SHARES
------------ ----------

Wachovia Capital Markets, LLC...................................... 16,500,000
Citigroup Global Markets Inc. ..................................... 21,000,000
Robert W. Baird & Co. Incorporated................................. 750,000
BB&T Capital Markets, a division of Scott & Stringfellow, Inc. .... 275,000
H&R Block Financial Advisors, Inc. ................................ 3,115,000
Crowell, Weedon & Co. ............................................. 150,000
Doft & Co., Inc. .................................................. 300,000
Ferris, Baker Watts, Incorporated.................................. 400,000
Janney Montgomery Scott LLC........................................ 1,400,000
Morgan Keegan & Company, Inc. ..................................... 700,000
RBC Capital Markets Corporation.................................... 4,015,000
Ryan Beck & Co., Inc. ............................................. 400,000
Southwest Securities, Inc. ........................................ 150,000
Stifel, Nicolaus & Company, Incorporated........................... 800,000
Wedbush Morgan Securities Inc. .................................... 700,000
Wells Fargo Securities, LLC........................................ 900,000
Aegis Capital Corp. ............................................... 240,000
Deutsche Bank Securities Inc. ..................................... 240,000
Dominick & Dominick LLC............................................ 240,000
A.G. Edwards & Sons, Inc. ......................................... 240,000
The GMS Group, LLC................................................. 240,000
J. B. Hanauer & Co. ............................................... 240,000
Johnston, Lemon & Co. Incorporated................................. 240,000
Maxim Group LLC.................................................... 240,000
Mesirow Financial, Inc. ........................................... 240,000
David A. Noyes & Company........................................... 240,000
Oppenheimer & Co. Inc. ............................................ 240,000
Sterne, Agee & Leach, Inc. ........................................ 240,000
Stockcross Financial Services, Inc. ............................... 240,000
1st Discount Brokerage, Inc. ...................................... 75,000
Bishop, Rosen & Co., Inc. ......................................... 75,000
Dawson James Securities, Inc. ..................................... 75,000
E*TRADE Securities LLC............................................. 75,000
GunnAllen Financial, Inc. ......................................... 75,000
Hennion & Walsh, Inc. ............................................. 75,000
Howe Barnes Hoefer & Arnett, Inc. ................................. 75,000
Royal Alliance Associates, Inc. ................................... 75,000
R. M. Stark Co., Inc. ............................................. 75,000
Wunderlich Securities, Inc. ....................................... 75,000
B. C. Ziegler & Company............................................ 75,000
William Blair & Company L.L.C. .................................... 25,000
Capital Growth Financial, LLC...................................... 25,000
Chicago Investment Group, LLC...................................... 25,000
D.A. Davidson & Co. ............................................... 25,000
First Montauk Securities Corp. .................................... 25,000
Gilford Securities Incorporated.................................... 25,000
Andrew Garrett, Inc. .............................................. 25,000
Joseph Gunnar & Co., LLC........................................... 25,000

NUMBER OF
UNDERWRITERS SHARES
------------ ----------

Bernard Herold & Co., Inc. ........................................ 25,000
Huntleigh Securities Corporation................................... 25,000
Wayne Hummer Investments L.L.C..................................... 25,000
McGinn, Smith & Co., Inc. ......................................... 25,000
Milkie/Ferguson Investments, Inc. ................................. 25,000
Newbridge Securities Corporation................................... 25,000
Herbert J. Sims & Co., Inc. ....................................... 25,000
R. Seelaus and Co., Inc. .......................................... 25,000
Stonnington Group, LLC............................................. 25,000
Summit Brokerage Services, Inc. ................................... 25,000
TD Ameritrade, Inc. ............................................... 25,000
J. P. Turner & Company, L.L.C. .................................... 25,000
----------
TOTAL.............................................................. 56,000,000
==========

The underwriting agreement provides that the obligations of the underwriters
to purchase the common shares included in this offering are subject to approval
of legal matters by counsel and to other conditions. The underwriters are
obligated to purchase all the common shares (other than those covered by the
over-allotment option described below) if they purchase any of the common
shares.

The underwriters propose to offer some of the common shares directly to the
public at the public offering price set forth on the cover page of this
prospectus and some of the common shares to dealers at the public offering price
less a concession not to exceed $0.450 per common share. The sales load the Fund
will pay of $0.675 per common share is equal to 4.500% of the initial offering
price. The underwriters may allow, and such dealers may reallow, a concession
not to exceed $0.10 per common share on sales to certain other dealers. If all
of the common shares are not sold at the initial offering price, the
representatives may change the public offering price and other selling terms.
Investors must pay for any common shares purchased on or before June 29, 2007.
The representatives have advised the Fund that the underwriters do not intend to
confirm any sales to any accounts over which they exercise discretionary
authority.

ADDITIONAL COMPENSATION TO UNDERWRITERS AND AFFILIATES

Calamos (and not the Fund) has agreed to pay to Wachovia Capital Markets,
LLC, from its own assets, a structuring fee for assisting Calamos with respect
to the structure, design and organization of the Fund as well as for services
related to the sale and distribution of the Fund's common shares in the amount
of $2,699,343.75. The structuring fee paid to Wachovia Capital Markets, LLC will
not exceed 0.3214% of the total public offering price of the common shares sold
in this offering.

Calamos (and not the Fund) has agreed to pay to Citigroup Global Markets
Inc., from its own assets, a structuring fee for advice relating to the
structure, design and organization of the Fund as well as services related to
the sale and distribution of the Fund's common shares in the amount of
$3,803,059.50. The structuring fee paid to Citigroup Global Markets Inc. will
not exceed 0.4527% of the total public offering price of the common shares sold
in this offering.

Calamos (and not the Fund) has agreed to pay from its own assets to H&R
Block Financial Advisors, Inc. a sales incentive fee in the amount of
$114,153.11. The sales incentive fee paid to H&R Block Financial Advisors, Inc.
will not exceed 0.0136% of the total public offering price of the common shares
sold in this offering.

Calamos (and not the Fund) has agreed to pay from its own assets to RBC
Capital Markets Corporation a sales incentive fee in the amount of $287,250.00.
The sales incentive fee paid to RBC Capital Markets Corporation will not exceed
0.0342% of the total public offering price of the common shares sold in this
offering.

The total amount of the underwriter compensation payments described above
will not exceed 4.5% of the total public offering price of the common shares
offered hereby. The sum total of all compensation to the underwriters in
connection with this public offering of common shares, including the sales load
and all forms of structuring or sales incentive fee payments to the underwriters
and other expenses, will be 5.3237% of the total public offering price of the
common shares sold in this offering.

The Fund has granted to the underwriters an option, exercisable for 45 days
from the date of this prospectus, to purchase up to 7,665,000 additional common
shares at the public offering price less the sales load. The underwriters may
exercise such option solely for the purpose of covering over-allotments, if any,
in connection with this offering. To the extent such option is exercised, each
underwriter will be obligated, subject to certain conditions, to purchase a
number of additional common shares approximately proportionate to such
underwriter's initial purchase commitment.

The Fund and Calamos have agreed that, for a period of 180 days from the
date of this prospectus, they will not, without the prior written consent of
Wachovia Capital Markets, LLC, on behalf of the underwriters, dispose of or
hedge any common shares or any securities convertible into or exchangeable for
common shares. Wachovia Capital Markets, LLC in its sole discretion, may release
any of the securities subject to these agreements at any time without notice.

To meet the NYSE distribution requirements for trading, the underwriters
have undertaken to sell common shares in a manner such that shares are held by a
minimum of 400 beneficial owners in lots of 100 or more, at least 1,100,000
shares are publicly held in the United States and the aggregate market value of
publicly held shares in the United States is at least $60 million. The common
shares have been approved for listing on the NYSE under the symbol "CHW,"
subject to notice of issuance.

The following table shows the sales load that the Fund will pay to the
underwriters in connection with this offering. These amounts are shown assuming
both no exercise and full exercise of the underwriters' option to purchase
additional common shares.

PAID BY FUND
---------------------------
NO EXERCISE FULL EXERCISE
----------- -------------

Per share......................................... $ 0.675 $ 0.675
Total........................................... $37,800,000 $42,973,875

The Fund and Calamos have agreed to indemnify the underwriters against
certain liabilities, including liabilities under the Securities Act of 1933, or
to contribute to payments the underwriters may be required to make because of
any of those liabilities.

Certain underwriters may make a market in the common shares after trading in
the common shares has commenced on the NYSE. No underwriter is, however,
obligated to conduct market-making activities and any such activities may be
discontinued at any time without notice, at the sole discretion of the
underwriter. No assurance can be given as to the liquidity of, or the trading
market for, the common shares as a result of any market-making activities
undertaken by any underwriter. This prospectus is to be used by any underwriter
in connection with the offering and, during the period in which a prospectus
must be delivered, with offers and sales of the common shares in market-making
transactions in the over-the-counter market at negotiated prices related to
prevailing market prices at the time of the sale.

In connection with the offering, Wachovia Capital Markets, LLC, on behalf of
itself and the other underwriters, may purchase and sell common shares in the
open market. These transactions may include short sales, syndicate covering
transactions and stabilizing transactions. Short sales involve syndicate sales
of common shares in excess of the number of common shares to be purchased by the
underwriters in the offering, which creates a syndicate short position.
"Covered" short sales are sales of common shares made in an amount up to the
number of common shares represented by the underwriters' over-allotment option.
In determining the source of common shares to close out the covered syndicate
short position, the underwriters will consider, among other things, the price of
common shares available for purchase in the open market as compared to the price
of which they may purchase common shares through the over-

allotment option. Transactions to close out the covered syndicate short position
involve either purchases of common shares in the open market after the
distribution has been completed or the exercise of the over-allotment option.
The underwriters may also make "naked" short sales of common shares in excess of
the over-allotment option. The underwriters must close out any naked short
position by purchasing common shares in the open market. A naked short position
is more likely to be created if the underwriters are concerned that there may be
downward pressure on the price of common shares in the open market after pricing
that could adversely affect investors who purchase in the offering. Stabilizing
transactions consist of bids for or purchases of common shares in the open
market while the offering is in progress.

The underwriters may impose a penalty bid. Penalty bids permit the
underwriting syndicate to reclaim selling concessions allowed to an underwriter
or a dealer for distributing common shares in this offering if the syndicate
repurchases common shares to cover syndicate short positions or to stabilize the
purchase price of the common shares.

Any of these activities may have the effect of preventing or retarding a
decline in the market price of common shares. They may also cause the price of
common shares to be higher than the price that would otherwise exist in the open
market in the absence of these transactions. The underwriters may conduct these
transactions on the NYSE or in the over-the-counter market, or otherwise. If the
underwriters commence any of these transactions, they may discontinue them at
any time.

A prospectus in electronic format may be available on the website maintained
by one or more of the underwriters. The representatives may agree to allocate a
number of common shares to the underwriters for sale to their online brokerage
account holders. The representatives will allocate common shares to the
underwriters that may make internet distributions on the same basis as other
allocations. In addition, common shares may be sold by the underwriters to
securities dealers who resell common shares to online brokerage account holders.

Prior to the initial public offering of common shares, Calamos purchased
common shares from the Fund in an amount satisfying the net worth requirements
of Section 14(a) of the Investment Company Act.

The Fund anticipates that, from time to time, certain of the underwriters
may act as brokers or dealers in connection with the execution of the Fund's
portfolio transactions after they have ceased to be underwriters and, subject to
certain restrictions, may act as brokers while they are underwriters.

Certain underwriters may, from time to time, engage in transactions with or
perform services for Calamos and its affiliates in the ordinary course of
business.

The principal business address of Wachovia Capital Markets, LLC is 375 Park
Avenue, New York, New York 10152. The principal business address of Citigroup
Global Markets Inc. is 388 Greenwich Street, New York, New York 10013.

SELLING RESTRICTIONS

No action has been taken in any jurisdiction (except in the United States)
that would permit a public offering of the common shares, or the possession,
circulation or distribution of this prospectus or any other material relating to
the Fund or the common shares in any jurisdiction where action for that purpose
is required. Accordingly, the common shares may not be offered or sold, directly
or indirectly, and neither this prospectus nor any other offering material or
advertisements in connection with the common shares may be distributed or
published, in or from any country or jurisdiction except in compliance with any
applicable rules and regulations of any such country or jurisdiction, and will
not impose any obligations on the Fund, the underwriters, Wachovia Securities,
LLC, Wachovia Securities Financial Network, LLC or any broker-dealer affiliate
of Wachovia.

The common shares offered pursuant to this prospectus are not being
registered under the Securities Act of 1933 for the purpose of sales outside the
United States.

ARGENTINA. THE COMMON SHARES WILL NOT BE PUBLICLY OFFERED IN ARGENTINA.
THEREFORE, THIS PROSPECTUS HAS NOT BEEN, AND WILL NOT BE, REGISTERED WITH THE
COMISION NACIONAL DE VALORES. THIS OFFER DOES NOT CONSTITUTE A PUBLIC OFFERING
OF COMMON SHARES WITHIN THE SCOPE OF THE ARGENTINE SECURITIES LAW N degrees
17.811. THIS PROSPECTUS AND OTHER OFFERING MATERIALS RELATING TO THE OFFER OF
THE COMMON SHARES ARE BEING SUPPLIED ONLY TO THOSE INVESTORS WHO HAVE EXPRESSLY
REQUESTED IT. THEY ARE STRICTLY CONFIDENTIAL AND MAY NOT BE DISTRIBUTED TO ANY
PERSON OR ENTITY OTHER THAN THE RECIPIENTS HEREOF.

AUSTRALIA. THIS PROSPECTUS HAS NOT BEEN AND WILL NOT BE LODGED WITH THE
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION. THE OFFER IS MADE ONLY TO
THOSE PERSONS TO WHOM DISCLOSURE IS NOT REQUIRED UNDER DIVISION 2 PART 6D.2 OF
THE CORPORATIONS ACT 2001 AND DOES NOT PURPORT TO BE AN OFFER OF COMMON SHARES
FOR WHICH DISCLOSURE IS REQUIRED.

BAHAMAS. The offer is not open to the public. The offering of each common
share directly or indirectly in or from within The Bahamas may only be made by
an entity or person who is licensed as a Broker Dealer by the Securities
Commission of The Bahamas. Persons deemed "resident" of The Bahamas pursuant to
the Exchange Control Regulations, 1956 of The Bahamas must receive the prior
approval of The Central Bank of The Bahamas before accepting an offer to
purchase the common shares.

BRAZIL. The common shares may not be offered or sold to the public in
Brazil. Accordingly, the offering of the common shares has not been submitted to
the Brazilian Securities Commission (Comissao de Valores Mobiliarios -- CVM) for
approval. Documents relating to such offering, as well as the information
contained herein and therein may not be supplied to the public as a public
offering in Brazil or be used in connection with any offer for subscription or
sale to the public in Brazil.

BRITISH VIRGIN ISLANDS. THE FUND, THIS PROSPECTUS AND THE COMMON SHARES
OFFERED HEREIN HAVE NOT BEEN, AND WILL NOT BE, RECOGNIZED OR REGISTERED UNDER
THE LAWS AND REGULATIONS OF THE BRITISH VIRGIN ISLANDS. THE COMMON SHARES MAY
NOT BE OFFERED OR SOLD IN THE BRITISH VIRGIN ISLANDS EXCEPT IN CIRCUMSTANCES IN
WHICH THE FUND, THIS PROSPECTUS AND THE COMMON SHARES DO NOT REQUIRE RECOGNITION
BY OR REGISTRATION WITH THE AUTHORITIES OF THE BRITISH VIRGIN ISLANDS. THIS
PROSPECTUS IS NOT A SOLICITATION OF INDIVIDUALS SITUATED IN THE BRITISH VIRGIN
ISLANDS TO PURCHASE INTERESTS IN THE FUND.

CHILE. (1) Neither the Fund nor the common shares of the Fund have been
registered in the Republic of Chile under Law 18,045 of Securities Market
("Chilean Securities Act"), and no filing related to the Fund and/or the common
shares has been presented before the Chilean regulatory agency ("SVS").
Subsequently the common shares have not been offered or sold, and will not be
offered or sold to the public within Chile, except in circumstances which have
not resulted and will not result in a "public offering" as such term is defined
in Article 4 of the Chilean Securities Act.

(2) Wachovia Capital Markets, LLC is neither a bank nor a licensed broker in
Chile, and therefore has not and will not conduct transactions or any business
operations in any of such qualities, including the marketing, offer and sale of
the common shares, except in circumstances which have not resulted and will not
result in a "public offering" as such term is defined in Article 4 of the
Chilean Securities Act, and/or have not resulted and will not result in the
intermediation of securities in Chile within the meaning of Article 24 of the
Chilean Securities Act and/or the breach of the brokerage restrictions set forth
in Article 39 of Decree with Force of Law No. 3 of 1997.

(3) The common shares will be sold only to specific buyers, every one of
which will be deemed upon purchase:

(i) To be a financial institution and/or institutional investor or a
qualified investor with such knowledge and experience in financial and
business matters as to be capable of evaluating the risks and merits of an
investment in the common shares;

(ii) To agree that it will not resell the common shares in the
Republic of Chile in a transaction subject to the registration requirements
of the Chilean Securities Act, and that it will comply with all applicable
laws and regulations of the Republic of Chile or any other applicable
jurisdiction; and it will deliver to each person to whom the common shares
are transferred a notice substantially to the effect of this selling
restriction;

(iii) To acknowledge receipt of the sufficient information required to
make an informed decision whether or not to invest in the common shares;
and

(iv) To acknowledge that it has not relied upon advice from Wachovia
Capital Markets, LLC and/or the Fund of the common shares, or their
respective affiliates, regarding the determination of the convenience or
suitability of units as an investment for the buyer or any other person;
and has taken and relied upon independent legal, regulatory, tax and
accounting advice.

COLOMBIA. The common shares may not be offered or sold in the Republic of
Colombia.

COSTA RICA. The common shares described in this Prospectus have not been
registered with the Superintendencia General de Valores de Costa Rica, nor any
other regulatory body of Costa Rica. This prospectus is intended to be for your
personal use only, and is not intended to be a Public Offering of Securities, as
defined under Costa Rican law.

ISRAEL. NOTICE TO RESIDENTS OF ISRAEL

The Fund has undertaken that it will not offer common shares (1) to the
public in Israel within the meaning of Israel's Securities Law, 5728-1968; or
(2) to more than 35 offerees resident in Israel. The Fund will obtain
representations from each offeree that it is purchasing the common shares for
investment purposes only and not for the purpose of resale. Israeli purchasers
of common shares should consult their own legal and tax advisers with respect to
the tax consequences of an investment in the common shares in their particular
circumstances and with respect to the eligibility of the common shares for
investment by the purchaser under relevant Israeli legislation.

MEXICO. The common shares have not been and will not been registered with
the National Registry of Securities maintained by the National Banking and
Securities Commission and may not be publicly offered in Mexico, except pursuant
to a private placement exemption set forth under article 8 of the Securities
Market Law.

PANAMA. The common shares have not been registered with the National
Securities Commission, nor has the offer, sale or transactions thereof been
registered. The exemption from registration is made based on numeral 2 (in the
case of non-institutional investors) or numeral 3 (in the case of institutional
investors) of Article 83 of Decree Law 1 of July 8, 1999 (Institutional
Investors). Consequently, the tax treatment established in Articles 269 to 271
of Decree Law 1 of July 8, 1999, is not applicable thereto. The common shares
are not under the supervision of the National Securities Commission.

PARAGUAY. This is a private and personal offering. The common shares
offered have not been approved by or registered with the National Securities
Commission (Comision Nacional de Valores) and are not part of a public offering
as defined by the Paraguayan Securities Law. The information contained herein is
for informational and marketing purposes only and should not be taken as an
investment advice.

PERU. This offering of common shares is made only to institutional
investors (as defined by the Peruvian Securities Market Law) and not to the
public in general or a segment of it. Therefore, within 12 months from their
acquisition the common shares can only be transferred to other institutional
investors, unless they are previously recorded in the Public Registry of the
Securities Market.

SWITZERLAND. THE FUND HAS NOT BEEN AUTHORIZED BY THE SWISS FEDERAL BANKING
COMMISSION AS A FOREIGN INVESTMENT FUND UNDER ARTICLE 45 OF THE SWISS FEDERAL
LAW ON INVESTMENT FUNDS OF MARCH 18, 1994. NO STEPS HAVE BEEN TAKEN

TO REGISTER THE COMPANY OR THIS MEMORANDUM AS PROSPECTUS IN SWITZERLAND.
ACCORDINGLY, COMMON SHARES MAY NOT BE OFFERED OR DISTRIBUTED ON A PROFESSIONAL

BASIS IN OR FROM SWITZERLAND, UNLESS THE OFFER OR DISTRIBUTION IS EXCLUSIVELY
ADDRESSED TO SWISS INSTITUTIONAL INVESTORS, WITHOUT ANY PUBLIC OFFERING.

URUGUAY. This is a private offering. None of Wachovia Capital Markets, LLC,
the Fund or the common shares have been registered with the Central Bank of
Uruguay. The common shares offered hereunder do not qualify as investment funds
under Uruguayan law 16,774 of September 27, 1996.

VENEZUELA. The offering of this U.S. closed-end fund has not been and will
not be registered with the Venezuelan Comision Nacional de Valores and,
accordingly, the Fund (or its common shares) may not be offered or sold in any
manner that may be construed as a public offering under Venezuelan securities
laws.

CUSTODIAN, TRANSFER AGENT AND DIVIDEND DISBURSING AGENT

The Fund's securities and cash are held under a custodian agreement with The
Bank of New York, One Wall Street, New York, New York 10286. The transfer agent
and dividend disbursing agent for the Fund's shares is also The Bank of New
York.

LEGAL OPINIONS

Bell, Boyd & Lloyd LLP, Chicago, Illinois, serves as counsel to the Fund and
to the non-interested Trustees. Vedder, Price, Kaufman & Kammholz, P.C. ("Vedder
Price"), Chicago, Illinois,, which is serving as special counsel to the Fund in
connection with the offering, will pass on the legality of the shares offered
hereby. Vedder Price is also counsel to Calamos. Certain matters will be passed
upon for the underwriters by Simpson Thacher & Bartlett LLP, New York, New York.
Vedder Price and Simpson Thacher & Bartlett LLP may rely on matters of Delaware
law on the opinion of Morris, Nichols, Arsht & Tunnell, Wilmington, Delaware.

TABLE OF CONTENTS FOR STATEMENT OF ADDITIONAL INFORMATION

Use of Proceeds........................................................ S-1
Investment Restrictions................................................ S-23
Management of the Fund................................................. S-25
Portfolio Transactions................................................. S-36
Repurchase of Common Shares............................................ S-37
U.S. Federal Income Tax Matters........................................ S-39
Experts................................................................ S-44
Additional Information Concerning the Agreement and Declaration of
Trust................................................................ S-45
Additional Information................................................. S-45
Financial Statements................................................... F-1
Appendix A -- Description of Ratings................................... A-1

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56,000,000 SHARES

(CALAMOS INVESTMENTS LOGO)

CALAMOS GLOBAL DYNAMIC INCOME FUND
COMMON SHARES OF BENEFICIAL INTEREST
$15.00 per share

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

PROSPECTUS
June 26, 2007

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

WACHOVIA SECURITIES
CITI
ROBERT W. BAIRD & CO.
BB&T CAPITAL MARKETS
H&R BLOCK FINANCIAL ADVISORS, INC.
CROWELL, WEEDON & CO.
DOFT & CO., INC.
FERRIS, BAKER WATTS
INCORPORATED
JANNEY MONTGOMERY SCOTT LLC
MORGAN KEEGAN & COMPANY, INC.
RBC CAPITAL MARKETS
RYAN BECK & CO.
SOUTHWEST SECURITIES
STIFEL NICOLAUS
WEDBUSH MORGAN SECURITIES INC.
WELLS FARGO SECURITIES

SEC FILE NUMBER: 811-22047
333-142056

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

CALAMOS GLOBAL DYNAMIC INCOME FUND

STATEMENT OF ADDITIONAL INFORMATION

Calamos Global Dynamic Income Fund (the "Fund") is a newly organized,
diversified, closed-end management investment company. This Statement of
Additional Information relating to common shares does not constitute a
prospectus, but should be read in conjunction with the Prospectus relating
thereto dated June 26, 2007. This Statement of Additional Information does
not include all information that a prospective investor should consider before
purchasing common shares, and investors should obtain and read the Prospectus
prior to purchasing such shares. A copy of the Prospectus may be obtained
without charge by calling 1.800.582.6959. You may also obtain a copy of the
Prospectus on the Securities and Exchange Commission's web site
(http://www.sec.gov).

Use of Proceeds.......................................................... S-1
Investment Restrictions.................................................. S-23
Management of the Fund................................................... S-25
Portfolio Transactions................................................... S-36
Repurchase of Common Shares.............................................. S-37
U.S. Federal Income Tax Matters.......................................... S-39
Experts.................................................................. S-44
Additional Information Concerning the Agreement and
Declaration of Trust..................................................... S-45
Additional Information................................................... S-45
Financial Statements..................................................... F-1
Appendix A--Description of Ratings....................................... A-1

This Statement of Additional Information is dated June 26, 2007.

USE OF PROCEEDS

The Fund will invest the net proceeds of the offering in accordance with
the Fund's investment objective and policies as stated below and in the
Prospectus. It is presently anticipated that the Fund will invest substantially
all of the net proceeds in securities that meet the investment objective and
policies within three months after completion of the offering. Pending such
investment, the net proceeds may be invested in U.S. government securities and
high grade, short-term money market instruments. If necessary, the Fund may also
purchase, as temporary investments, securities of other open- or closed-end
investment companies that invest primarily in the types of securities in which
the Fund may invest directly.

INVESTMENT OBJECTIVE AND POLICIES

The Prospectus presents the investment objective and the principal
investment strategies and risks of the Fund. This section supplements the
disclosure in the Fund's Prospectus and provides additional information on the
Fund's investment policies or restrictions. Restrictions or policies stated as a
maximum percentage of the Fund's assets are only applied immediately after a
portfolio investment to which the policy or restriction is applicable (other
than the limitations on borrowing). Accordingly, any later increase or decrease
resulting from a change in values, net assets or other circumstances will not be
considered in determining whether the investment complies with the Fund's
restrictions and policies.

PRIMARY INVESTMENTS. Under normal circumstances, the Fund will invest
primarily in a globally diversified portfolio of convertible instruments, common
and preferred stocks, and income-producing securities such as investment grade
and below investment grade (high yield/high risk) debt securities. The Fund may
also incorporate other income-producing strategies. The Fund, under normal
circumstances, will invest at least 40% of its managed assets in securities of
foreign issuers, including debt and equity securities of corporate issuers and
debt securities of government issuers, in developed and emerging markets. The
Fund will maintain a balanced approach to geographic portfolio diversification.
"Managed assets" means the total assets of the Fund (including any assets
attributable to any leverage that may be outstanding) minus the sum of accrued
liabilities (other than debt representing financial leverage). For this purpose
the liquidation preference on any preferred shares will not constitute a
liability.

FOREIGN SECURITIES. The Fund may invest up to 100% of its managed assets in
securities of foreign issuers, including debt and equity securities of corporate
issuers and debt securities of government issuers, in developed and emerging
markets. The Fund will invest in the securities of issuers located in at least
three markets, which may include the United States. A significant portion of the
Fund's assets will be invested in foreign securities. A foreign issuer is a
foreign government or company organized under the laws of a foreign country.

Investors should understand and consider carefully the risks involved in
foreign investing. Investing in foreign securities, which are generally
denominated in foreign currencies, and utilization of forward foreign currency
exchange contracts involve certain considerations comprising both risks and
opportunities not typically associated with investing in U.S. securities. These
considerations include: fluctuations in exchange rates of foreign currencies;
possible imposition of exchange control regulation or currency restrictions that
would prevent cash from being brought back to the United States; less public
information with respect to issuers of securities; less governmental supervision
of stock exchanges, securities brokers, and issuers of securities; lack of
uniform accounting, auditing and financial reporting standards; lack of uniform
settlement periods and trading practices; less liquidity and frequently greater
price volatility in foreign markets than in the United States; possible
imposition of foreign taxes; and sometimes less advantageous legal, operational
and financial protections applicable to foreign sub-custodial arrangements.

S-1

Although the Fund intends to invest in companies and government securities
of countries having stable political environments, there is the possibility of
expropriation or confiscatory taxation, seizure or nationalization of foreign
bank deposits or other assets, establishment of exchange controls, the adoption
of foreign government restrictions, or other adverse political, social or
diplomatic developments that could affect investment in these nations.

The Fund may invest in the securities of issuers located in emerging market
countries. The securities markets of emerging countries are substantially
smaller, less developed, less liquid and more volatile than the securities
markets of the U.S. and other more developed countries. Disclosure and
regulatory standards in many respects are less stringent than in the U.S. and
other major markets. There also may be a lower level of monitoring and
regulation of emerging markets and the activities of investors in such markets,
and enforcement of existing regulations has been extremely limited. Economies in
individual emerging markets may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rates of
inflation, currency depreciation, capital reinvestment, resource
self-sufficiency and balance of payments positions. Many emerging market
countries have experienced high rates of inflation for many years, which has had
and may continue to have very negative effects on the economies and securities
markets of those countries.

CURRENCY EXCHANGE TRANSACTIONS. Currency exchange transactions may be
conducted either on a spot (i.e., cash) basis at the spot rate for purchasing or
selling currency prevailing in the foreign exchange market or through forward
currency exchange contracts ("forward contracts"). Forward contracts are
contractual agreements to purchase or sell a specified currency at a specified
future date (or within a specified time period) and price set at the time of the
contract. Forward contracts are usually entered into with banks, foreign
exchange dealers and broker-dealers, are not exchange traded, and are usually
for less than one year, but may be renewed.

Forward currency exchange transactions may involve currencies of the
different countries in which the Fund may invest and serve as hedges against
possible variations in the exchange rate between these currencies and the U.S.
dollar. Currency exchange transactions are limited to transaction hedging and
portfolio hedging involving either specific transactions or portfolio positions,
except to the extent described below under "Synthetic Foreign Money Market
Positions." Transaction hedging is the purchase or sale of forward contracts
with respect to specific receivables or payables of the Fund accruing in
connection with the purchase and sale of its portfolio securities or the receipt
of dividends or interest thereon. Portfolio hedging is the use of forward
contracts with respect to portfolio security positions denominated or quoted in
a particular foreign currency. Portfolio hedging allows the Fund to limit or
reduce its exposure in a foreign currency by entering into a forward contract to
sell such foreign currency (or another foreign currency that acts as a proxy for
that currency) at a future date for a price payable in U.S. dollars so that the
value of the foreign denominated portfolio securities can be approximately
matched by a foreign denominated liability. The Fund may not engage in portfolio
hedging with respect to the currency of a particular country to an extent
greater than the aggregate market value (at the time of making such sale) of the
securities held in its portfolio denominated or quoted in that particular
currency, except that the Fund may hedge all or part of its foreign currency
exposure through the use of a basket of currencies or a proxy currency where
such currencies or currency act as an effective proxy for other currencies. In
such a case, the Fund may enter into a forward contract where the amount of the
foreign currency to be sold exceeds the value of the securities denominated in
such currency. The use of this basket hedging technique may be more efficient
and economical than entering into separate forward contracts for each currency
held in the Fund. The Fund may not engage in "speculative" currency exchange
transactions.

If the Fund enters into a forward contract, the Fund's custodian will
segregate liquid assets of the Fund having a value equal to the Fund's
commitment under such forward contract. At the maturity of the

S-2

forward contract to deliver a particular currency, the Fund may either sell the
portfolio security related to the contract and make delivery of the currency, or
it may retain the security and either acquire the currency on the spot market or
terminate its contractual obligation to deliver the currency by purchasing an
offsetting contract with the same currency trader obligating it to purchase on
the same maturity date the same amount of the currency. It is impossible to
forecast with absolute precision the market value of portfolio securities at the
expiration of a forward contract. Accordingly, it may be necessary for a Fund to
purchase additional currency on the spot market (and bear the expense of such
purchase) if the market value of the security is less than the amount of
currency the Fund is obligated to deliver and if a decision is made to sell the
security and make delivery of the currency. Conversely, it may be necessary to
sell on the spot market some of the currency received upon the sale of the
portfolio security if its market value exceeds the amount of currency the Fund
is obligated to deliver.

If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. If the Fund engages in an offsetting
transaction, it may subsequently enter into a new forward contract to sell the
currency. Should forward prices decline during the period between the Fund's
entering into a forward contract for the sale of a currency and the date it
enters into an offsetting contract for the purchase of the currency, the Fund
will realize a gain to the extent the price of the currency it has agreed to
sell exceeds the price of the currency it has agreed to purchase. Should forward
prices increase, the Fund will suffer a loss to the extent the price of the
currency it has agreed to purchase exceeds the price of the currency it has
agreed to sell. A default on the contract would deprive the Fund of unrealized
profits or force the Fund to cover its commitments for purchase or sale of
currency, if any, at the current market price.

Hedging against a decline in the value of a currency does not eliminate
fluctuations in the value of a portfolio security traded in that currency or
prevent a loss if the value of the security declines. Hedging transactions also
preclude the opportunity for gain if the value of the hedged currency should
rise. Moreover, it may not be possible for a Fund to hedge against a devaluation
that is so generally anticipated that the Fund is not able to contract to sell
the currency at a price above the devaluation level it anticipates. The cost to
the Fund of engaging in currency exchange transactions varies with such factors
as the currency involved, the length of the contract period, and prevailing
market conditions.

OPTIONS ON SECURITIES, INDEXES AND CURRENCIES. The Fund may purchase and
sell put options and call options on securities, indexes or foreign currencies.
The Fund may purchase agreements, sometimes called cash puts, that may accompany
the purchase of a new issue of bonds from a dealer.

A put option gives the purchaser of the option, upon payment of a premium,
the right to sell, and the writer the obligation to buy, the underlying
security, commodity, index, currency or other instrument at the exercise price.
For instance, the Fund's purchase of a put option on a security might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market value
by giving the Fund the right to sell such instrument at the option exercise
price. A call option, upon payment of a premium, gives the purchaser of the
option the right to buy, and the seller the obligation to sell, the underlying
instrument at the exercise price. The Fund's purchase of a call option on a
security, financial future, index, currency or other instrument might be
intended to protect a fund against an increase in the price of the underlying
instrument that it intends to purchase in the future by fixing the price at
which it may purchase such instrument.

The Fund is authorized to purchase and sell exchange listed options and
over-the-counter options ("OTC options"). Exchange listed options are issued by
a regulated intermediary such as the Options Clearing Corporation ("OCC"), which
guarantees the performance of the obligations of the parties to such options.
The discussion below uses the OCC as an example, but is also applicable to other
financial intermediaries.

S-3

With certain exceptions, OCC issued and exchange listed options generally
settle by physical delivery of the underlying security or currency, although in
the future cash settlement may become available. Index options and Eurodollar
instruments are cash settled for the net amount, if any, by which the option is
"in-the-money" (i.e., where the value of the underlying instrument exceeds, in
the case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.

OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties. The
Fund may sell OTC options (other than OTC currency options) that are subject to
a buy-back provision permitting the Fund to require the Counterparty to sell the
option back to a fund at a formula price within seven days. The Fund expects
generally to enter into OTC options that have cash settlement provisions,
although it is not required to do so. The staff of the Commission currently
takes the position that OTC options purchased by a fund, and portfolio
securities "covering" the amount of a fund's obligation pursuant to an OTC
option sold by it (or the amount of assets equal to the formula price for the
repurchase of the option, if any, less the amount by which the option is in the
money) are illiquid.

The Fund may also purchase and sell options on securities indices and other
financial indices. Options on securities indices and other financial indices are
similar to options on a security or other instrument except that, rather than
settling by physical delivery of the underlying instrument, they settle by cash
settlement, i.e., an option or an index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the index
upon which the option is based exceeds, in the case of a call, or is less than,
in the case of a put, the exercise price of the option (except if, in the case
of an OTC option, physical delivery is specified). This amount of cash is equal
to the excess of the closing price of the index over the exercise price of the
option, which also may be multiplied by a formula value. The seller of the
option is obligated, in return for the premium received, to make delivery of
this amount. The gain or loss on an option on an index depends on price
movements in the instruments making upon the market, market segment, industry or
other composite on which the underlying index is based, rather than price
movements in individual securities, as is the case with respect to options on
securities.

The Fund will write call options and put options only if they are
"covered." For example, a call option written by the Fund will require the Fund
to hold the securities subject to the call (or securities convertible into the
needed securities without additional consideration) or to segregate cash or
liquid assets sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by the Fund on an index will require the Fund to
own portfolio securities which correlate with the index or to segregate cash or
liquid assets equal to the excess of the index value over the exercise price on
a current basis. A put option written by the Fund requires the Fund to segregate
cash or liquid assets equal to the exercise price.

OTC options entered into by the Fund and OCC issued and exchange listed
index options will generally provide for cash settlement. As a result, when the
Fund sells these instruments it will only segregate an amount of cash or liquid
assets equal to its accrued net obligations, as there is no requirement for
payment or delivery of amounts in excess of the net amount. These amounts will
equal 100% of the exercise price in the case of a non cash-settled put, the same
as an OCC guaranteed listed option sold by the Fund, or the in-the-money amount
plus any sell-back formula amount in the case of a cash-settled put or call. In
addition, when the Fund sells a call option on an index at a time when the
in-

S-4

the-money amount exceeds the exercise price, the Fund will segregate, until the
option expires or is closed out, cash or cash equivalents equal in value to such
excess. OCC issued and exchange listed options sold by the Fund other than those
above generally settle with physical delivery, or with an election of either
physical delivery or cash settlement, and the Fund will segregate an amount of
cash or liquid assets equal to the full value of the option. OTC options
settling with physical delivery, or with an election of either physical delivery
or cash settlement, will be treated the same as other options settling with
physical delivery.

If an option written by the Fund expires, the Fund realizes a capital gain
equal to the premium received. If an option purchased by the Fund expires, the
Fund realizes a capital loss equal to the premium paid.

The Fund will realize a capital gain from a closing purchase transaction if
the cost of the closing option is less than the premium received from writing
the option, or, if it is more, the Fund will realize a capital loss. If the
premium received from a closing sale transaction is more than the premium paid
to purchase the option, the Fund will realize a capital gain or, if it is less,
the Fund will realize a capital loss. The principal factors affecting the market
value of a put or a call option include supply and demand, interest rates, the
current market price of the underlying security or index in relation to the
exercise price of the option, the volatility of the underlying security or
index, and the time remaining until the expiration date.

A put or call option purchased by the Fund is an asset of the Fund, valued
initially at the premium paid for the option. The premium received for an option
written by the Fund is recorded as a deferred credit. The value of an option
purchased or written is marked-to-market daily and is valued at the closing
price on the exchange on which it is traded or, if not traded on an exchange or
no closing price is available, at the mean between the last bid and asked
prices.

RISKS ASSOCIATED WITH OPTIONS. There are several risks associated with
transactions in options. For example, there are significant differences between
the securities markets, the currency markets and the options markets that could
result in an imperfect correlation among these markets, causing a given
transaction not to achieve its objectives. A decision as to whether, when and
how to use options involves the exercise of skill and judgment, and even a
well-conceived transaction may be unsuccessful to some degree because of market
behavior or unexpected events. The ability of the Fund to utilize options
successfully will depend on the ability of the Fund's investment adviser,
Calamos Advisors LLC ("Calamos"), to predict pertinent market investments, which
cannot be assured. As the Fund writes covered calls over more of its portfolio,
its ability to benefit from capital appreciation becomes more limited and the
risk of net asset value erosion increases. If the Fund experiences net asset
value erosion, which itself may have an indirect negative effect on the market
price of the Fund's shares, the Fund will have a reduced asset base over which
to write covered calls, which may eventually lead to reduced distributions to
shareholders.

The Fund's ability to close out its position as a purchaser or seller of an
OCC or exchange listed put or call option is dependent, in part, upon the
liquidity of the option market. Among the possible reasons for the absence of a
liquid option market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities including
reaching daily price limits; (iv) interruption of the normal operations of the
OCC or an exchange; (v) inadequacy of the facilities of an exchange or OCC to
handle current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms. If the Fund were unable to
close out an option that it has purchased on a security, it would have to
exercise the option in order to realize any profit or the option would expire
and become worthless. If the Fund were unable to close out a covered call option
that it had written on a security, it would not be able to sell the underlying
security until the option expired. As the writer of a covered call option on a
security, the Fund foregoes, during the option's life, the opportunity to profit

S-5

from increases in the market value of the security covering the call option
above the sum of the premium and the exercise price of the call. As the writer
of a covered call option on a foreign currency, the Fund foregoes, during the
option's life, the opportunity to profit from currency appreciation.

The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.

Unless the parties provide for it, there is no central clearing or guaranty
function in an OTC option. As a result, if the Counterparty (as described above
under "Options on Securities, Indexes and Currencies") fails to make or take
delivery of the security, currency or other instrument underlying an OTC option
it has entered into with the Fund or fails to make a cash settlement payment due
in accordance with the terms of that option, the Fund will lose any premium it
paid for the option as well as any anticipated benefit of the transaction.
Accordingly, Calamos must assess the creditworthiness of each such Counterparty
or any guarantor or credit enhancement of the Counterparty's credit to determine
the likelihood that the terms of the OTC option will be satisfied. The Fund will
engage in OTC option transactions only with U.S. government securities dealers
recognized by the Federal Reserve Bank of New York as "primary dealers" or
broker/dealers, domestic or foreign banks or other financial institutions which
have received (or the guarantors of the obligation of which have received) a
short-term credit rating of A-1 from S&P or P-1 from Moody's or an equivalent
rating from any nationally recognized statistical rating organization ("NRSRO")
or, in the case of OTC currency transactions, are determined to be of equivalent
credit quality by Calamos.

The Fund may purchase and sell call options on securities indices and
currencies. All calls sold by the Fund must be "covered." Even though the Fund
will receive the option premium to help protect it against loss, a call sold by
the Fund exposes the Fund during the term of the option to possible loss of
opportunity to realize appreciation in the market price of the underlying
security or instrument and may require the Fund to hold a security or instrument
which it might otherwise have sold. The Fund may purchase and sell put options
on securities indices and currencies. In selling put options, there is a risk
that the Fund may be required to buy the underlying security at a
disadvantageous price above the market price.

EQUITY SECURITIES. Equity securities include common and preferred stocks,
warrants, rights, and depository receipts. An investment in the equity
securities of a company represents a proportionate ownership interest in that
company. Therefore, the Fund participates in the financial success or failure of
any company in which it has an equity interest. Equity investments are subject
to greater fluctuations in market value than other asset classes as a result of
such factors as a company's business performance, investor perceptions, stock
market trends and general economic conditions. Equity securities are
subordinated to bonds and other debt instruments in a company's capital
structure in terms of priority to corporate income and liquidation payments.

Preferred stocks involve credit risk, which is the risk that a preferred
stock in the Fund's portfolio will decline in price or fail to make dividend
payments when due because the issuer of the security experiences a decline in
its financial status. In addition to credit risk, investments in preferred
stocks involve certain other risks. Certain preferred stocks contain provisions
that allow an issuer under certain circumstances to skip distributions (in the
case of "non-cumulative" preferred stocks) or defer distributions (in the case
of "cumulative" preferred stocks). If the Fund owns a preferred stock that is
deferring its distributions, the Fund may be required to report income for
federal income tax purposes while it is not receiving income from that stock. In
certain varying circumstances, an issuer may redeem its preferred stock prior to
a specified date in the event of certain tax or legal changes or at the issuer's
call. In the

S-6

event of a redemption, the Fund may not be able to reinvest the proceeds at
comparable rates of return. Preferred stocks typically do not provide any voting
rights, except in cases when dividends are in arrears for a specified number of
periods.

Equity securities of small and medium-sized companies historically have
been subject to greater investment risk than those of large companies. The risks
generally associated with small and medium-sized companies include more limited
product lines, markets and financial resources, lack of management depth or
experience, dependency on key personnel and vulnerability to adverse market and
economic developments. Accordingly, the prices of small and medium-sized company
equity securities tend to be more volatile than prices of large company stocks.
Further, the prices of small and medium-sized company equity securities are
often adversely affected by limited trading volumes and the lack of publicly
available information.

HIGH YIELD SECURITIES. The high yield securities in which the Fund may
invest are rated Ba or lower by Moody's or BB or lower by Standard & Poor's or
are unrated but determined by Calamos to be of comparable quality.
Non-convertible debt securities rated below investment grade are commonly
referred to as "junk bonds" and are considered speculative with respect to the
issuer's capacity to pay interest and repay principal.

Below investment grade non-convertible debt securities or comparable
unrated securities are commonly referred to as "junk bonds" and are considered
predominantly speculative with respect to the issuer's ability to pay interest
and principal and are susceptible to default or decline in market value due to
adverse economic and business developments. The market values for high yield
securities tend to be very volatile, and these securities are less liquid than
investment grade debt securities. For these reasons, your investment in the Fund
is subject to the following specific risks:

- increased price sensitivity to changing interest rates and to a
deteriorating economic environment;

- greater risk of loss due to default or declining credit quality;

- adverse company specific events are more likely to render the issuer
unable to make interest and/or principal payments; and

- if a negative perception of the high yield market develops, the price
and liquidity of high yield securities may be depressed. This negative
perception could last for a significant period of time.

Securities rated below investment grade are speculative with respect to the
capacity to pay interest and repay principal in accordance with the terms of
such securities. A rating of C from Moody's means that the issue so rated can be
regarded as having extremely poor prospects of ever attaining any real
investment standing. Standard & Poor's assigns a rating of C to issues that are
currently highly vulnerable to nonpayment, and the C rating may be used to cover
a situation where a bankruptcy petition has been filed or similar action taken,
but payments on the obligation are being continued (a C rating is also assigned
to a preferred stock issue in arrears on dividends or sinking fund payments, but
that is currently paying). See Appendix A to this Statement of Additional
Information for a description of Moody's and Standard & Poor's ratings.

Adverse changes in economic conditions are more likely to lead to a
weakened capacity of a high yield issuer to make principal payments and interest
payments than an investment grade issuer. The principal amount of high yield
securities outstanding has proliferated in the past decade as an increasing
number of issuers have used high yield securities for corporate financing. An
economic downturn could

S-7

severely affect the ability of highly leveraged issuers to service their debt
obligations or to repay their obligations upon maturity. Similarly, downturns in
profitability in specific industries could adversely affect the ability of high
yield issuers in that industry to meet their obligations. The market values of
lower quality debt securities tend to reflect individual developments of the
issuer to a greater extent than do higher quality securities, which react
primarily to fluctuations in the general level of interest rates. Factors having
an adverse impact on the market value of lower quality securities may have an
adverse effect on the Fund's net asset value and the market value of its common
shares. In addition, the Fund may incur additional expenses to the extent it is
required to seek recovery upon a default in payment of principal or interest on
its portfolio holdings. In certain circumstances, the Fund may be required to
foreclose on an issuer's assets and take possession of its property or
operations. In such circumstances, the Fund would incur additional costs in
disposing of such assets and potential liabilities from operating any business
acquired.

The secondary market for high yield securities may not be as liquid as the
secondary market for more highly rated securities, a factor which may have an
adverse effect on the Fund's ability to dispose of a particular security when
necessary to meet its liquidity needs. There are fewer dealers in the market for
high yield securities than investment grade obligations. The prices quoted by
different dealers may vary significantly and the spread between the bid and
asked price is generally much larger than higher quality instruments. Under
adverse market or economic conditions, the secondary market for high yield
securities could contract further, independent of any specific adverse changes
in the condition of a particular issuer, and these instruments may become
illiquid. As a result, the Fund could find it more difficult to sell these
securities or may be able to sell the securities only at prices lower than if
such securities were widely traded. Prices realized upon the sale of such lower
rated or unrated securities, under these circumstances, may be less than the
prices used in calculating the Fund's net asset value.

Because investors generally perceive that there are greater risks
associated with lower quality debt securities of the type in which the Fund may
invest a portion of its assets, the yields and prices of such securities may
tend to fluctuate more than those for higher rated securities. In the lower
quality segments of the debt securities market, changes in perceptions of
issuers' creditworthiness tend to occur more frequently and in a more pronounced
manner than do changes in higher quality segments of the debt securities market,
resulting in greater yield and price volatility.

If the Fund invests in high yield securities that are rated C or below, the
Fund will incur significant risk in addition to the risks associated with
investments in high yield securities and corporate loans. Distressed securities
frequently do not produce income while they are outstanding. The Fund may
purchase distressed securities that are in default or the issuers of which are
in bankruptcy. The Fund may be required to bear certain extraordinary expenses
in order to protect and recover its investment.

DISTRESSED SECURITIES. The Fund may, but currently does not intend to,
invest up to 5% of its total assets in distressed securities, including
corporate loans, which are the subject of bankruptcy proceedings or otherwise in
default as to the repayment of principal and/or payment of interest at the time
of acquisition by the Fund or are rated in the lower rating categories (Ca or
lower by Moody's or CC or lower by Standard & Poor's) or which are unrated
investments considered by Calamos to be of comparable quality. Investment in
distressed securities is speculative and involves significant risk. Distressed
securities frequently do not produce income while they are outstanding and may
require the Fund to bear certain extraordinary expenses in order to protect and
recover its investment. Therefore, to the extent the Fund seeks capital
appreciation through investment in distressed securities, the Fund's ability to
achieve current income for its shareholders may be diminished. The Fund also
will be subject to significant uncertainty as to when and in what manner and for
what value the obligations evidenced by the distressed securities will
eventually be satisfied (e.g., through a liquidation of the obligor's assets, an
exchange offer or plan of reorganization involving the distressed securities or
a payment of some amount

S-8

in satisfaction of the obligation). In addition, even if an exchange offer is
made or a plan of reorganization is adopted with respect to distressed
securities held by the Fund, there can be no assurance that the securities or
other assets received by the Fund in connection with such exchange offer or plan
of reorganization will not have a lower value or income potential than may have
been anticipated when the investment was made. Moreover, any securities received
by the Fund upon completion of an exchange offer or plan of reorganization may
be restricted as to resale. As a result of the Fund's participation in
negotiations with respect to any exchange offer or plan of reorganization with
respect to an issuer of distressed securities, the Fund may be restricted from
disposing of such securities.

LOANS. The Fund may invest up to 5% of its total assets in loan
participations and other direct claims against a borrower. The corporate loans
in which the Fund may invest primarily consist of direct obligations of a
borrower and may include debtor in possession financings pursuant to Chapter 11
of the U.S. Bankruptcy Code, obligations of a borrower issued in connection with
a restructuring pursuant to Chapter 11 of the U.S. Bankruptcy Code, leveraged
buy-out loans, leveraged recapitalization loans, receivables purchase
facilities, and privately placed notes. The Fund may invest in a corporate loan
at origination as a co-lender or by acquiring in the secondary market
participations in, assignments of or novations of a corporate loan. By
purchasing a participation, the Fund acquires some or all of the interest of a
bank or other lending institution in a loan to a corporate or government
borrower. The participations typically will result in the Fund having a
contractual relationship only with the lender not the borrower. The Fund will
have the right to receive payments of principal, interest and any fees to which
it is entitled only from the lender selling the participation and only upon
receipt by the lender of the payments from the borrower. Many such loans are
secured, although some may be unsecured. Such loans may be in default at the
time of purchase. Loans that are fully secured offer the Fund more protection
than an unsecured loan in the event of non-payment of scheduled interest or
principal. However, there is no assurance that the liquidation of collateral
from a secured loan would satisfy the corporate borrower's obligation, or that
the collateral can be liquidated. Direct debt instruments may involve a risk of
loss in case of default or insolvency of the borrower and may offer less legal
protection to the Fund in the event of fraud or misrepresentation. In addition,
loan participations involve a risk of insolvency of the lending bank or other
financial intermediary. The markets in loans are not regulated by federal
securities laws or the Securities and Exchange Commission (the "Commission").

As in the case of other high yield investments, such corporate loans may be
rated in the lower rating categories of the established rating services (Ba or
lower by Moody's or BB or lower by Standard & Poor's), or may be unrated
investments considered by Calamos to be of comparable quality. As in the case of
other high yield investments, such corporate loans can be expected to provide
higher yields than lower yielding, higher rated fixed income securities, but may
be subject to greater risk of loss of principal and income. There are, however,
some significant differences between corporate loans and high yield bonds.
Corporate loan obligations are frequently secured by pledges of liens and
security interests in the assets of the borrower, and the holders of corporate
loans are frequently the beneficiaries of debt service subordination provisions
imposed on the borrower's bondholders. These arrangements are designed to give
corporate loan investors preferential treatment over high yield investors in the
event of a deterioration in the credit quality of the issuer. Even when these
arrangements exist, however, there can be no assurance that the borrowers of the
corporate loans will repay principal and/or pay interest in full. Corporate
loans generally bear interest at rates set at a margin above a generally
recognized base lending rate that may fluctuate on a day-to-day basis, in the
case of the prime rate of a U.S. bank, or which may be adjusted on set dates,
typically 30 days but generally not more than one year, in the case of the
London Interbank Offered Rate. Consequently, the value of corporate loans held
by the Fund may be expected to fluctuate significantly less than the value of
other fixed rate high yield instruments as a result of changes in the interest
rate environment. On the other hand, the secondary dealer market for certain
corporate loans may not be as well developed as the secondary dealer market for
high yield bonds, and therefore presents increased market risk relating to
liquidity and pricing concerns.

S-9

SYNTHETIC FOREIGN MONEY MARKET POSITIONS. The Fund may invest in money
market instruments denominated in foreign currencies. In addition to, or in lieu
of, such direct investment, the Fund may construct a synthetic foreign money
market position by (a) purchasing a money market instrument denominated in one
currency, generally U.S. dollars, and (b) concurrently entering into a forward
contract to deliver a corresponding amount of that currency in exchange for a
different currency on a future date and at a specified rate of exchange. For
example, a synthetic money market position in Japanese yen could be constructed
by purchasing a U.S. dollar money market instrument, and entering concurrently
into a forward contract to deliver a corresponding amount of U.S. dollars in
exchange for Japanese yen on a specified date and at a specified rate of
exchange. Because of the availability of a variety of highly liquid short-term
U.S. dollar money market instruments, a synthetic money market position
utilizing such U.S. dollar instruments may offer greater liquidity than direct
investment in foreign currency and a concurrent construction of a synthetic
position in such foreign currency, in terms of both income yield and gain or
loss from changes in currency exchange rates, in general should be similar, but
would not be identical because the components of the alternative investments
would not be identical.

DEBT OBLIGATIONS OF NON-U.S. GOVERNMENTS. An investment in debt obligations
of non-U.S. governments and their political subdivisions (sovereign debt)
involves special risks that are not present in corporate debt obligations. The
non-U.S. issuer of the sovereign debt or the non-U.S. governmental authorities
that control the repayment of the debt may be unable or unwilling to repay
principal or interest when due, and the Fund may have limited recourse in the
event of a default. During periods of economic uncertainty, the market prices of
sovereign debt may be more volatile than prices of debt obligations of U.S.
issuers. In the past, certain non-U.S. countries have encountered difficulties
in servicing their debt obligations, withheld payments of principal and interest
and declared moratoria on the payment of principal and interest on their
sovereign debt.

A sovereign debtor's willingness or ability to repay principal and pay
interest in a timely manner may be affected by, among other factors, its cash
flow situation, the extent of its foreign currency reserves, the availability of
sufficient non-U.S. currency, the relative size of the debt service burden, the
sovereign debtor's policy toward its principal international lenders and local
political constraints.

Sovereign debtors may also be dependent on expected disbursements from
non-U.S. governments, multilateral agencies and other entities to reduce
principal and interest arrearages on their debt. The failure of a sovereign
debtor to implement economic reforms, achieve specified levels of economic
performance or repay principal or interest when due may result in the
cancellation of third-party commitments to lend funds to the sovereign debtor,
which may further impair such debtor's ability or willingness to service its
debts.

EURODOLLAR INSTRUMENTS AND SAMURAI AND YANKEE BONDS. The Fund may invest in
Eurodollar instruments and Samurai and Yankee bonds. Eurodollar instruments are
bonds of corporate and government issuers that pay interest and principal in
U.S. dollars but are issued in markets outside the United States, primarily in
Europe. Samurai bonds are yen-denominated bonds sold in Japan by non-Japanese
issuers. Yankee bonds are U.S. dollar-denominated bonds typically issued in the
U.S. by non-U.S. governments and their agencies and non-U.S. banks and
corporations. The Fund may also invest in Eurodollar Certificates of Deposit
("ECDs"), Eurodollar Time Deposits ("ETDs") and Yankee Certificates of Deposit
("Yankee CDs"). ECDs are U.S. dollar-denominated certificates of deposit issued
by non-U.S. branches of domestic banks; ETDs are U.S. dollar-denominated
deposits in a non-U.S. branch of a U.S. bank or in a non-U.S. bank; and Yankee
CDs are U.S. dollar-denominated certificates of deposit issued by a U.S. branch
of a non-U.S. bank and held in the U.S. These investments involve risks that are
different from investments in securities issued by U.S. issuers, including
potential unfavorable political and economic developments, non-U.S. withholding
or other taxes, seizure of non-U.S. deposits,

S-10

currency controls, interest limitations or other governmental restrictions which
might affect payment of principal or interest.

CONVERTIBLE SECURITIES. Convertible securities include any corporate debt
security or preferred stock that may be converted into underlying shares of
common stock. The common stock underlying convertible securities may be issued
by a different entity than the issuer of the convertible securities. Convertible
securities entitle the holder to receive interest payments paid on corporate
debt securities or the dividend preference on a preferred stock until such time
as the convertible security matures or is redeemed or until the holder elects to
exercise the conversion privilege. As a result of the conversion feature,
however, the interest rate or dividend preference on a convertible security is
generally less than would be the case if the securities were issued in
non-convertible form.

The value of convertible securities is influenced by both the yield of
non-convertible securities of comparable issuers and by the value of the
underlying common stock. The value of a convertible security viewed without
regard to its conversion feature (i.e., strictly on the basis of its yield) is
sometimes referred to as its "investment value." The investment value of the
convertible security typically will fluctuate inversely with changes in
prevailing interest rates. However, at the same time, the convertible security
will be influenced by its "conversion value," which is the market value of the
underlying common stock that would be obtained if the convertible security were
converted. Conversion value fluctuates directly with the price of the underlying
common stock.

If, because of a low price of the common stock, the conversion value is
substantially below the investment value of the convertible security, the price
of the convertible security is governed principally by its investment value. If
the conversion value of a convertible security increases to a point that
approximates or exceeds its investment value, the value of the security will be
principally influenced by its conversion value. A convertible security will sell
at a premium over its conversion value to the extent investors place value on
the right to acquire the underlying common stock while holding a fixed income
security. Holders of convertible securities have a claim on the assets of the
issuer prior to the common stockholders, but may be subordinated to holders of
similar non-convertible securities of the same issuer.

SYNTHETIC CONVERTIBLE SECURITIES. Calamos may create a "synthetic"
convertible security by combining fixed income securities with the right to
acquire equity securities. More flexibility is possible in the assembly of a
synthetic convertible security than in the purchase of a convertible security.
Although synthetic convertible securities may be selected where the two
components are issued by a single issuer, thus making the synthetic convertible
security similar to the true convertible security, the character of a synthetic
convertible security allows the combination of components representing distinct
issuers, when Calamos believes that such a combination would better promote the
Fund's investment objective. A synthetic convertible security also is a more
flexible investment in that its two components may be purchased separately. For
example, the Fund may purchase a warrant for inclusion in a synthetic
convertible security but temporarily hold short-term investments while
postponing the purchase of a corresponding bond pending development of more
favorable market conditions.

A holder of a synthetic convertible security faces the risk of a decline in
the price of the security or the level of the index involved in the convertible
component, causing a decline in the value of the call option or warrant
purchased to create the synthetic convertible security. Should the price of the
stock fall below the exercise price and remain there throughout the exercise
period, the entire amount paid for the call option or warrant would be lost.
Because a synthetic convertible security includes the fixed-income component as
well, the holder of a synthetic convertible security also faces the risk that
interest rates will rise, causing a decline in the value of the fixed-income
instrument.

The Fund may also purchase synthetic convertible securities manufactured by
other parties, including convertible structured notes. Convertible structured
notes are fixed income debentures linked to

S-11

equity, and are typically issued by investment banks. Convertible structured
notes have the attributes of a convertible security, however, the investment
bank that issued the convertible note assumes the credit risk associated with
the investment, rather than the issuer of the underlying common stock into which
the note is convertible.

LENDING OF PORTFOLIO SECURITIES. The Fund may lend its portfolio securities
to broker-dealers and banks. Any such loan must be continuously secured by
collateral in cash or cash equivalents maintained on a current basis in an
amount at least equal to the market value of the securities loaned by the Fund.
The Fund would continue to receive the equivalent of the interest or dividends
paid by the issuer on the securities loaned, and would also receive an
additional return that may be in the form of a fixed fee or a percentage of the
collateral. The Fund may pay reasonable fees to persons unaffiliated with the
Fund for services in arranging these loans. The Fund would have the right to
call the loan and obtain the securities loaned at any time on notice of not more
than five business days. The Fund would not have the right to vote the
securities during the existence of the loan but would call the loan to permit
voting of the securities, if, in Calamos' judgment, a material event requiring a
shareholder vote would otherwise occur before the loan was repaid. In the event
of bankruptcy or other default of the borrower, the Fund could experience both
delays in liquidating the loan collateral or recovering the loaned securities
and losses, including (a) possible decline in the value of the collateral or in
the value of the securities loaned during the period while the Fund seeks to
enforce its rights thereto, (b) possible subnormal levels of income and lack of
access to income during this period, and (c) expenses of enforcing its rights.

FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS. The Fund may use
interest rate futures contracts, index futures contracts and foreign currency
futures contracts. An interest rate, index or foreign currency futures contract
provides for the future sale by one party and purchase by another party of a
specified quantity of a financial instrument or the cash value of an index(1) at
a specified price and time. A public market exists in futures contracts covering
a number of indexes (including, but not limited to: the Standard & Poor's 500
Index, the Russell 2000 Index, the Value Line Composite Index, and the New York
Stock Exchange Composite Index) as well as financial instruments (including, but
not limited to: U.S. Treasury bonds, U.S. Treasury notes, Eurodollar
certificates of deposit and foreign currencies). Other index and financial
instrument futures contracts are available and it is expected that additional
futures contracts will be developed and traded.

The Fund may purchase and write call and put futures options. Futures
options possess many of the same characteristics as options on securities,
indexes and foreign currencies (discussed above). A futures option gives the
holder the right, in return for the premium paid, to assume a long position
(call) or short position (put) in a futures contract at a specified exercise
price at any time during the period of the option. Upon exercise of a call
option, the holder acquires a long position in the futures contract and the
writer is assigned the opposite short position. In the case of a put option, the
opposite is true. The Fund might, for example, use futures contracts to hedge
against or gain exposure to fluctuations in the general level of stock prices,
anticipated changes in interest rates or currency fluctuations that might
adversely affect either the value of the Fund's securities or the price of the
securities that the Fund intends to purchase. Although other techniques could be
used to reduce or increase the Fund's exposure to stock price, interest rate and
currency fluctuations, the Fund may be able to achieve its desired exposure more
effectively and perhaps at a lower cost by using futures contracts and futures
options.

----------
(1) A futures contract on an index is an agreement pursuant to which two
parties agree to take or make delivery of an amount of cash equal to the
difference between the value of the index at the close of the last trading
day of the contract and the price at which the index contract was
originally written. Although the value of a securities index is a function
of the value of certain specified securities, no physical delivery of those
securities is made.

S-12

The Fund will only enter into futures contracts and futures options that
are standardized and traded on an exchange, board of trade or similar entity, or
quoted on an automated quotation system.

The success of any futures transaction depends on Calamos correctly
predicting changes in the level and direction of stock prices, interest rates,
currency exchange rates and other factors. Should those predictions be
incorrect, the Fund's return might have been better had the transaction not been
attempted; however, in the absence of the ability to use futures contracts,
Calamos might have taken portfolio actions in anticipation of the same market
movements with similar investment results, but, presumably, at greater
transaction costs. When a purchase or sale of a futures contract is made by the
Fund, the Fund is required to deposit with its custodian (or broker, if legally
permitted) a specified amount of cash or U.S. government securities or other
securities acceptable to the broker ("initial margin"). The margin required for
a futures contract is set by the exchange on which the contract is traded and
may be modified during the term of the contract, although the Fund's broker may
require margin deposits in excess of the minimum required by the exchange. The
initial margin is in the nature of a performance bond or good faith deposit on
the futures contract, which is returned to the Fund upon termination of the
contract, assuming all contractual obligations have been satisfied. The Fund
expects to earn interest income on its initial margin deposits. A futures
contract held by the Fund is valued daily at the official settlement price of
the exchange on which it is traded. Each day the Fund pays or receives cash,
called "variation margin," equal to the daily change in value of the futures
contract. This process is known as "marking-to-market." Variation margin paid or
received by the Fund does not represent a borrowing or loan by the Fund but is
instead settlement between the Fund and the broker of the amount one would owe
the other if the futures contract had expired at the close of the previous day.
In computing net asset value, the Fund will mark-to-market its open futures
positions.

The Fund is also required to deposit and maintain margin with respect to
put and call options on futures contracts written by it. Such margin deposits
will vary depending on the nature of the underlying futures contract (and the
related initial margin requirements), the current market value of the option and
other futures positions held by the Fund. Although some futures contracts call
for making or taking delivery of the underlying securities, usually these
obligations are closed out prior to delivery by offsetting purchases or sales of
matching futures contracts (same exchange, underlying security or index, and
delivery month). If an offsetting purchase price is less than the original sale
price, the Fund realizes a capital gain, or if it is more, the Fund realizes a
capital loss. Conversely, if an offsetting sale price is more than the original
purchase price, the Fund realizes a capital gain, or if it is less, the Fund
realizes a capital loss. The transaction costs must also be included in these
calculations.

RISKS ASSOCIATED WITH FUTURES. There are several risks associated with the
use of futures contracts and futures options. A purchase or sale of a futures
contract may result in losses in excess of the amount invested in the futures
contract. In trying to increase or reduce market exposure, there can be no
guarantee that there will be a correlation between price movements in the
futures contract and in the portfolio exposure sought. In addition, there are
significant differences between the securities and futures markets that could
result in an imperfect correlation between the markets, causing a given
transaction not to achieve its objectives. The degree of imperfection of
correlation depends on circumstances such as: variations in speculative market
demand for futures, futures options and the related securities, including
technical influences in futures and futures options trading and differences
between the securities markets and the securities underlying the standard
contracts available for trading. For example, in the case of index futures
contracts, the composition of the index, including the issuers and the weighing
of each issue, may differ from the composition of the Fund's portfolio, and, in
the case of interest rate futures contracts, the interest rate levels,
maturities and creditworthiness of the issues underlying the futures contract
may differ from the financial instruments held in the Fund's portfolio. A
decision as to whether, when and how to use futures contracts involves the
exercise of skill and judgment, and even a well-

S-13

conceived transaction may be unsuccessful to some degree because of market
behavior or unexpected stock price or interest rate trends.

Futures exchanges may limit the amount of fluctuation permitted in certain
futures contract prices during a single trading day. The daily limit establishes
the maximum amount that the price of a futures contract may vary either up or
down from the previous day's settlement price at the end of the current trading
session. Once the daily limit has been reached in a futures contract subject to
the limit, no more trades may be made on that day at a price beyond that limit.
The daily limit governs only price movements during a particular trading day and
therefore does not limit potential losses because the limit may work to prevent
the liquidation of unfavorable positions. For example, futures prices have
occasionally moved to the daily limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of positions and
subjecting some holders of futures contracts to substantial losses. Stock index
futures contracts are not normally subject to such daily price change
limitations.

There can be no assurance that a liquid market will exist at a time when
the Fund seeks to close out a futures or futures option position. The Fund would
be exposed to possible loss on the position during the interval of inability to
close, and would continue to be required to meet margin requirements until the
position is closed. In addition, many of the contracts discussed above are
relatively new instruments without a significant trading history. As a result,
there can be no assurance that an active secondary market will develop or
continue to exist.

LIMITATIONS ON OPTIONS AND FUTURES. If other options, futures contracts or
futures options of types other than those described herein are traded in the
future, the Fund may also use those investment vehicles, provided the Board of
Trustees determines that their use is consistent with the Fund's investment
objective.

When purchasing a futures contract or writing a put option on a futures
contract, the Fund must maintain with its custodian (or broker, if legally
permitted) cash or cash equivalents (including any margin) equal to the market
value of such contract. When writing a call option on a futures contract, the
Fund similarly will maintain with its custodian cash or cash equivalents
(including any margin) equal to the amount by which such option is in the money
until the option expires or is closed by the Fund.

The Fund may not maintain open short positions in futures contracts, call
options written on futures contracts or call options written on indexes if, in
the aggregate, the market value of all such open positions exceeds the current
value of the securities in its portfolio, plus or minus unrealized gains and
losses on the open positions, adjusted for the historical relative volatility of
the relationship between the portfolio and the positions. For this purpose, to
the extent the Fund has written call options on specific securities in its
portfolio, the value of those securities will be deducted from the current
market value of the securities portfolio.

The Fund has claimed an exclusion from registration as a commodity pool
under the Commodity Exchange Act ("CEA") and, therefore, the Fund and its
officers and trustees are not subject to the registration requirements of the
CEA. The Fund reserves the right to engage in transactions involving futures and
options thereon to the extent allowed by Commodity Future Trading Commission
("CFTC") regulations in effect from time to time and in accordance with the
Fund's policies.

SWAPS AND RELATED SWAP PRODUCTS. Swap transactions may include, but are not
limited to, interest rate, currency, securities index, basket, specific
security, fixed income sectors, commodity swaps, asset-backed swaps, interest
rate caps, floors and collars and options on interest rate swaps (collectively
defined as "swap transactions"). The Fund may enter into swap transactions for
any legal purpose consistent with its investment objective and policies, such as
for the purpose of attempting to obtain or preserve a particular return or
spread at a lower cost than obtaining that return or spread through

S-14

purchases and/or sales of instruments in cash markets, to protect against
currency fluctuations, to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date, or to gain exposure
to certain markets in the most economical way possible.

Swap agreements are two-party contracts entered into primarily by
institutional counterparties for periods ranging from a few weeks to several
years. In a standard swap transaction, two parties agree to exchange the returns
(or differentials in rates of return) that would be earned or realized on
specified notional investments or instruments. The gross returns to be exchanged
or "swapped" between the parties are calculated by reference to a "notional
amount," i.e., the return on or increase in value of a particular dollar amount
invested at a particular interest rate, in a particular foreign currency or
commodity, or in a "basket" of securities representing a particular index. The
purchaser of an interest rate cap or floor, upon payment of a fee, has the right
to receive payments (and the seller of the cap or floor is obligated to make
payments) to the extent a specified interest rate exceeds (in the case of a cap)
or is less than (in the case of a floor) a specified level over a specified
period of time or at specified dates. The purchaser of an interest rate collar,
upon payment of a fee, has the right to receive payments (and the seller of the
collar is obligated to make payments) to the extent that a specified interest
rate falls outside an agreed upon range over a specified period of time or at
specified dates. The purchaser of an option on an interest rate swap, upon
payment of a fee (either at the time of purchase or in the form of higher
payments or lower receipts within an interest rate swap transaction) has the
right, but not the obligation, to initiate a new swap transaction of a
pre-specified notional amount with pre-specified terms with the seller of the
option as the counterparty. The "notional amount" of a swap transaction is the
agreed upon basis for calculating the payments that the parties have agreed to
exchange. For example, one swap counterparty may agree to pay a floating rate of
interest (e.g., 3 month LIBOR) calculated based on a $10 million notional amount
on a quarterly basis in exchange for receipt of payments calculated based on the
same notional amount and a fixed rate of interest on a semi-annual basis. In the
event the Fund is obligated to make payments more frequently than it receives
payments from the other party, it will incur incremental credit exposure to that
swap counterparty. This risk may be mitigated somewhat by the use of swap
agreements which call for a net payment to be made by the party with the larger
payment obligation when the obligations of the parties fall due on the same
date. Under most swap agreements entered into by the Fund, payments by the
parties will be exchanged on a "net basis", and the Fund will receive or pay, as
the case may be, only the net amount of the two payments.

S-15

amount sufficient at all times to cover its current obligations under its swap
transactions, caps, floors and collars. If the Fund enters into a swap agreement
on a net basis, it will earmark and reserve assets with a daily value at least
equal to the excess, if any, of the Fund's accrued obligations under the swap
agreement over the accrued amount the Fund is entitled to receive under the
agreement. If the Fund enters into a swap agreement on other than a net basis,
or sells a cap, floor or collar, it will earmark and reserve assets with a daily
value at least equal to the full amount of the Fund's accrued obligations under
the agreement. The Fund will not enter into any swap transaction, cap, floor, or
collar, unless the counterparty to the transaction is deemed creditworthy by
Calamos. If a counterparty defaults, the Fund may have contractual remedies
pursuant to the agreements related to the transaction. The swap markets in which
many types of swap transactions are traded have grown substantially in recent
years, with a large number of banks and investment banking firms acting both as
principals and as agents utilizing standardized swap documentation. As a result,
the markets for certain types of swaps (e.g., interest rate swaps) have become
relatively liquid. The markets for some types of caps, floors and collars are
less liquid.

During the term of a swap, cap, floor or collar, changes in the value of
the instrument are recognized as unrealized gains or losses by marking to market
to reflect the market value of the instrument. When the instrument is
terminated, the Fund will record a realized gain or loss equal to the
difference, if any, between the proceeds from (or cost of) the closing
transaction and the Fund's basis in the contract. The federal income tax
treatment with respect to swap transactions, caps, floors, and collars may
impose limitations on the extent to which the Fund may engage in such
transactions.

CREDIT DEFAULT SWAPS. As described above, swap agreements are two party
contracts entered into primarily by institutional investors for periods ranging
typically from three to 10 years, although shorter or longer periods do exist.
In the case of a credit default swap ("CDS"), the contract gives one party (the
buyer) the right to recoup the economic value of a decline in the value of debt
securities of the reference issuer if the credit event (including a default of
restructuring) occurs. This value is obtained by delivering a debt security of
the reference issuer to the party in return for a previously agreed payment from
the other party (frequently, the par value of the debt security) and by cash
settlement of the transaction. CDS include credit default swaps, which are
contracts on individual securities, and CDX, which are contracts on baskets or
indices of securities.

Credit default swaps may require initial premium (discount) payments as
well as periodic payments (receipts) related to the interest leg of the swap or
to the default of a reference obligation.

If the Fund is a seller of a CDS contract, the Fund would be required to
pay the par (or other agreed upon) value of a referenced debt obligation to the
counterparty in the event of a default or other credit event by the reference
issuer, such as a U.S. or foreign corporate issuer, with respect to such debt
obligations. In return, the Fund would receive from the counterparty a periodic
stream of payments over the term of the contract provided that no event of
default has occurred. If no default occurs, the Fund would keep the stream of
payments and would have no payment obligations. As the seller, the Fund would be
subject to investment exposure on the notional amount of the swap.

If the Fund is a buyer of a CDS contract, the Fund would have the right to
deliver a referenced debt obligation and receive the par (or other agreed-upon)
value of such debt obligation from the counterparty in the event of a default or
other credit event (such as a credit downgrade) by the reference issuer, such as
a U.S. or foreign corporation, with respect to its debt obligations. In return,
the Fund would pay the counterparty a periodic stream of payments over the term
of the contract provided that no event of default has occurred. If no default
occurs, the counterparty would keep the stream of payments and would have no
further obligations to the Fund.

S-16

The use of CDSs, like all swap agreements, is subject to certain risks. If
a counterparty's creditworthiness declines, the value of the swap would likely
decline. Moreover, there is no guarantee that the Fund could eliminate its
exposure under an outstanding swap agreement by entering into an offsetting swap
agreement with the same or another party.

WARRANTS. The Fund may invest in warrants. A warrant is a right to purchase
common stock at a specific price (usually at a premium above the market value of
the underlying common stock at time of issuance) during a specified period of
time. A warrant may have a life ranging from less than a year to twenty years or
longer, but a warrant becomes worthless unless it is exercised or sold before
expiration. In addition, if the market price of the common stock does not exceed
the warrant's exercise price during the life of the warrant, the warrant will
expire worthless. Warrants have no voting rights, pay no dividends and have no
rights with respect to the assets of the corporation issuing them. The
percentage increase or decrease in the value of a warrant may be greater than
the percentage increase or decrease in the value of the underlying common stock.

PORTFOLIO TURNOVER. Although the Fund does not purchase securities with a
view to rapid turnover, there are no limitations on the length of time that
portfolio securities must be held. Portfolio turnover can occur for a number of
reasons, including calls for redemption, general conditions in the securities
markets, more favorable investment opportunities in other securities, or other
factors relating to the desirability of holding or changing a portfolio
investment. The portfolio turnover rates may vary greatly from year to year. A
high rate of portfolio turnover in the Fund would result in increased
transaction expense, which must be borne by that Fund. High portfolio turnover
may also result in the realization of capital gains or losses and, to the extent
net short term capital gains are realized, any distributions resulting from such
gains will be considered ordinary income for federal income tax purposes.

SHORT SALES. The Fund may attempt to hedge against market risk and to
enhance income by selling short "against the box," that is: (1) entering into
short sales of securities that it currently has the right to acquire through the
conversion or exchange of other securities that it owns, or to a lesser extent,
entering into short sales of securities that it currently owns; and (2) entering
into arrangements with the broker dealers through which such securities are sold
short to receive income with respect to the proceeds of short sales during the
period the Fund's short positions remain open. The Fund may make short sales of
securities only if at all times when a short position is open the Fund owns an
equal amount of such securities or securities convertible into or exchangeable
for, without payment of any further consideration, securities of the same issue
as, and equal in amount to, the securities sold short.

In a short sale against the box, the Fund does not deliver from its
portfolio the securities sold and does not receive immediately the proceeds from
the short sale. Instead, the Fund borrows the securities sold short from a
broker dealer through which the short sale is executed, and the broker dealer
delivers such securities, on behalf of the Fund, to the purchaser of such
securities. Such broker dealer is entitled to retain the proceeds from the short
sale until the Fund delivers to such broker dealer the securities sold short. In
addition, the Fund is required to pay to the broker dealer the amount of any
dividends paid on shares sold short. Finally, to secure its obligation to
deliver to such broker dealer the securities sold short, the Fund must deposit
and continuously maintain in a separate account with the Fund's custodian an
equivalent amount of the securities sold short or securities convertible into or
exchangeable for such securities without the payment of additional
consideration. The Fund is said to have a short position in the securities sold
until it delivers to the broker dealer the securities sold, at which time the
Fund receives the proceeds of the sale. Because the Fund ordinarily will want to
continue to hold securities in its portfolio that are sold short, the Fund will
normally close out a short position by purchasing on the open market and
delivering to the broker dealer an equal amount of the securities sold short,
rather than by delivering portfolio securities.

S-17

A short sale works the same way, except that the Fund places in the
segregated account cash or U.S. government securities equal in value to the
difference between (i) the market value of the securities sold short at the time
they were sold short and (ii) any cash or U.S. government securities required to
be deposited with the broker as collateral. In addition, so long as the short
position is open, the Fund must adjust daily the value of the segregated account
so that the amount deposited in it, plus any amount deposited with the broker as
collateral, will equal the current market value of the security sold short.
However, the value of the segregated account may not be reduced below the point
at which the segregated account, plus any amount deposited with the broker, is
equal to the market value of the securities sold short at the time they were
sold short.

Short sales may protect the Fund against the risk of losses in the value of
its portfolio securities because any unrealized losses with respect to such
portfolio securities should be wholly or partially offset by a corresponding
gain in the short position. However, any potential gains in such portfolio
securities should be wholly or partially offset by a corresponding loss in the
short position. The extent to which such gains or losses are offset will depend
upon the amount of securities sold short relative to the amount the Fund owns,
either directly or indirectly, and, in the case where the Fund owns convertible
securities, changes in the conversion premium. Short sale transactions of the
Fund involve certain risks. In particular, the imperfect correlation between the
price movements of the convertible securities and the price movements of the
underlying common stock being sold short creates the possibility that losses on
the short sale hedge position may be greater than gains in the value of the
portfolio securities being hedged. In addition, to the extent that the Fund pays
a conversion premium for a convertible security, the Fund is generally unable to
protect against a loss of such premium pursuant to a short sale hedge. In
determining the number of shares to be sold short against the Fund's position in
the convertible securities, the anticipated fluctuation in the conversion
premiums is considered. The Fund will also incur transaction costs in connection
with short sales. Certain provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and related Treasury regulations thereunder may limit the
degree to which the Fund is able to enter into short sales and other
transactions with similar effects without triggering adverse tax consequences,
which limitations might impair the Fund's ability to achieve its investment
objective. See "U.S. Federal Income Tax Matters."

In addition to enabling the Fund to hedge against market risk, short sales
may afford the Fund an opportunity to earn additional current income to the
extent the Fund is able to enter into arrangements with broker dealers through
which the short sales are executed to receive income with respect to the
proceeds of the short sales during the period the Fund's short positions remain
open.

INTEREST RATE TRANSACTIONS. In order to seek to reduce the interest rate
risk inherent in the Fund's underlying investments and capital structure, the
Fund, if market conditions are deemed favorable, likely will enter into interest
rate swap or cap transactions to attempt to protect itself from increasing
dividend or interest expenses on its leverage. Interest rate swaps involve the
Fund's agreement with the swap counterparty to pay a fixed rate payment in
exchange for the counterparty agreeing to pay the Fund a payment at a variable
rate that is expected to approximate the rate on any variable rate payment
obligation on the Fund's leverage. The payment obligations would be based on the
notional amount of the swap. The Fund may use an interest rate cap, which would
require it to pay a premium to the cap counterparty and would entitle it, to the
extent that a specified variable rate index exceeds a predetermined fixed rate,
to receive from the counterparty payment of the difference based on the notional
amount. The Fund would use interest rate swaps or caps only with the intent to
reduce or eliminate the risk that an increase in short term interest rates could
have on common share net earnings as a result of leverage.

S-18

Fund receiving or paying, as the case may be, only the net amount of the two
payments. The Fund intends to maintain in a segregated account with its
custodian cash or liquid securities having a value at least equal to the Fund's
net payment obligations under any swap transaction, marked to market daily.

The use of interest rate swaps and caps is a highly specialized activity
that involves investment techniques and risks different from those associated
with ordinary portfolio security transactions. Depending on the state of
interest rates in general, the Fund's use of interest rate swaps or caps could
enhance or harm the overall performance on the common shares. To the extent
there is a decline in interest rates, the value of the interest rate swap or cap
could decline, and could result in a decline in the net asset value of the
common shares. In addition, if short term interest rates are lower than the
Fund's fixed rate of payment on the interest rate swap, the swap will reduce
common share net earnings. If, on the other hand, short term interest rates are
higher than the fixed rate of payment on the interest rate swap, the swap will
enhance common share net earnings. Buying interest rate caps could enhance the
performance of the common shares by providing a maximum leverage expense. Buying
interest rate caps could also decrease the net earnings of the common shares in
the event that the premium paid by the Fund to the counterparty exceeds the
additional amount the Fund would have been required to pay had it not entered
into the cap agreement. The Fund has no current intention of selling an interest
rate swap or cap.

Interest rate swaps and caps do not involve the delivery of securities or
other underlying assets or principal. Accordingly, the risk of loss with respect
to interest rate swaps is limited to the net amount of interest payments that
the Fund is contractually obligated to make. If the counterparty defaults, the
Fund would not be able to use the anticipated net receipts under the swap or cap
to offset the dividend or interest payments on the Fund's leverage. Depending on
whether the Fund would be entitled to receive net payments from the counterparty
on the swap or cap, which in turn would depend on the general state of short
term interest rates at that point in time, such a default could negatively
impact the performance of the common shares.

Although this will not guarantee that the counterparty does not default,
the Fund will not enter into an interest rate swap or cap transaction with any
counter party that Calamos believes does not have the financial resources to
honor its obligation under the interest rate swap or cap transaction. Further,
Calamos will continually monitor the financial stability of a counterparty to an
interest rate swap or cap transaction in an effort to proactively protect the
Fund's investments.

In addition, at the time the interest rate swap or cap transaction reaches
its scheduled termination date, there is a risk that the Fund would not be able
to obtain a replacement transaction or that the terms of the replacement would
not be as favorable as on the expiring transaction. If this occurs, it could
have a negative impact on the performance of the Fund's common shares.

Under certain circumstances, the Fund may choose or be required to redeem
some or all of its preferred shares or prepay any borrowings. This redemption
would likely result in the Fund seeking to terminate early all or a portion of
any swap or cap transaction. Such early termination of a swap could result in
termination payment by or to the Fund. An early termination of a cap could
result in a termination payment to the Fund.

SWAPS, CAPS, FLOORS AND COLLARS. The Fund may enter into interest rate,
currency, index and other swaps and the purchase or sale of related caps, floors
and collars. The Fund expects to enter into these transactions primarily to
preserve a return or spread on a particular investment or portion of its
portfolio, to protect against currency fluctuations, as a duration management
technique or to protect against any increase in the price of securities the Fund
anticipates purchasing at a later date. The Fund will not sell interest rate
caps or floors where it does not own securities or other instruments providing
the income stream the Fund may be obligated to pay. Interest rate swaps involve
the exchange by the Fund with another party of their respective commitments to
pay or receive interest, e.g., an exchange of floating rate payments for fixed
rate payments with respect to a notional amount of principal. A currency swap is

S-19

an agreement to exchange cash flows on a notional amount of two or more
currencies based on the relative value differential among them and an index swap
is an agreement to swap cash flows on a notional amount based on changes in the
values of the reference indices. The purchase of a cap entitles the purchaser to
receive payments on a notional principal amount from the party selling such cap
to the extent that a specified index exceeds a predetermined interest rate or
amount. The purchase of a floor entitles the purchaser to receive payments on a
notional principal amount from the party selling such floor to the extent that a
specified index falls below a predetermined interest rate or amount. A collar is
a combination of a cap and a floor that preserves a certain return within a
predetermined range of interest rates or values.

The Fund will usually enter into swaps on a net basis, i.e., the two
payment streams are netted out in a cash settlement on the payment date or dates
specified in the instrument, with the Fund receiving or paying, as the case may
be, only the net amount of the two payments. Inasmuch as the Fund will segregate
assets (or enter into offsetting positions) to cover its obligations under
swaps, Calamos and the Fund believe such obligations do not constitute senior
securities under the Investment Company Act of 1940 (the "1940 Act") and,
accordingly, will not treat them as being subject to its borrowing restrictions.
The Fund will not enter into any swap, cap, floor or collar transaction unless,
at the time of entering into such transaction, the unsecured long term debt of
the Counterparty, combined with any credit enhancements, is rated at least A by
S&P or Moody's or has an equivalent rating from a NRSRO or is determined to be
of equivalent credit quality by Calamos. If there is a default by the
Counterparty, the Fund may have contractual remedies pursuant to the agreements
related to the transaction. The swap market has grown substantially in recent
years with a large number of banks and investment banking firms acting both as
principals and as agents utilizing standardized swap documentation. As a result,
the swap market has become relatively liquid, however, some swaps may be
considered illiquid. Caps, floors and collars are more recent innovations for
which standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.

STRUCTURED PRODUCTS. The Fund may invest in interests in entities organized
and operated for the purpose of restructuring the investment characteristics of
certain other investments. This type of restructuring involves the deposit with
or purchase by an entity, such as a corporation or trust, of specified
instruments and the issuance by that entity of one or more classes of securities
("structured products") backed by, or representing interests in, the underlying
instruments. The term "structured products" as used herein excludes synthetic
convertibles and interest rate transactions. See "Investment Objective and
Policies--Synthetic Convertible Securities and Interest Rate Transactions." The
cash flow on the underlying instruments may be apportioned among the newly
issued structured products to create securities with different investment
characteristics such as varying maturities, payment priorities and interest rate
provisions, and the extent of the payments made with respect to structured
products is dependent on the extent of the cash flow on the underlying
instruments. The Fund may invest in structured products, which represent derived
investment positions based on relationships among different markets or asset
classes.

The Fund may also invest in other types of structured products, including,
among others, baskets of credit default swaps referencing a portfolio of high
yield securities. A structured product may be considered to be leveraged to the
extent its interest rate varies by a magnitude that exceeds the magnitude of the
change in the index rate. Because they are linked to their underlying markets or
securities, investments in structured products generally are subject to greater
volatility than an investment directly in the underlying market or security.
Total return on the structured product is derived by linking return to one or
more characteristics of the underlying instrument. Because certain structured
products of the type in which the Fund may invest may involve no credit
enhancement, the credit risk of those structured products generally would be
equivalent to that of the underlying instruments. The Fund may invest in a class
of structured products that is either subordinated or unsubordinated to the
right of payment of

S-20

another class. Subordinated structured products typically have higher yields and
present greater risks than unsubordinated structured products. Although the
Fund's purchase of subordinated structured products would have similar economic
effect to that of borrowing against the underlying securities, the purchase will
not be deemed to be leverage for purposes of the Fund's limitations related to
borrowing and leverage.

Certain issuers of structured products may be deemed to be "investment
companies" as defined in the 1940 Act. As a result, the Fund's investments in
these structured products may be limited by the restrictions contained in the
1940 Act. Structured products are typically sold in private placement
transactions, and there currently may be active trading market for structured
products. As a result, certain structured products in which the Fund invests may
be deemed illiquid and subject to its limitation on illiquid investments.

"WHEN ISSUED" AND DELAYED DELIVERY SECURITIES AND REVERSE REPURCHASE
AGREEMENTS. The Fund may purchase securities on a when issued or delayed
delivery basis. Although the payment and interest terms of these securities are
established at the time the Fund enters into the commitment, the securities may
be delivered and paid for a month or more after the date of purchase, when their
value may have changed. The Fund makes such commitments only with the intention
of actually acquiring the securities, but may sell the securities before
settlement date if Calamos deems it advisable for investment reasons. The Fund
may utilize spot and forward foreign currency exchange transactions to reduce
the risk inherent in fluctuations in the exchange rate between one currency and
another when securities are purchased or sold on a when issued or delayed
delivery basis.

The Fund may enter into reverse repurchase agreements with banks and
securities dealers. A reverse repurchase agreement is a repurchase agreement in
which the Fund is the seller of, rather than the investor in, securities and
agrees to repurchase them at an agreed upon time and price. Use of a reverse
repurchase agreement may be preferable to a regular sale and later repurchase of
securities because it avoids certain market risks and transaction costs.

At the time when the Fund enters into a binding obligation to purchase
securities on a when-issued basis or enters into a reverse repurchase agreement,
liquid assets (cash, U.S. Government securities or other "high grade" debt
obligations) of the Fund having a value at least as great as the purchase price
of the securities to be purchased will be segregated on the books of the Fund
and held by the custodian throughout the period of the obligation. The use of
these investment strategies may increase net asset value fluctuation.

ILLIQUID SECURITIES. Investments in Rule 144A Securities could have the
effect of increasing the amount of the Fund's assets invested in illiquid
securities if qualified institutional buyers are unwilling to purchase these
Rule 144A Securities. Illiquid securities may be difficult to dispose of at a
fair price at the times when the Fund believes it is desirable to do so. The
market price of illiquid securities generally is more volatile than that of more
liquid securities, which may adversely affect the price that the Fund pays for
or recovers upon the sale of illiquid securities. Illiquid securities are also
more difficult to value and Calamos' judgment may play a greater role in the
valuation process. Investment of the Fund's assets in illiquid securities may
restrict the Fund's ability to take advantage of market opportunities. The risks
associated with illiquid securities may be particularly acute in situations in
which the Fund's operations require cash and could result in the Fund borrowing
to meet its short term needs or incurring losses on the sale of illiquid
securities.

The Fund may invest in bonds, corporate loans, convertible securities,
preferred stocks and other securities that lack a secondary trading market or
are otherwise considered illiquid. Liquidity of a security relates to the
ability to easily dispose of the security and the price to be obtained upon
disposition of the security, which may be less than would be obtained for a
comparable more liquid security. Such

S-21

investments may affect the Fund's ability to realize the net asset value in the
event of a voluntary or involuntary liquidation of its assets.

TEMPORARY DEFENSIVE INVESTMENTS. The Fund may make temporary investments
without limitation when Calamos determines that a defensive position is
warranted. Such investments may be in money market instruments, consisting of
obligations of, or guaranteed as to principal and interest by, the U.S.
Government or its agencies or instrumentalities; certificates of deposit,
bankers' acceptances and other obligations of domestic banks having total assets
of at least $500 million and that are regulated by the U.S. Government, its
agencies or instrumentalities; commercial paper rated in the highest category by
a recognized rating agency; and repurchase agreements.

REPURCHASE AGREEMENTS. As part of its strategy for the temporary investment
of cash, the Fund may enter into "repurchase agreements" with member banks of
the Federal Reserve System or primary dealers (as designated by the Federal
Reserve Bank of New York) in such securities. A repurchase agreement arises when
the Fund purchases a security and simultaneously agrees to resell it to the
vendor at an agreed upon future date. The resale price is greater than the
purchase price, reflecting an agreed upon market rate of return that is
effective for the period of time the Fund holds the security and that is not
related to the coupon rate on the purchased security. Such agreements generally
have maturities of no more than seven days and could be used to permit the Fund
to earn interest on assets awaiting long term investment. The Fund requires
continuous maintenance by the custodian for the Fund's account in the Federal
Reserve/Treasury Book Entry System of collateral in an amount equal to, or in
excess of, the market value of the securities that are the subject of a
repurchase agreement. Repurchase agreements maturing in more than seven days are
considered illiquid securities. In the event of a bankruptcy or other default of
a seller of a repurchase agreement, the Fund could experience both delays in
liquidating the underlying security and losses, including: (a) possible decline
in the value of the underlying security during the period while the Fund seeks
to enforce its rights thereto; (b) possible subnormal levels of income and lack
of access to income during this period; and (c) expenses of enforcing its
rights.

REAL ESTATE INVESTMENT TRUSTS ("REITS") AND ASSOCIATED RISK FACTORS. REITs
are pooled investment vehicles which invest primarily in income producing real
estate or real estate related loans or interests. REITs are generally classified
as equity REITs, mortgage REITs or a combination of equity and mortgage REITs.
Equity REITs invest the majority of their assets directly in real property and
derive income primarily from the collection of rents. Equity REITs can also
realize capital gains by selling properties that have appreciated in value.
Mortgage REITs invest the majority of their assets in real estate mortgages and
derive income from the collection of interest payments. REITs are not subject to
federal income tax on income distributed to shareholders provided they comply
with the applicable requirements of the Code. The Fund will indirectly bear its
proportionate share of any management and other expenses paid by REITs in which
it invests in addition to the expenses paid by the Fund. Debt securities issued
by REITs are, for the most part, general and unsecured obligations and are
subject to risks associated with REITs.

Investing in REITs involves certain unique risks in addition to those risks
associated with investing in the real estate industry in general. An equity REIT
may be affected by changes in the value of the underlying properties owned by
the REIT. A mortgage REIT may be affected by changes in interest rates and the
ability of the issuers of its portfolio mortgages to repay their obligations.
REITs are dependent upon the skills of their managers and are not diversified.
REITs are generally dependent upon maintaining cash flows to repay borrowings
and to make distributions to shareholders and are subject to the risk of default
by lessees or borrowers. REITs whose underlying assets are concentrated in
properties used by a particular industry, such as health care, are also subject
to risks associated with such industry.

REITs (especially mortgage REITs) are also subject to interest rate risks.
When interest rates decline, the value of a REIT's investment in fixed rate
obligations can be expected to rise. Conversely,

S-22

when interest rates rise, the value of a REIT's investment in fixed rate
obligations can be expected to decline. If the REIT invests in adjustable rate
mortgage loans the interest rates on which are reset periodically, yields on a
REIT's investments in such loans will gradually align themselves to reflect
changes in market interest rates. This causes the value of such investments to
fluctuate less dramatically in response to interest rate fluctuations than would
investments in fixed rate obligations.

REITs may have limited financial resources, may trade less frequently and
in a limited volume and may be subject to more abrupt or erratic price movements
than larger company securities. Historically REITs have been more volatile in
price than the larger capitalization stocks included in Standard & Poor's 500
Stock Index.

OTHER INVESTMENT COMPANIES. The Fund may invest in the securities of other
investment companies, including other investment companies within the Calamos
fund complex, to the extent that such investments are consistent with the Fund's
investment objective and policies and permissible under the 1940 Act. Under the
1940 Act, the Fund may not acquire the securities of other domestic or non U.S.
investment companies if, as a result, (i) more than 10% of the Fund's total
assets would be invested in securities of other investment companies, (ii) such
purchase would result in more than 3% of the total outstanding voting securities
of any one investment company being held by the Fund, or (iii) more than 5% of
the Fund's total assets would be invested in any one investment company. These
limitations do not apply to the purchase of shares of money market funds or any
investment company in connection with a merger, consolidation, reorganization or
acquisition of substantially all the assets of another investment company.

The Fund, as a holder of the securities of other investment companies, will
bear its pro rata portion of the other investment companies' expenses, including
advisory fees. These expenses are in addition to the direct expenses of the
Fund's own operations.

INVESTMENT RESTRICTIONS

The following are the Fund's fundamental investment restrictions. These
restrictions may not be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities (which for this purpose and
under the 1940 Act means the lesser of (i) 67% of the common shares represented
at a meeting at which more than 50% of the outstanding common shares are
represented or (ii) more than 50% of the outstanding common shares). If the Fund
were to issue a class of preferred shares, the investment restrictions could not
be changed without the approval of a majority of the outstanding common and
preferred shares, voting together as a class, and the approval of a majority of
the outstanding preferred shares, voting separately by class.

The Fund may not:

(1) Issue senior securities, except as permitted by the 1940 Act and the
rules and interpretive positions of the Commission thereunder.

(2) Borrow money, except as permitted by the 1940 Act and the rules and
interpretive positions of the Commission thereunder.

(3) Invest in real estate, except that the Fund may invest in securities
of issuers that invest in real estate or interests therein, securities
that are secured by real estate or interests therein, securities of
real estate investment funds and mortgage backed securities.

S-23

(4) Make loans, except by the purchase of debt obligations, by entering
into repurchase agreements or through the lending of portfolio
securities and as otherwise permitted by the 1940 Act and the rules
and interpretive positions of the Commission thereunder.

(5) Invest in physical commodities or contracts relating to physical
commodities.

(6) Act as an underwriter, except as it may be deemed to be an underwriter
in a sale of securities held in its portfolio.

(7) Make any investment inconsistent with the Fund's classification as a
diversified investment company under the 1940 Act and the rules and
interpretive positions of the Commission thereunder.

(8) Concentrate its investments in securities of companies in any
particular industry as defined in the 1940 Act and the rules and
interpretive positions of the Commission thereunder.

All other investment policies of the Fund are considered non-fundamental
and may be changed by the Board of Trustees without prior approval of the Fund's
outstanding voting shares.

Currently under the 1940 Act, the Fund is not permitted to issue preferred
shares unless immediately after such issuance the net asset value of the Fund's
portfolio is at least 200% of the liquidation value of the outstanding preferred
shares (i.e., such liquidation value may not exceed 50% of the value of the
Fund's total assets). In addition, currently under the 1940 Act, the Fund is not
permitted to declare any cash dividend or other distribution on its common
shares unless, at the time of such declaration, the net asset value of the
Fund's portfolio (determined after deducting the amount of such dividend or
distribution) is at least 200% of such liquidation value plus any senior
securities representing indebtedness. Currently under the 1940 Act, the Fund is
not permitted to incur indebtedness unless immediately after such borrowing the
Fund has asset coverage of at least 300% of the aggregate outstanding principal
balance of indebtedness (i.e., such indebtedness may not exceed 33 1/3% of the
value of the Fund's total assets). Additionally, currently under the 1940 Act,
the Fund may not declare any dividend or other distribution upon any class of
its shares, or purchase any such shares, unless the aggregate indebtedness of
the Fund has, at the time of the declaration of any such dividend or
distribution or at the time of any such purchase, an asset coverage of at least
300% after deducting the amount of such dividend, distribution, or purchase
price, as the case may be.

Currently under the 1940 Act, the Fund is not permitted to lend money or
property to any person, directly or indirectly, if such person controls or is
under common control with the Fund, except for a loan from the Fund to a company
which owns all of the outstanding securities of the Fund, except directors'
qualifying shares. Currently, under interpretative positions of the Commission,
the Fund may not have on loan at any given time securities representing more
than one third of its total assets.

Currently under the 1940 Act, a "senior security" does not include any
promissory note or evidence of indebtedness where such loan is for temporary
purposes only and in an amount not exceeding 5% of the value of the total assets
of the issuer at the time the loan is made. A loan is presumed to be for
temporary purposes if it is repaid within sixty days and is not extended or
renewed.

Currently, the Fund would be deemed to "concentrate" in a particular
industry if it invested 25% or more of its total assets in that industry.
Currently under the 1940 Act, a "diversified company" means a management company
which meets the following requirements: at least 75% of the value of its total
assets is represented by cash and cash items (including receivables), government
securities, securities of other investment companies, and other securities for
the purposes of this calculation limited in respect of

S-24

any one issuer to an amount not greater in value than 5% of the value of the
total assets of such management company and not more than 10% of the outstanding
voting securities of such issuer.

Under the 1940 Act, the Fund may invest up to 10% of its total assets in
the aggregate in shares of other investment companies and up to 5% of its total
assets in any one investment company, provided the investment does not represent
more than 3% of the voting stock of the acquired investment company at the time
such shares are purchased. These limitations, however, do not apply to the
purchase of money market funds. As a shareholder in any investment company, the
Fund will bear its ratable share of that investment company's expenses, and
would remain subject to payment of the Fund's advisory fees and other expenses
with respect to assets so invested. Holders of common shares would therefore be
subject to duplicative expenses to the extent the Fund invests in other
investment companies. In addition, the securities of other investment companies
may also be leveraged and will therefore be subject to the same leverage risks
described herein and in the Prospectus. As described in the Prospectus in the
section entitled "Risks," the net asset value and market value of leveraged
shares will be more volatile and the yield to shareholders will tend to
fluctuate more than the yield generated by unleveraged shares.

In addition, to comply with federal income tax requirements for
qualification as a "regulated investment company," the Fund's investments will
be limited by both an income and an asset test. See "U.S. Federal Income Tax
Matters."

As a non-fundamental policy, the Fund may not issue preferred shares,
borrow money or issue debt securities with aggregate liquidation value and
principal amount exceeding 38% of the Fund's total assets.

MANAGEMENT OF THE FUND

TRUSTEES AND OFFICERS. The Fund's Board of Trustees provides broad
supervision over the Fund's affairs. The officers of the Fund are responsible
for the Fund's operations. The Fund's Trustees and officers are listed below,
together with their age, positions held with the Fund, term of office and length
of service and principal occupations during the past five years. Asterisks
indicates those Trustees who are interested persons of the Fund within the
meaning of the 1940 Act, and they are referred to as Interested Trustees.
Trustees who are not interested persons of the Fund are referred to as
Independent Trustees. Each of the Trustees serves as a Trustee of other
investment companies (17 U.S. registered investment portfolios) for which
Calamos serves as investment adviser (collectively, the "Calamos Funds"). The
address for all Independent and Interested Trustees and all officers of the Fund
is 2020 Calamos Court, Naperville, Illinois 60563.

S-25

TRUSTEES WHO ARE INTERESTED PERSONS OF THE TRUST:

POSITION(S) PORTFOLIOS PRINCIPAL OCCUPATION(S)
NAME AND AGE WITH TRUST OVERSEEN AND OTHER DIRECTORSHIPS
------------ --------------------- ---------- -----------------------------------

John P. Calamos, Sr., 66* Trustee and President 17 Chairman, CEO, and Co-Chief
(since inception) Investment Officer, Calamos Asset
Management, Inc. ("CAM"), Calamos
Holdings LLC ("CHLLC") and Calamos
Advisors LLC and its predecessor
("Calamos Advisors"), and President
and Co-Chief Investment Officer,
Calamos Financial Services LLC and
its predecessor("CFS"); Director,
CAM

TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE TRUST:

POSITION(S) PORTFOLIOS PRINCIPAL OCCUPATION(S)
NAME AND AGE WITH TRUST OVERSEEN AND OTHER DIRECTORSHIPS
------------ --------------------- ---------- -----------------------------------

Joe F. Hanauer, 69 Trustee 17 Private investor; Director, MAF
(since inception) Bancorp (bank holding company);
Chairman and Director, Move, Inc.,
(internet provider of real estate
information and products);
Director, Combined Investments,
L.P. (investment management)
(investment management)

Weston W. Marsh, 56 Trustee 17 Of Counsel, Partner, Freeborn &
(since inception) Peters (law firm)

John E. Neal, 57 Trustee 17 Private investor; Managing
(since inception) Director, Banc One Capital Markets,
Inc. (investment banking)
(2000-2004); Director, Focused
Health Services (private disease
management company), Equity
Residential (publicly-owned REIT),
Ranir LLC (oral products company)
and CBA Commercial (commercial
mortgage securitization company);
Partner, Private Perfumery LLC
(private label perfume company) and
Linden LLC (health care private
equity)

William R. Rybak, 56 Trustee 17 Private investor; formerly
(since inception) Executive Vice President and Chief
Financial Officer, Van Kampen
Investments, Inc. and subsidiaries
(investment manager); Director,
Howe Barnes Hoefer Arnett, Inc.
(investment services firm) and
PrivateBancorp, Inc. (bank holding
company); Trustee, JNL Series
Trust, JNL Investors Series Trust,
JNL Variable Fund LLC and JNLNY
Variable Fund I LLC**

Stephen B. Timbers, 62 Trustee 17 Private investor; formerly Vice
(since inception) Chairman, Northern Trust
Corporation (bank holding company);
formerly President and Chief
Executive Officer, Northern Trust
Investments, N.A. (investment
manager); formerly President,
Northern Trust Global

S-26

Investments, a division of Northern
Trust Corporation and Executive
Vice President, The Northern Trust
Corporation; formerly, Director,
Northern Trust Securities, Inc.

David D. Tripple, 63 Trustee 17 Private investor; Trustee, Century
(since inception) Shares Trust and Century Small Cap
Select Fund***

----------
* Mr. Calamos is an "interested person" of the Trust as defined in the 1940
Act because he is an affiliate of Calamos Advisors and Calamos Financial
Services LLC.

** Overseeing 91 portfolios in fund complex.

*** Overseeing two portfolios in fund complex.

The address of the Trustees is 2020 Calamos Court, Naperville, Illinois
60563.

OFFICERS. The preceding table gives information about Mr. John Calamos, who
is president of the Trust. The following table sets forth each other officer's
name and age as of the date of this statement of additional information,
position with the Trust and date first appointed to that position, and principal
occupation(s) during the past five years. Each officer serves until his or her
successor is chosen and qualified or until his or her resignation or removal by
the board of trustees.

PRINCIPAL OCCUPATION(S) AND
NAME AND AGE POSITION(S) WITH TRUST OTHER DIRECTORSHIPS
------------ -------------------------------- --------------------------------------

Nimish S. Bhatt, 43 Treasurer (since inception) Senior Vice President and Director of
Operations, CAM, CHLLC, Calamos
Advisors and CFS (since 2004); Senior
Vice President, Alternative
Investments and Tax Services, The
BISYS Group, Inc., prior thereto

Nick P. Calamos, 45 Vice President (since inception) Senior Executive Vice President and
Co-Chief Investment Officer, CAM,
CHLLC, Calamos Advisors and CFS

Patrick H. Dudasik, 52 Vice President (since inception) Executive Vice President, Chief
Financial Officer, Chief Operating
Officer and Treasurer, CAM and CHLLC
(since 2004), Calamos Advisors and CFS
(2001-2005)

James S. Hamman, Jr., 37 Secretary (since inception) Executive Vice President, Secretary
and General Counsel, CAM, CHLLC,
Calamos Advisors and CFS; Chief
Compliance Officer of the Trust
(2004-2005)

Mark J. Mickey, 56 Chief Compliance Officer Chief Compliance Officer, Calamos
(since inception) Funds (since 2005) and Chief
Compliance Officer, Calamos Advisors
(2005-2006); Director of Risk
Assessment and Internal Audit, Calamos
Advisors (2003-2005); President, Mark
Mickey Consulting (2002-2003)

----------
The address of each officer is 2020 Calamos Court, Naperville, Illinois 60563.

S-27

The Fund's Board of Trustees consists of seven members. The term of one
class expires each year commencing with the first annual meeting following this
public offering and no term shall continue for more than three years after the
applicable election. The terms of John P. Calamos, Sr. and William R. Rybak
expire at the first annual meeting following this public offering, the terms of
Joe F. Hanauer, John E. Neal and David D. Tripple expire at the second annual
meeting, and the terms of Stephen B. Timbers and Weston W. Marsh expire at the
third annual meeting. Subsequently, each class of Trustees will stand for
election at the conclusion of its respective term. Such classification may
prevent replacement of a majority of the Trustees for up to a two year period.
Each officer serves until his or her successor is chosen and qualified or until
his or her resignation or removal by the Board of Trustees.

COMMITTEES OF THE BOARD OF TRUSTEES. The Fund's Board of Trustees currently
has four standing committees:

EXECUTIVE COMMITTEE. Messrs. John Calamos and Stephen B. Timbers are
members of the Executive Committee, which has authority during intervals between
meetings of the Board of Trustees to exercise the powers of the Board, with
certain exceptions.

AUDIT COMMITTEE. Stephen B. Timbers, Joe F. Hanauer, John E. Neal, William
R. Rybak, Weston W. Marsh and David D. Tripple, each a non-interested Trustee,
serve on the Audit Committee. The Audit Committee approves the selection of the
independent auditors to the Trustees, approves services to be rendered by the
auditors, monitors the auditors' performance, reviews the results of the Fund's
audit, determines whether to recommend to the Board that the Fund's audited
financial statements be included in the Fund's annual report and responds to
other matters deemed appropriate by the Board of Trustees.

GOVERNANCE COMMITTEE. Stephen B. Timbers, Joe F. Hanauer, John E. Neal,
William R. Rybak, Weston W. Marsh and David D. Tripple, each a non-interested
Trustee, serve on the Governance Committee. The Governance Committee oversees
the independence and effective functioning of the Board of Trustees and
endeavors to be informed about good practices for fund boards. The members of
the Governance Committee make recommendations to the Board of Trustees regarding
candidates for election as non interested Trustees. The Governance Committee
will not consider shareholder recommendations regarding candidates for election
as Trustees.

VALUATION COMMITTEE. David D. Tripple, Stephen B. Timbers and Weston W.
Marsh, each a non-interested Trustee, serve on the Valuation Committee. The
Valuation Committee oversees the implementation of the valuation procedures
adopted by the Board of Trustees. The members of the Valuation Committee make
recommendations to the Board of Trustees regarding valuation matters relating to
the Fund.

In addition to the above committees, there is a Board of Trustees directed
pricing committee comprised of officers of the Fund and employees of Calamos.

The Fund's Agreement and Declaration of Trust provides that the Fund will
indemnify the Trustees and officers against liabilities and expenses incurred in
connection with any claim in which they may be involved because of their offices
with the Fund, unless it is determined in the manner specified in the Agreement
and Declaration of Trust that they have not acted in good faith in the
reasonable belief that their actions were in the best interests of the Fund or
that such indemnification would relieve any officer or Trustee of any liability
to the Fund or its shareholders by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of his or her duties.

COMPENSATION OF OFFICERS AND TRUSTEES. The Fund pays no salaries or
compensation to any of its officers or to the Trustees who are affiliated
persons of Calamos. The following table sets forth certain information with
respect to the compensation paid to each Trustee by the Fund and the Calamos
Fund Complex as a group. Compensation from the Fund is for the current calendar
year and is estimated. Total compensation from the Calamos Fund Complex as a
group is for the calendar year ended

S-28

December 31, 2006.

TOTAL COMPENSATION
ESTIMATED AGGREGATE FROM CALAMOS FUND
NAME OF TRUSTEE COMPENSATION FROM FUND COMPLEX(1)*
--------------- ---------------------- ------------------

John P. Calamos, Sr. ... $ 0 $ 0
Joe F. Hanauer.......... $2,864 $105,500
Weston W. Marsh......... $2,945 $108,500
John E. Neal............ $3,386 $124,750
William Rybak........... $3,166 $116,625
Stephen B. Timbers...... $4,031 $148,500
David D. Tripple........ $2,945 $108,500

----------
(1) Includes fees that may have been deferred during the year pursuant to a
deferred compensation plan with Calamos Investment Trust. Deferred amounts
are treated as though such amounts have been invested and reinvested in
shares of one or more of the portfolios of the Calamos Investment Trust
selected by the Trustee.

* The Calamos Fund Complex consists of seven investment companies and each
applicable series thereunder including the Fund, Calamos Investment Trust,
Calamos Advisors Trust, Calamos Convertible Opportunities and Income Fund,
Calamos Convertible and High Income Fund, Calamos Strategic Total Return
Fund and Calamos Global Total Return Fund.

The Fund has adopted a deferred compensation plan (the "Plan"). Under the
Plan, a Trustee who is not an "interested person" of Calamos and who has elected
to participate in the Plan ("participating Trustees") may defer receipt of all
or a portion of his compensation from Fund in order to defer payment of income
taxes or for other reasons. The deferred compensation payable to the
participating Trustee is credited to Trustee's deferral account as of the
business day such compensation would have been paid to the Trustee. The value of
a Trustee's deferred compensation account at any time is equal to what would be
the value if the amounts credited to the account had instead been invested in
shares of one or more of the portfolios of Calamos Investment Trust as
designated by the Trustee. Thus, the value of the account increases with
contributions to the account or with increases in the value of the measuring
shares, and the value of the account decreases with withdrawals from the account
or with declines in the value of the measuring shares. If a participating
trustee retires, the Trustee may elect to receive payments under the plan in a
lump sum or in equal installments over a period of five years. If a
participating Trustee dies, any amount payable under the Plan will be paid to
the Trustee's beneficiaries.

OWNERSHIP OF SHARES OF THE FUND AND OTHER CALAMOS FUNDS. The following
table indicates the value of shares that each Trustee beneficially owns in the
Fund and the Calamos Fund Complex in the aggregate. The value of shares of the
Calamos Funds is determined on the basis of the net asset value of the class of
shares held as of December 31, 2006. The value of the shares held, are stated in
ranges in accordance with the requirements of the Commission. The table reflects
the Trustee's beneficial ownership of shares of the Calamos Fund Complex.
Beneficial ownership is determined in accordance with the rules of the
Commission.

S-29

AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES IN ALL
DOLLAR RANGE OF EQUITY REGISTERED INVESTMENT COMPANIES
NAME OF TRUSTEE SECURITIES IN THE FUND IN THE CALAMOS FUNDS
--------------- ---------------------- -------------------------------

INTERESTED TRUSTEES:
John P. Calamos......... None Over $100,000

NON-INTERESTED TRUSTEES:
Joe F. Hanauer.......... None Over $100,000
Weston W. Marsh......... None Over $100,000
John E. Neal............ None Over $100,000
William Rybak........... None Over $100,000
Stephen B. Timbers...... None Over $100,000
David D. Tripple........ None Over $100,000

CODE OF ETHICS. The Fund and Calamos have adopted a code of ethics under
Rule 17j-1 of the 1940 Act which is applicable to officers, directors/Trustees
and designated employees of Calamos and CFS. Employees of Calamos and CFS are
permitted to make personal securities transactions, including transactions in
securities that the Fund may purchase, sell or hold, subject to requirements and
restrictions set forth in the code of ethics of Calamos and CFS. The code of
ethics contains provisions and requirements designed to identify and address
certain conflicts of interest between personal investment activities of Calamos
and CFS employees and the interests of investment advisory clients such as the
Fund. Among other things, the code of ethics prohibits certain types of
transactions absent prior approval, imposes time periods during which personal
transactions may not be made in certain securities, and requires the submission
of duplicate broker confirmations and statements and quarterly reporting of
securities transactions. Additional restrictions apply to portfolio managers,
traders, research analysts and others involved in the investment advisory
process. Exceptions to these and other provisions of the code of ethics may be
granted in particular circumstances after review by appropriate personnel. Text
only versions of the code of ethics can be viewed online or downloaded from the
EDGAR Database on the Commission's internet web site at www.sec.gov. You may
review and copy the code of ethics by visiting the Commission's Public Reference
Room in Washington, D.C. Information on the operation of the Public Reference
Room may be obtained by calling the Commission at 202-942-8090. In addition,
copies of the code of ethics may be obtained, after mailing the appropriate
duplicating fee, by writing to the Commission's Public Reference Section, 450
5th Street, N.W., Washington, DC 20549 0102 or by e mail request at
publicinfo@sec.gov.

PROXY VOTING PROCEDURES. The Fund has delegated proxy voting
responsibilities to Calamos, subject to the Board of Trustees' general
oversight. The Fund expects Calamos to vote proxies related to the Fund's
portfolio securities for which the Fund has voting authority consistent with the
Fund's best economic interests. Calamos has adopted its own Proxy Voting
Policies and Procedures ("Policies"). The Policies address, among other things,
conflicts of interest that may arise between the interests of the Fund, and the
interests of the adviser and its affiliates.

The following is a summary of the Policies used by Calamos in voting
proxies.

To assist it in voting proxies, Calamos has established a Committee
comprised of members of its Portfolio Management and Research Departments. The
Committee and/or its members will vote proxies using the following guidelines.

In general, if Calamos believes that a company's management and board have
interests sufficiently aligned with the Fund's interest, Calamos will vote in
favor of proposals recommended by a

S-30

company's board. More specifically, Calamos seeks to ensure that the board of
directors of a company is sufficiently aligned with security holders' interests
and provides proper oversight of the company's management. In many cases this
may be best accomplished by having a majority of independent board members.
Although Calamos will examine board member elections on a case-by-case basis, it
will generally vote for the election of directors that would result in a board
comprised of a majority of independent directors.

Because of the enormous variety and complexity of transactions that are
presented to shareholders, such as mergers, acquisitions, reincorporations,
adoptions of anti-take over measures (including adoption of a shareholder rights
plan, requiring supermajority voting on particular issues, adoption of fair
price provisions, issuance of blank check preferred stocks and the creation of a
separate class of stock with unequal voting rights), changes to capital
structures (including authorizing additional shares, repurchasing stock or
approving a stock split), executive compensation and option plans, that occur in
a variety of industries, companies and market cycles, it is extremely difficult
to foresee exactly what would be in the best interests of the Fund in all
circumstances. Moreover, voting on such proposals involves considerations unique
to each transaction. Accordingly, Calamos will vote on a case-by-case basis on
proposals presenting these transactions.

Finally, Calamos has established procedures to help resolve conflicts of
interests that might arise when voting proxies for the Fund. These procedures
provide that the Committee, along with Calamos' Legal and Compliance
Departments, will examine conflicts of interests with the Fund of which Calamos
is aware and seek to resolve such conflicts in the best interests of the Fund,
irrespective of any such conflict. If a member of the Committee has a personal
conflict of interest, that member will refrain from voting and the remainder of
the Committee will determine how to vote the proxy solely on the investment
merits of any proposal. The Committee will then memorialize the conflict and the
procedures used to address the conflict.

You may obtain a copy a Calamos' Policies by calling 800.582.6959, by
visiting the Fund's website at www.calamos.com, by writing Calamos at: Calamos
Investments, Attn: Client Services, 2020 Calamos Court, Naperville, IL 60563,
and on the Commission's website at www.sec.gov.

INVESTMENT ADVISER AND INVESTMENT MANAGEMENT AGREEMENT. Subject to the
overall authority of the Board of Trustees, Calamos provides the Fund with
investment research, advice and supervision and furnishes continuously an
investment program for the Fund. In addition, Calamos furnishes for use of the
Fund such office space and facilities as the Fund may require for its reasonable
needs and supervises the business and affairs of the Fund and provides the
following other services on behalf of the Fund and not provided by persons not a
party to the investment management agreement: (i) preparing or assisting in the
preparation of reports to and meeting materials for the Trustees; (ii)
supervising, negotiating contractual arrangements with, to the extent
appropriate, and monitoring the performance of, accounting agents, custodians,
depositories, transfer agents and pricing agents, accountants, attorneys,
printers, underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable to Fund operations; (iii) assisting
in the preparation and making of filings with the Commission and other
regulatory and self-regulatory organizations, including, but not limited to,
preliminary and definitive proxy materials, amendments to the Fund's
registration statement on Form N 2 and semi-annual reports on Form N SAR and
Form N CSR; (iv) overseeing the tabulation of proxies by the Fund's transfer
agent; (v) assisting in the preparation and filing of the Fund's federal, state
and local tax returns; (vi) assisting in the preparation and filing of the
Fund's federal excise tax return pursuant to Section 4982 of the Code; (vii)
providing assistance with investor and public relations matters; (viii)
monitoring the valuation of portfolio securities and the calculation of net
asset value; (ix) monitoring the registration of shares of beneficial interest
of the Fund under applicable federal and state securities laws; (x) maintaining
or causing to be maintained for the Fund all books, records and

S-31

reports and any other information required under the 1940 Act, to the extent
that such books, records and reports and other information are not maintained by
the Fund's custodian or other agents of the Fund; (xi) assisting in establishing
the accounting policies of the Fund; (xii) assisting in the resolution of
accounting issues that may arise with respect to the Fund's operations and
consulting with the Fund's independent accountants, legal counsel and the Fund's
other agents as necessary in connection therewith; (xiii) reviewing the Fund's
bills; (xiv) assisting the Fund in determining the amount of dividends and
distributions available to be paid by the Fund to its shareholders, preparing
and arranging for the printing of dividend notices to shareholders, and
providing the transfer and dividend paying agent, the custodian, and the
accounting agent with such information as is required for such parties to effect
the payment of dividends and distributions; and (xv) otherwise assisting the
Fund as it may reasonably request in the conduct of the Fund's business, subject
to the direction and control of the Trustees.

Under the investment management agreement, the Fund pays to Calamos a fee
based on the average weekly managed assets that is computed weekly and paid on a
monthly basis. The fee paid by the Fund is at the annual rate of 1.00% of
average weekly managed assets. Because the fees paid to Calamos are determined
on the basis of the Fund's managed assets, Calamos' interest in determining
whether to leverage the Fund may differ from the interests of the Fund.

Under the terms of its investment management agreement with the Fund,
except for the services and facilities provided by Calamos as set forth therein,
the Fund shall assume and pay all expenses for all other Fund operations and
activities and shall reimburse Calamos for any such expenses incurred by
Calamos. The expenses borne by the Fund shall include, without limitation: (a)
organization expenses of the Fund (including out of pocket expenses, but not
including Calamos' overhead or employee costs); (b) fees payable to Calamos;
(c) legal expenses; (d) auditing and accounting expenses; (e) maintenance of
books and records that are required to be maintained by the Fund's custodian or
other agents of the Fund; (f) telephone, telex, facsimile, postage and other
communications expenses; (g) taxes and governmental fees; (h) fees, dues and
expenses incurred by the Fund in connection with membership in investment
company trade organizations and the expense of attendance at professional
meetings of such organizations; (i) fees and expenses of accounting agents,
custodians, subcustodians, transfer agents, dividend disbursing agents and
registrars; (j) payment for portfolio pricing or valuation services to pricing
agents, accountants, bankers and other specialists, if any; (k) expenses of
preparing share certificates; (l) expenses in connection with the issuance,
offering, distribution, sale, redemption or repurchase of securities issued by
the Fund; (m) expenses relating to investor and public relations provided by
parties other than Calamos; (n) expenses and fees of registering or qualifying
shares of beneficial interest of the Fund for sale; (o) interest charges, bond
premiums and other insurance expenses; (p) freight, insurance and other charges
in connection with the shipment of the Fund's portfolio securities; (q) the
compensation and all expenses (specifically including travel expenses relating
to Fund business) of Trustees, officers and employees of the Fund who are not
affiliated persons of Calamos; (r) brokerage commissions or other costs of
acquiring or disposing of any portfolio securities of the Fund; (s) expenses of
printing and distributing reports, notices and dividends to shareholders; (t)
expenses of preparing and setting in type, printing and mailing prospectuses and
statements of additional information of the Fund and supplements thereto; (u)
costs of stationery; (v) any litigation expenses; (w) indemnification of
Trustees and officers of the Fund; (x) costs of shareholders' and other
meetings; (y) interest on borrowed money, if any; and (z) the fees and other
expenses of listing the Fund's shares on the New York Stock Exchange or any
other national stock exchange.

The investment management agreement was initially approved by the Board on
May 16, 2007. A discussion regarding the basis of the Board's decision to
approve the investment management agreement will be available in the Fund's
first Annual Report to shareholders for the period ending October 31, 2007.
Unless earlier terminated as described below, the investment management
agreement will remain in effect until August 1, 2008. The investment management
agreement continues in effect from year to year so long as such continuation is
approved at least annually by (1) the board of trustees or the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
the Fund, and (2) a majority of the trustees who are not interested persons of
any party to the investment management agreement, cast

S-32

in person at a meeting called for the purpose of voting on such approval. The
investment management agreement may be terminated at any time, without penalty,
by either the Fund or Calamos upon 60 days' written notice, and is automatically
terminated in the event of its assignment as defined in the 1940 Act.

PORTFOLIO MANAGERS

Calamos employs a team approach to portfolio management, with teams
comprised generally of the Co-Chief Investment Officers (the "Co-CIOs"), senior
strategy analysts, intermediate analysts and junior analysts. The Co-CIOs,
directors and senior strategy analysts are supported by deal and lead a team of
investment professionals whose valuable contributions create a synergy of
expertise that can be applied across many different investment strategies. John
P. Calamos, Sr., Co-CIO of Calamos, generally focuses on the top-down approach
of diversification by industry sector and macro-level investment themes, Nick P.
Calamos, Co-CIO of Calamos, also focuses on the top-down approach of
diversification by industry sector and macro-level investment themes and, in
addition, focuses on the bottom-up approach and corresponding research and
analysis. John P. Calamos, Jr., John Hillenbrand, Steve Klouda, Jeff Scudieri
and Jon Vacko are each senior strategy analysts, and Matthew Toms is Director of
Fixed Income. The Co-CUOs, directors and senior strategy analysts are referred
to collectively as "Team Leaders."

The Team Leaders also have responsibility for the day-to-day management of
accounts other than the Fund. Information regarding these other accounts is set
forth below:

The Funds Team Leaders are responsible for managing the Fund and other
accounts, including separate accounts and unregistered funds.

NUMBER OF OTHER ACCOUNTS MANAGED AND ASSETS BY ACCOUNT TYPE AS OF OCTOBER 31, 2006*
-------------------------------------------------------------------------------------------------------------------------
PORTFOLIO REGISTERED INVESTMENT OTHER POOLED INVESTMENT
MANAGER COMPANIES VEHICLES OTHER ACCOUNTS
----------------------- ----------------------------- -------------------------- ---------------------------
ACCOUNTS ASSETS ACCOUNTS ASSETS ACCOUNTS ASSETS
-------- ---------------- -------- ------------- -------- ----------------

John P. Calamos 19 $ 34,265,733,500 3 $ 157,150,982 24,107 $ 11,411,070,978
Nick P. Calamos 19 $ 34,265,733,500 3 $ 157,150,982 24,107 $ 11,411,070,978
John P. Calamos, Jr. 19 $ 34,265,733,500 3 $ 157,150,982 24,107 $ 11,411,070,978
John Hillenbrand 18 $ 33,391,823,326 2 $ 144,807,710 24,107 $ 11,411,070,978
Steve Klouda 18 $ 33,391,823,326 2 $ 144,807,710 24,107 $ 11,411,070,978
Jeff Scudieri 18 $ 33,391,823,326 2 $ 144,807,710 24,107 $ 11,411,070,978
Matthew Toms** -- -- -- -- -- --
Jon Vacko 18 $ 33,391,823,326 2 $ 144,807,710 24,107 $ 11,411,070,978

NUMBER OF ACCOUNTS MANAGED AND ASSETS FOR WHICH ADVISORY FEE IS PERFORMANCE BASED AS OF OCTOBER 31, 2006*
-------------------------------------------------------------------------------------------------------------------------
PORTFOLIO REGISTERED INVESTMENT OTHER POOLED INVESTMENT
MANAGER COMPANIES VEHICLES OTHER ACCOUNTS
----------------------- ----------------------------- -------------------------- ---------------------------
ACCOUNTS ASSETS ACCOUNTS ASSETS ACCOUNTS ASSETS
-------- ---------------- -------- ------------- -------- ----------------

John P Calamos 1 $ 298,895,958 2 $ 95,215,600 1 $ 9,326,764
Nick P Calamos 1 $ 298,895,958 2 $ 95,215,600 1 $ 9,326,764
John P Calamos, Jr. 1 $ 298,895,958 2 $ 95,215,600 1 $ 9,326,764
John Hillenbrand 1 $ 298,895,958 1 $ 82,872,327 1 $ 9,326,764
Steve Klouda 1 $ 298,895,958 1 $ 82,872,327 1 $ 9,326,764
Jeff Scudieri 1 $ 298,895,958 1 $ 82,872,327 1 $ 9,326,764
Matthew Toms** -- -- -- -- -- --
Jon Vacko 1 $ 298,895,958 1 $ 82,872,327 1 $ 9,326,764

* Each Team Leader may invest for his own benefit in securities held in
brokerage and mutual fund accounts. The information shown in the table does
not include information about those accounts where the Team Leader or members
of his family have beneficial or pecuniary interest because no advisory
relationship exists with Calamos or any of its affiliates.

** Matthew Toms joined Calamos in March 2007 and information regarding the
number of accounts managed by Mr. Toms is not yet available.

S-33

Other than potential conflicts between investment strategies, the
side-by-side management of both the Fund and other accounts may raise potential
conflicts of interest due to the interest held by Calamos in an account and
certain trading practices used by the portfolio managers (e.g., cross trades
between the Fund and another account and allocation aggregated trades). Calamos
has developed policies and procedures reasonably designed to mitigate those
conflicts. For example, Calamos will only place cross-trades in accurities held
by the Fund in accordance with the rules promilgated under the 1940 Act and has
adopted policies designed to ensure the fair allocation of securities purchased
on an aggregated basis. The allocation methodology employed by Calamos varies
depending on the type of securities sought to be bought or sold and the type of
client or group of clients. Generally, however, orders are placed first for
those clients that have given Calamos brokerage discretion (including the
ability to step out a portion of trades), and then to clients that have directed
Calamos to execute trades through a specific broker. However, if the directed
broker allows Calamos to execute with other brokerage firms, which then book the
transaction directly with the directed broker, the order will be placed as if
the client had given Calamos full brokerage discretion. Calamos and its
affiliates frequently use a "rotational" method of placing and aggregating
client orders and will build and fill a position for a designated client or
group of clients before placing orders for other clients.

A client account may not receive an allocation of an order if: (a) the
client would receive an unmarketable amount of securities based on account size;
(b) the client has precluded Calamos from using a particular broker; (c) the
cash balance in the client account will be insufficient to pay for the
securities allocated to it at settlement; (d) current portfolio attributes make
an allocation inappropriate; and (e) account specific guidelines, objectives and
other account specific factors make an allocation inappropriate. Allocation
methodology may be modified when strict adherence to the usual allocation is
impractical or leads to inefficient or undesirable results. Calamos head trader
must approve each instance that the usual allocation methodology is not followed
and provide a reasonable basis for such instances and all modifications must be
reported in writing to the Director of Compliance on a monthly basis.

The Team Leaders advise certain accounts under a performance fee
arrangement. A performance fee arrangement may create an incentive for a Team
Leader to make investments that are riskier or more speculative than would be
the case in the absence of performance fees. A performance fee arrangement may
result in increased compensation to the Team Leaders from such accounts due to
under realised appreciation as well as realised gains in the client's account.

As of October 31, 2006, Team Leaders John P. Calamos, Sr., Nick P. Calamos
and John P. Calamos, Jr. receive all of their compensation from Calamos Asset
Management, Inc. Each has entered into employment agreements that provide for
compensation in the form of an annual base salary and a discretionary target
bonus, each payable in cash. Their discretionary target bonus is set at a
percentage of the respective base salary, ranging from 300% to 600%, with a
maximum annual bonus opportunity of 150% of the target bonus. Also, due to the
ownership and executive management positions with Calamos and its parent
company, additional multiple corporate objectives are utilized to determine the
discretionary target bonus for John P. Calamos, Sr., Nick P. Calamos and John P.
Calamos, Jr. For 2006, the additional corporate objectives were: marketing
effectiveness, as measured by redemption rate compared to an absolute target;
advisory fee revenues, measured by growth in revenues; operating efficiencies,
as measured by operating margin percentage compared to a ranking of the top
operating margins of companies in the industry; and stock price performance.

S-34

As of October 31, 2006, John Hillenbrand, Steve Klouda, Jeff Scudieri and
Jon Vacko, and, as of March 2007, Matthew Toms, receive all of their
compensation from Calamos. They each receive compensation in the form of an
annual base salary and a discretionary target bonus, each payable in cash. Their
discretionary target bonus is set at a percentage of the respective base salary.

The amounts paid to all Team Leaders and the criteria utilized to determine
the amounts are benchmarked against industry specific data provided by third
party analytical agencies. The Team Leaders' compensation structure does not
differentiate between the funds and other accounts managed by the Team Leaders,
and is determined on an overall basis, taking into consideration the performance
of the various strategies managed by the Team Leaders. Portfolio performance,
as measured by risk-adjusted portfolio performance, is utilized to determine the
discretionary target bonus, as well as overall performance of Calamos.

All Team Leaders are eligible to receive annual equity awards under a long
term incentive compensation program. With respect to John P. Calamos, Sr., Nick
P. Calamos and John P. Calamos, Jr., the target annual equity awards are set at
a percentage of base salary. With respect to John Hillenbrand, Steve Klouda,
Jeff Scudieri, Matthew Toms and Jon Vacko, the target annual equity awards are
each set at a percentage of the respective base salaries.

Historically, the annual equity awards granted under the long-term
incentive compensation program have been comprised of stock options and
restricted stock units. The stock options and restricted stock units issued to
date have vested annually in one-third installments beginning in the fourth year
after the grant date and each award has been subject to accelerated vesting
under certain conditions. Unless terminated early, the stock options have a
ten-year term.

At June 22, 2007, each portfolio manager beneficially owned (as determined
pursuant to Rule 16a-1a(a)(2) under the 1934 Act) shares of the Fund having
value within the indicated dollar ranges.

FUND
----

John P. Calamos $ 0
Nick P. Calamos $ 0
John P. Calamos, Jr. $ 0
John Hillenbrand $ 0
Steve Klouda $ 0
Jeff Seudieri $ 0
Matthew Toms $ 0
Jon Vacko $ 0

S-35

FUND ACCOUNTANT. Under the arrangements with State Street Bank and Trust
Company ("State Street") to provide fund accounting services, State Street
provides certain administrative and accounting services including providing
daily reconciliation of cash, trades and positions; maintaining general ledger
and capital stock accounts; preparing daily trial balance; calculating net asset
value; providing selected general ledger reports; preferred share compliance;
calculating total returns; and providing monthly distribution analysis to the
Fund and such other funds advised by Calamos that may be part of those
arrangements (the Fund and such other funds are collectively referred to as the
"Calamos Funds"). For the services rendered to the Calamos Funds, State Street
receives fees based on the combined managed assets of the Calamos Funds
("Combined Assets"). State Street receives a fee at the annual rate of 0.009%
for the first $5.0 billion of Combined Assets, 0.0075% for the next $5.0 billion
of Combined Assets, 0.005% for the next $5.0 billion of Combined Assets and
0.0035% for the Combined Assets in excess of $15.0 billion. Each fund of the
Calamos Funds pays its pro-rata share of the fees payable to State Street
described below based on relative managed assets of each fund.

Calamos, and not State Street, will provide the following financial
accounting services to Calamos Funds: management of expenses and expense payment
processing; monitor the calculation of expense accrual amounts for any fund and
make any necessary modifications; coordinate any expense reimbursement
calculations and payment; calculate yields on the funds in accordance with rules
and regulations of the Commission; calculate net investment income dividends and
capital gains distributions; calculate, track and report tax adjustments on all
assets of each fund, including but not limited to contingent debt and preferred
trust obligations; prepare excise tax and fiscal year distributions schedules;
prepare tax information required for financial statement footnotes; prepare
state and federal income tax returns; prepare specialized calculations of
amortization on convertible securities; prepare year-end dividend disclosure
information; calculate trustee deferred compensation plan accruals and
valuations; and prepare Form 1099 information statements for Board members and
service providers. For providing those financial accounting services, Calamos
will receive a fee payable monthly at the annual rate of 0.0175% on the first $1
billion of the average daily net assets of the Calamos Funds; 0.0150% on the
next $1 billion of the average daily net assets of the Calamos Funds; and
0.0110% on the average daily net assets of the Calamos Funds above $2 billion
("financial accounting service fee"). Each fund of the Calamos Funds will pay
its pro-rata share of the financial accounting service fee payable to Calamos
based on relative managed assets of each fund.

PORTFOLIO TRANSACTIONS

Portfolio transactions on behalf of the Fund effected on stock exchanges
involve the payment of negotiated brokerage commissions. There is generally no
stated commission in the case of securities traded in the over the counter
markets, but the price paid by the Fund usually includes an undisclosed dealer
commission or mark up. In underwritten offerings, the price paid by the Fund
includes a disclosed, fixed commission or discount retained by the underwriter
or dealer.

In executing portfolio transactions, Calamos uses its best efforts to
obtain for the Fund the most favorable combination of price and execution
available. In seeking the most favorable combination of price and execution,
Calamos considers all factors it deems relevant, including price, the size of
the transaction, the nature of the market for the security, the amount of
commission, the timing of the transaction taking into account market prices and
trends, the execution capability of the broker dealer and the quality of service
rendered by the broker dealer in other transactions.

S-36

The Trustees have determined that portfolio transactions for the Fund may
be executed through CFS if, in the judgment of Calamos, the use of CFS is likely
to result in prices and execution at least as favorable to the Funds as those
available from other qualified brokers and if, in such transactions, CFS charges
the Fund commission rates consistent with those charged by CFS to comparable
unaffiliated customers in similar transactions. The Board of Trustees, including
a majority of the Trustees who are not "interested" trustees, has adopted
procedures that are reasonably designed to provide that any commissions, fees or
other remuneration paid to CFS are consistent with the foregoing standard. The
Fund will not effect principal transactions with CFS.

Consistent with the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and subject to seeking the most favorable combination
of net price and execution available and such other policies as the Trustees may
determine, Calamos may consider sales of shares of the Fund as a factor in the
selection of broker dealers to execute portfolio transactions for that Fund.

In allocating the Fund's portfolio brokerage transactions to unaffiliated
broker dealers, Calamos may take into consideration the research, analytical,
statistical and other information and services provided by the broker dealer,
such as general economic reports and information, reports or analyses of
particular companies or industry groups, market timing and technical
information, and the availability of the brokerage firm's analysts for
consultation. Although Calamos believes these services have substantial value,
they are considered supplemental to Calamos' own efforts in the performance of
its duties under the management agreement. As permitted by Section 28(e) of the
Securities Exchange Act of 1934 ("1934 Act"), Calamos may pay a broker dealer
that provides brokerage and research services an amount of commission for
effecting a securities transaction for the Fund in excess of the commission that
another broker dealer would have charged for effecting that transaction if the
amount is believed by Calamos to be reasonable in relation to the value of the
overall quality of the brokerage and research services provided. Other clients
of Calamos may indirectly benefit from the provision of these services to
Calamos, and the Fund may indirectly benefit from services provided to Calamos
as a result of transactions for other clients.

REPURCHASE OF COMMON SHARES

The Fund is a closed end investment company and, as such, its shareholders
will not have the right to cause the Fund to redeem their shares. Instead, the
Fund's common shares will trade in the open market at a price that will be a
function of several factors, including dividend levels (which are in turn
affected by expenses), net asset value, call protection, dividend stability,
relative demand for and supply of such shares in the market, general market and
economic conditions and other factors. Because shares of a closed end investment
company may frequently trade at prices lower than net asset value, the Fund's
Board of Trustees may consider action that might be taken to reduce or eliminate
any material discount from net asset value in respect of common shares, which
may include the repurchase of such shares in the open market or in private
transactions, the making of a tender offer for such shares, or the conversion of
the Fund to an open end investment company. The Board of Trustees may decide not
to take any of these actions. In addition, there can be no assurance that share
repurchases or tender offers, if undertaken, will reduce market discount.

Notwithstanding the foregoing, at any time when the Fund's preferred shares
are outstanding, the Fund may not purchase, redeem or otherwise acquire any of
its common shares unless (1) all accumulated preferred shares dividends have
been paid and (2) at the time of such purchase, redemption or acquisition, the
net asset value of the Fund's portfolio (determined after deducting the
acquisition price of the common shares) is at least 200% of the liquidation
value of the outstanding preferred shares (expected to equal the original
purchase price per share plus any accrued and unpaid dividends thereon). Any
service

S-37

fees incurred in connection with any tender offer made by the Fund will be borne
by the Fund and will not reduce the stated consideration to be paid to tendering
shareholders.

Subject to its investment restrictions, the Fund may borrow to finance the
repurchase of shares or to make a tender offer. Interest on any borrowings to
finance share repurchase transactions or the accumulation of cash by the Fund in
anticipation of share repurchases or tenders will reduce the Fund's net income.
Any share repurchase, tender offer or borrowing that might be approved by the
Fund's Board of Trustees would have to comply with the 1934 Act, the 1940
Act and the rules and regulations thereunder.

Although the decision to take action in response to a discount from net
asset value will be made by the Board of Trustees at the time it considers such
issue, it is not currently anticipated that the Board of Trustees would
authorize repurchases of common shares or a tender offer for such shares if: (1)
such transactions, if consummated, would (a) result in the delisting of the
common shares from the New York Stock Exchange, or (b) impair the Fund's status
as a regulated investment company under the Code (which would make the Fund a
taxable entity, causing the Fund's income to be taxed at the entity level in
addition to the taxation of shareholders who receive dividends from the Fund) or
as a registered closed end investment company under the 1940 Act; (2) the Fund
would not be able to liquidate portfolio securities in an orderly manner and
consistent with the Fund's investment objective and policies in order to
repurchase shares; or (3) there is, in the Board's judgment, any (a) material
legal action or proceeding instituted or threatened challenging such
transactions or otherwise materially adversely affecting the Fund, (b) general
suspension of or limitation on prices for trading securities on the New York
Stock Exchange, (c) declaration of a banking moratorium by federal or state
authorities or any suspension of payment by United States or New York banks, (d)
material limitation affecting the Fund or the issuers of its portfolio
securities by federal or state authorities on the extension of credit by lending
institutions or on the exchange of foreign currency, (e) commencement of war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States, or (f) other event or condition which
would have a material adverse effect (including any adverse tax effect) on the
Fund or its shareholders if shares were repurchased.

The repurchase by the Fund of its shares at prices below net asset value
will result in an increase in the net asset value of those shares that remain
outstanding. However, there can be no assurance that share repurchases or tender
offers at or below net asset value will result in the Fund's shares trading at a
price equal to their net asset value. Nevertheless, the fact that the Fund's
shares may be the subject of repurchase or tender offers from time to time, or
that the Fund may be converted to an open end investment company, may reduce any
spread between market price and net asset value that might otherwise exist.

In addition, a purchase by the Fund of its common shares will decrease the
Fund's total managed assets which would likely have the effect of increasing the
Fund's expense ratio. Any purchase by the Fund of its common shares at a time
when preferred shares are outstanding will increase the leverage applicable to
the outstanding common shares then remaining. Before deciding whether to take
any action if the common shares trade below net asset value, the Fund's Board of
Trustees would likely consider all relevant factors, including the extent and
duration of the discount, the liquidity of the Fund's portfolio, the impact of
any action that might be taken on the Fund or its shareholders and market
considerations. Based on these considerations, even if the Fund's shares should
trade at a discount, the Board of Trustees may determine that, in the interest
of the Fund and its shareholders, no action should be taken.

S-38

U.S. FEDERAL INCOME TAX MATTERS

The following is a summary discussion of certain U.S. federal income tax
consequences that may be relevant to a shareholder that acquires, holds and/or
disposes of common shares of the Fund. This discussion only addresses U.S.
federal income tax consequences to U.S. shareholders who hold their shares as
capital assets and does not address all of the U.S. federal income tax
consequences that may be relevant to particular shareholders in light of their
individual circumstances. This discussion also does not address the tax
consequences to shareholders who are subject to special rules, including,
without limitation, financial institutions, insurance companies, dealers in
securities or foreign currencies, foreign holders, persons who hold their shares
as or in a hedge against currency risk, a constructive sale, or conversion
transaction, holders who are subject to the alternative minimum tax, or tax
exempt or tax deferred plans, accounts, or entities. In addition, the discussion
does not address any state, local, or foreign tax consequences. The discussion
reflects applicable tax laws of the United States as of the date hereof, which
tax laws may be changed or subject to new interpretations by the courts or the
Internal Revenue Service ("IRS") retroactively or prospectively. No attempt is
made to present a detailed explanation of all U.S. federal income tax concerns
affecting the Fund and its shareholders, and the discussion set forth herein
does not constitute tax advice. INVESTORS ARE URGED TO CONSULT THEIR OWN TAX
ADVISERS BEFORE MAKING AN INVESTMENT IN THE FUND TO DETERMINE THE SPECIFIC TAX
CONSEQUENCES TO THEM OF INVESTING IN THE FUND, INCLUDING THE APPLICABLE FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES AS WELL AS THE EFFECT OF POSSIBLE
CHANGES IN TAX LAWS.

The Fund intends to elect to be treated and to qualify each year as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code") so that it will not pay U.S. federal income tax
on income and capital gains distributed to shareholders. In order to qualify as
a regulated investment company under Subchapter M of the Code, the Fund must,
among other things, derive at least 90% of its gross income for each taxable
year from: (a) dividends, interest, payments with respect to securities loans,
gains from the sale or other disposition of stock, securities or foreign
currencies, other income (including gains from options, futures and forward
contracts) derived with respect to its business of investing in such stock,
securities or currencies; and (b) net income derived from interests in certain
publicly traded partnerships that are treated as partnerships for U.S. federal
income tax purposes and that derive less than 90% of their gross income from the
items described in (a) above (each a "Qualified Publicly Traded Partnership")
(the "90% income test"). For purposes of the 90% income test, the character of
income earned by certain entities in which the Fund invests that are not treated
as corporations (e.g., partnerships) for U.S. federal income tax purposes will
generally pass through to the Fund. Consequently, the Fund may be required to
limit its equity investments in such entities that earn fee income, rental
income or other nonqualifying income. In addition to the 90% income test, the
Fund must also diversify its holdings (the "asset test") so that, at the end of
each quarter of its taxable year (i) at least 50% of the market value of the
Fund's total assets is represented by cash and cash items, U.S. government
securities, securities of other regulated investment companies and other
securities, with such other securities of any one issuer limited for the
purposes of this calculation to an amount not greater in value than 5% of the
value of the Fund's total assets and to not more than 10% of the outstanding
voting securities of such issuer, and (ii) not more than 25% of the value of its
total assets is invested in the securities (other than U.S. government
securities or securities of other regulated investment companies), of (I) any
one issuer, (II) any two or more issuers controlled by the Fund and engaged in
the same, similar or related trades or businesses, or (III) any one or more
Qualified Publicly Traded Partnerships.

If a Fund qualifies as a regulated investment company and distributes to
its shareholders at least 90% of the sum of (i) its "investment company taxable
income" as that term is defined in the Code (which includes, among other things,
dividends, taxable interest, the excess of any net short term capital gains over
net long term capital losses and certain net foreign exchange gains, less
certain deductible expenses) without regard to the deduction for dividends paid
and (ii) the excess of its gross tax exempt interest, if any, over certain
disallowed deductions, the Fund will be relieved of U.S. federal income tax on
any income of the Fund, including long term capital gains, distributed to
shareholders. However, if the Fund retains any

S-39

investment company taxable income or "net capital gain" (i.e., the excess of
net long term capital gains over net short term capital losses), it will be
subject to U.S. federal income tax at regular corporate rates (currently at a
maximum rate of 35%) on the amount retained. The Fund intends to distribute at
least annually, all or substantially all of its investment company taxable
income, net tax exempt interest, if any, and net capital gain. Under the Code,
the Fund will be subject to a nondeductible 4% federal excise tax on its
undistributed ordinary income and capital gains for any calendar year if it
fails to meet certain distribution requirements with respect to such calendar
year. The Fund intends to make distributions in a timely manner and accordingly
does not expect to be subject to this excise tax.

If for any taxable year the Fund does not qualify as a regulated investment
company for U.S. federal income tax purposes, it would be treated as a
corporation subject to U.S. federal income tax and distributions to its
shareholders would not be deductible by the Fund in computing its taxable
income. In such event, the Fund's distributions, to the extent derived from the
Fund's current or accumulated earnings and profits, would generally constitute
ordinary dividends, which would be eligible for the dividends received deduction
available to corporate shareholders under Section 243 of the Code, and
non-corporate shareholders of the Fund generally would be able to treat such
distributions as "qualified dividend income" under Section 1(h)(11) of the Code
as discussed below.

The Fund expects to declare the initial monthly dividend on the common
shares within approximately 60 days of the completion of this offering and to
pay that initial monthly dividend approximately 90 days after the completion of
this offering. The Fund intends to distribute any net capital gain at least
annually. Dividends from income and/or capital gains may also be paid at such
other times as may be necessary for the Fund to avoid U.S. federal income or
excise taxes.

Unless a shareholder is ineligible to participate or elects otherwise, all
distributions will be automatically reinvested in additional common shares of
the Fund pursuant to the Automatic Dividend Reinvestment Plan (the "Plan"). For
U.S. federal income tax purposes, dividends are generally taxable whether a
shareholder takes them in cash or they are reinvested pursuant to the Plan in
additional shares of the Fund. Distributions of investment company taxable
income, which includes dividends, taxable interest, net short term capital gain
in excess of net long term capital loss and certain net foreign exchange gains,
are generally taxable as ordinary income to the extent of the Fund's current and
accumulated earnings and profits. Under Section 1(h)(11) of the Code, for
taxable years beginning on or before December 31, 2010, qualified dividend
income received by non-corporate shareholders is taxed at rates equivalent to
long term capital gain tax rates, which reach a maximum of 15%. "Qualified
dividend income" generally includes dividends from domestic corporations and
dividends from foreign corporations that meet certain specified criteria,
although dividends paid by REITs will not generally be eligible to qualify as
qualified dividend income. The Fund generally can pass the tax treatment of
qualified dividend income it receives through to Fund shareholders. For the Fund
to receive qualified dividend income, the Fund must meet certain holding period
and other requirements with respect to the stock on which the otherwise
qualified dividend is paid. In addition, the Fund cannot be obligated to make
payments (pursuant to a short sale or otherwise) with respect to substantially
similar or related property. The same provisions, including the holding period
requirements, apply to each shareholder's investment in the Fund. For the
dividends received by the shareholder to be eligible for such treatment. After
December 31, 2010, "qualified dividend income" will no longer be taxed at the
rates applicable to long term capital gains, and the maximum non-corporate tax
rate on long-term capital gains will increase to 20%, unless Congress enacts
legislation providing otherwise. Distributions of net capital gain, if any, are
taxable as long term capital gains for U.S. federal income tax purposes without
regard to the length of time the shareholder has held shares of the Fund. A
distribution of an amount in excess of the Fund's current and accumulated
earnings and profits, if any, will be treated by a shareholder as a tax-free
return of capital which is applied against and reduces the shareholder's basis
in his or her shares. To the extent that the amount of any such distribution
exceeds the shareholder's basis in his or her shares, the excess will be treated
by the shareholder as gain from the sale or exchange of shares. The U.S. federal

S-40

income tax status of all distributions will be designated by the Fund and
reported to the shareholders annually.

If the Fund retains any net capital gain, the Fund may designate the
retained amount as undistributed capital gains in a notice to shareholders who,
if subject to U.S. federal income tax on long term capital gains, (i) will be
required to include in income, as long term capital gain, their proportionate
share of such undistributed amount, and (ii) will be entitled to credit their
proportionate share of the federal income tax paid by the Fund on the
undistributed amount against their U.S. federal income tax liabilities, if any,
and to claim refunds to the extent the credit exceeds such liabilities. For U.S.
federal income tax purposes, the tax basis of shares owned by a shareholder of
the Fund will be increased by the difference between the amount of undistributed
net capital gain included in the shareholder's gross income and the federal
income tax deemed paid by the shareholder.

Any dividend declared by the Fund in October, November or December with a
record date in such a month and paid during the following January will be
treated for U.S. federal income tax purposes as paid by the Fund and received by
shareholders on December 31 of the calendar year in which it is declared.

Foreign exchange gains and losses realized by the Fund in connection with
certain transactions involving foreign currency denominated debt securities,
certain options and futures contracts relating to foreign currency, foreign
currency forward contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code, which
generally causes such gain and loss to be treated as ordinary income and loss
and may affect the amount, timing and character of distributions to
shareholders.

If the Fund acquires any equity interest (generally including not only
stock but also an option to acquire stock such as is inherent in a convertible
bond) in certain foreign corporations that receive at least 75% of their annual
gross income from passive sources (such as interest, dividends, certain rents
and royalties, or capital gains) or that hold at least 50% of their assets in
investments held for the production of such passive income ("passive foreign
investment companies"), the Fund could be subject to U.S. federal income tax and
additional interest charges on "excess distributions" received from such
companies or on gain from the sale of equity interests in such companies, even
if all income or gain actually received by the Fund is timely distributed to its
shareholders. These investments could also result in the treatment of associated
capital gains as ordinary income. The Fund would not be able to pass through to
its shareholders any credit or deduction for such tax. An election may generally
be available that would ameliorate these adverse tax consequences, but any such
election could require the Fund to recognize taxable income or gain (subject to
tax distribution requirements) without the concurrent receipt of cash. The Fund
may limit and/or manage its holdings in passive foreign investment companies to
limit its tax liability or maximize its return from these investments. Dividends
paid by passive foreign investment companies will not be treated as qualified
dividend income.

The Fund may invest to a significant extent in debt obligations that are in
the lowest rating categories or are unrated, including debt obligations of
issuers not currently paying interest or who are in default. Investments in debt
obligations that are at risk of or in default present special tax issues for the

S-41

Fund. The federal income tax laws are not entirely clear about issues such as
when the Fund may cease to accrue interest, original issue discount or market
discount, when and to what extent deductions may be taken for bad debts or
worthless securities and how payments received on obligations in default should
be allocated between principal and income. These and other related issues will
be addressed by the Fund when, as and if it invests in such securities, in order
to seek to ensure that it distributes sufficient income to preserve its status
as a regulated investment company and does not become subject to U.S. federal
income or excise taxes.

If the Fund utilizes leverage through borrowing, asset coverage limitations
imposed by the 1940 Act as well as additional restrictions that may be imposed
by certain lenders on the payment of dividends or distributions could
potentially limit or eliminate the Fund's ability to make distributions on its
common shares until the asset coverage is restored. These limitations could
prevent the Fund from distributing at least 90% of its investment company
taxable income as is required under the Code and therefore might jeopardize the
Fund's qualification as a regulated investment company and/or might subject the
Fund to the nondeductible 4% federal excise tax. Upon any failure to meet the
asset coverage requirements imposed by the 1940 Act, the Fund may, in its sole
discretion and to the extent permitted under the 1940 Act, purchase or redeem
shares of preferred stock in order to maintain or restore the requisite asset
coverage and avoid the adverse consequences to the Fund and its shareholders of
failing to meet the distribution requirements. There can be no assurance,
however, that any such action would achieve these objectives. The Fund will
endeavor to avoid restrictions on its ability to distribute dividends.

If the Fund invests in certain pay in kind securities, deferred interest
securities or, in general, any other securities with original issue discount (or
with market discount if the Fund elects to include market discount in income
currently), the Fund must accrue income on such investments for each taxable
year, which generally will be prior to the receipt of the corresponding cash
payments. However, the Fund must distribute, at least annually, all or
substantially all of its net income, including such accrued income, to
shareholders to avoid U.S. federal income and excise taxes. Therefore, the Fund
may have to dispose of its portfolio securities under disadvantageous
circumstances to generate cash, or may have to leverage itself by borrowing the
cash, to satisfy distribution requirements.

The Fund may acquire market discount bonds. A market discount bond is a
security acquired in the secondary market at a price below its redemption value
(or its adjusted issue price if it is also an original issue discount bond). If
the Fund invests in a market discount bond, it will be required to treat any
gain recognized on the disposition of such market discount bond as ordinary
income (instead of capital gain) to the extent of the accrued market discount
unless the Fund elects to include the market discount in income as it accrues,
as discussed above.

At the time of an investor's purchase of the Fund's shares, a portion of
the purchase price may be attributable to realized or unrealized appreciation in
the Fund's portfolio or undistributed taxable income of the Fund. Consequently,
subsequent distributions by the Fund with respect to these shares from such
appreciation or income may be taxable to such investor even if the net asset
value of the investor's shares is, as a result of the distributions, reduced
below the investor's cost for such shares and the distributions economically
represent a return of a portion of the investment.

Sales and other dispositions of the Fund's shares are taxable events for
shareholders that are subject to federal income tax. Shareholders should consult
their own tax advisors regarding their individual circumstances to determine
whether any particular transaction in the Fund's shares is properly treated as a
sale for tax purposes (as the following discussion assumes) and the tax
treatment of any gains or losses recognized in such transactions. Any loss
realized by a shareholder upon the sale or other disposition of shares with a
tax holding period of six months or less will be treated as a long term capital
loss to the extent of any amounts treated as distributions of long term capital
gain with respect to such shares. Losses on sales or other dispositions of
shares may be disallowed under "wash sale" rules in the event a shareholder
acquires other investments in the Fund (including those made pursuant to
reinvestment of dividends) or other substantially identical stock or securities
within a period of 61 days beginning 30 days before and ending 30 days after a
sale or other disposition of shares. In such a case, the disallowed portion of
any loss generally would be included in the U.S. federal income tax basis of the
shares acquired.

The Fund may engage in various transactions utilizing options, futures
contracts, forward contracts, hedge instruments, straddles, and other similar
transactions. Such transactions may be subject

S-42

to special provisions of the Code that, among other things, affect the character
of any income realized by the Fund from such investments, accelerate recognition
of income to the Fund, defer Fund losses, and affect the determination of
whether capital gain and loss is characterized as long term or short term
capital gain or loss. These rules could therefore affect the character, amount
and timing of distributions to shareholders. These provisions may also require
the Fund to mark to market certain types of the positions in its portfolio
(i.e., treat them as if they were closed out), which may cause the Fund to
recognize income without receiving cash with which to make distributions in
amounts necessary to satisfy the distribution requirements for avoiding U.S.
federal income and excise taxes. Certain of the Fund's investment practices may
also produce income that will not qualify as good income for purposes of the 90%
income taxes described above. The Fund will monitor its transactions, make the
appropriate tax elections, and make the appropriate entries in its books and
records when it acquires an option, futures contract, forward contract, hedge
instrument or other similar investment in order to mitigate the effect of these
rules, prevent disqualification of the Fund as a regulated investment company
and minimize the imposition of U.S. federal income and excise taxes.

The Fund's entry into a short sale transaction, an option or certain other
contracts could be treated as the constructive sale of an appreciated financial
position, causing the Fund to realize gain, but not loss, on the position.

Certain distributions by the Fund may qualify for the dividends received
deduction available to corporate shareholders, subject to certain holding period
and other requirements, but generally only to the extent the Fund earned
dividend income from stock investments in U.S. domestic corporations (other than
REITs).

The IRS has taken the position that if a regulated investment company has
two classes of shares, it must designate distributions made to each class in any
year as consisting of no more than such class's proportionate share of
particular types of income (e.g., dividends qualifying for the dividends
received deduction, "qualified dividend income," ordinary income and net capital
gains). Consequently, if both common shares and preferred shares are
outstanding, the Fund intends to designate distributions made to each class of
particular types of income in accordance with each class' proportionate shares
of such income. Thus, the Fund will designate dividends qualifying for the
corporate dividends received deduction, "qualified dividend income," ordinary
income and net capital gains in a manner that allocates such income between the
holders of common shares and preferred shares in proportion to the total
dividends made to each class during or for the taxable year, or otherwise as
required by applicable law.

The Fund may invest in REITs that hold residual interests in real estate
mortgage investment conduits ("REMICs"). Under a notice recently issued by the
IRS, a portion of the Fund's income from a REIT that is attributable to the
REIT's residual interest in a REMIC (referred to in the Code as an "excess
inclusion") will be subject to federal income tax. This notice also provides
that excess inclusion income of a regulated investment company, such as the
Fund, will be allocated to shareholders of the regulated investment company in
proportion to the dividends received by such shareholders, with the same
consequences as if the shareholders held the related REMIC residual interest
directly. In general, excess inclusion income allocated to shareholders (i)
cannot be offset by net operating losses (subject to a limited exception for
certain thrift institutions), (ii) will constitute unrelated business taxable
income to entities (including a qualified pension plan, an individual retirement
account, a 401(k) plan, a Keogh plan or other tax exempt entity) subject to
federal income tax on unrelated business income, thereby potentially requiring
such an entity that is allocated excess inclusion income, and otherwise might
not be required to file a tax return, to file a federal income tax return and
pay tax on such income, and (iii) in the case of a foreign shareholder, will not
qualify for any reduction in U.S. federal withholding tax. In addition, if at
any time during any taxable year a "disqualified organization" (as defined in
the Code) is a record holder of a share in a regulated investment company, then
the regulated investment company will be subject to a tax equal to that portion
of its excess inclusion income for the taxable year that is allocable to the
disqualified organization, multiplied by the highest federal income tax rate
imposed on corporations. The Fund does not intend to invest in REITs in which a
substantial portion of the assets will consist of residual interests in REMICs.

S-43

The Fund may be subject to withholding and other taxes imposed by foreign
countries, including taxes on interest, dividends and capital gains with respect
to its investments in those countries, which would, if imposed, reduce the yield
on or return from those investments. Tax treaties between certain countries and
the U.S. may reduce or eliminate such taxes in some cases.

If more than 50% of the value of the Fund's total assets at the close of
the taxable year consists of stock or securities of foreign corporations, the
Fund may make an election under Section 853 of the Code to "pass through" to the
Fund's shareholders the foreign income taxes it pays. If this election is made,
shareholders will generally be able to claim a credit or deduction (but not
both) on their federal income tax returns for, and will be required to treat as
part of the amounts distributed to them, their pro rata portion of the income
taxes paid by the Fund to foreign countries (which taxes relate primarily to
investment income). The shareholders of the Fund may claim a federal income tax
credit by reason of the Fund's election, subject to certain limitations imposed
by the Code. Also, under the Code, no deduction for foreign taxes may be claimed
by individual shareholders who do not elect to itemize deductions on their
federal income tax returns, although such a shareholder may be able to claim a
credit for foreign taxes paid and in any event will be treated as having taxable
income in the amount of the shareholder's pro rata share of foreign taxes paid
by the Fund. If the Fund does not make such an election, the foreign taxes paid
by the Fund will reduce the Fund's net investment income. In such a case,
shareholders will not be able to claim either a credit or a deduction for their
pro rata portion of such taxes paid by the Fund, nor will shareholders be
required to treat as part of the amounts distributed to them their pro rata
portion of such taxes paid. Each shareholder should consult his own tax advisor
regarding the potential application of foreign tax credits.

Federal law requires that the Fund withhold, as "backup withholding," 28%
of reportable payments, including dividends, capital gain distributions and the
proceeds of sales or other dispositions of the Fund's shares paid to
shareholders who have not complied with IRS regulations. In order to avoid this
withholding requirement, shareholders must certify on their Account
Applications, or on a separate IRS Form W-9, that the Social Security Number or
other Taxpayer Identification Number they provide is their correct number and
that they are not currently subject to backup withholding, or that they are
exempt from backup withholding. The Fund may nevertheless be required to
withhold if it receives notice from the IRS or a broker that the number provided
is incorrect or backup withholding is applicable as a result of previous
underreporting of interest or dividend income.

Treasury regulations provide that if a shareholder recognizes a loss with
respect to shares of $2 million or more in a single taxable year (or $4 million
or more in any combination of taxable years) for an individual shareholder, S
corporation or trust or $10 million or more in a single taxable year (or $20
million or more in any combination of years) for a shareholder who is a C
corporation, such shareholder will generally be required to file with the IRS a
disclosure statement on Form 8886. Direct shareholders of portfolio securities
are generally excepted from this reporting requirement, but under current
guidance, shareholders of a regulated investment company are not excepted.
Future guidance may extend the current exception from this reporting requirement
to shareholders of most or all regulated investment companies. The fact that a
loss is reportable under these regulations does not affect the legal
determination of whether the taxpayer's treatment of the loss is proper.
Shareholders should consult their tax advisors to determine the applicability of
these regulations in light of their individual circumstances.

The description of certain federal income tax provisions above relates only
to U.S. federal income tax consequences for shareholders who are U.S. persons
(i.e., U.S. citizens or residents or U.S. corporations, partnerships, trusts or
estates). Investors other than U.S. persons may be subject to different U.S. tax
treatment, including U.S. withholding tax at the rate of 30% (or at a lower
treaty rate on amounts treated as ordinary dividends from the Fund provided a
valid and effective IRS Form W-8BEN is on file with the Fund). However,
effective for taxable years of the Fund beginning before January 1, 2008, the
Fund will generally not be required to withhold tax on any amounts paid to a
non-U.S. person with respect to dividends attributable to "qualified short-term
gain" (i.e., the excess of net short-term capital gain over net long-term
capital loss) designated as such by the Fund and dividends attributable to
certain U.S. source interest income that would not be subject to federal
withholding tax if earned directly by a non-U.S. person, provided such amounts
are properly designed by the Fund. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX
ADVISORS ON THESE MATTERS AND ON ANY SPECIFIC QUESTION OF U.S. FEDERAL, STATE,
LOCAL, FOREIGN AND OTHER APPLICABLE TAX LAWS BEFORE MAKING AN INVESTMENT IN THE
FUND.

CUSTODIAN, TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR

The Fund's securities and cash are held under a custodian agreement with
The Bank of New York, One Wall Street, New York, New York 10286. The transfer
agent, dividend paying agent and registrar for the Fund's common shares is also
The Bank of New York.

EXPERTS

The financial statements of the Fund as of June 13, 2007 appearing in this
statement of additional information have been audited by Deloitte & Touche LLP,
111 S. Wacker Drive, Chicago, Illinois, 60606, independent registered public
accounting firm, as set forth in their report thereon appearing elsewhere
herein, and is included in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.

S-44

ADDITIONAL INFORMATION CONCERNING
THE AGREEMENT AND DECLARATION OF TRUST

The Fund's Agreement and Declaration of Trust provides that the Fund's
Trustees shall have the power to cause each shareholder to pay directly, in
advance or arrears, for charges of the Fund's custodian or transfer, shareholder
servicing or similar agent, an amount fixed from time to time by the Trustees,
by setting off such charges due from such shareholder from declared but unpaid
dividends owed such shareholder and/or by reducing the number of shares in the
account of such shareholder by that number of full and/or fractional shares
which represents the outstanding amount of such charges due from such
shareholder. The Fund has no present intention of relying on this provision of
the Agreement and Declaration of Trust and would only do so if consistent with
the 1940 Act or the rules and regulations or interpretations of the Commission
thereunder.

ADDITIONAL INFORMATION

A Registration Statement on Form N-2, including amendments thereto,
relating to the shares offered hereby, has been filed by the Fund with the
Commission, Washington, D.C. The Prospectus and this Statement of Additional
Information do not contain all of the information set forth in the Registration
Statement, including any exhibits and schedules thereto. For further information
with respect to the Fund and the shares offered hereby, reference is made to the
Registration Statement. Statements contained in the Prospectus and this
Statement of Additional Information as to the contents of any contract or other
document referred to are not necessarily complete and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. A copy of the Registration Statement may be inspected without
charge at the Commission's principal office in Washington, D.C., and copies of
all or any part thereof may be obtained from the Commission upon the payment of
certain fees prescribed by the Commission.

S-45

FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholder of Calamos Global Dynamic Income Fund

We have audited the accompanying statement of assets and liabilities of Calamos
Global Dynamic Income Fund (the "Fund"), as of June 13, 2007, and the related
statement of operations for the period from April 10, 2007 through June 13,
2007. These financial statements are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Fund is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. Our audit 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 also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Calamos Global Dynamic Income
Fund as of June 13, 2007, and the results of its operations for the period from
April 10, 2007 through June 13, 2007, in conformity with accounting principles
generally accepted in the United States of America.

DELOITTE & TOUCHE LLP
Chicago, Illinois
June 21, 2007

F-1

CALAMOS GLOBAL DYNAMIC INCOME FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 13, 2007

ASSETS:
Cash ................................................................ $131,500
Deferred offering costs ............................................. 171,357
--------
Total assets ........................................................ 302,857
--------
LIABILITIES:
Accrued offering costs .............................................. 171,357
Accrued organizational expenses ..................................... 31,500
--------
202,857
--------
Net assets (6,992.03 shares of beneficial interest issued and
outstanding; unlimited shares authorized) ........................ $100,000
--------
Net asset value per share ........................................... $ 14.302
--------

F-2

STATEMENT OF OPERATIONS
FOR THE PERIOD FROM APRIL 10, 2007 THROUGH JUNE 13, 2007

Investment income ................................................... $ --
--------
Organizational expenses ............................................. 31,500
Less: reimbursement from investment adviser ......................... (31,500)
--------
Net expenses ........................................................ --
--------
Net investment income ............................................... $ --
--------

F-3

NOTES

1. ORGANIZATION

Calamos Global Dynamic Income Fund (the "Fund") is a diversified,
closed-end management investment company, organized on April 10, 2007 which has
had no operations other than the sale and issuance of 6,992 shares of beneficial
interest at an aggregate purchase price of $100,000 to Calamos Advisors LLC (the
"Investment Adviser" or "Calamos"). The Fund estimates that it will issue common
shares in its initial offering at an aggregate offering price of $500,000,000.
The Fund currently anticipates that it will issue preferred shares as soon as
practicable after the closing of the initial offering of common shares.

2. ACCOUNTING POLICIES

The preparation of the financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual results could
differ from these estimates.

3. AGREEMENTS

The Fund has entered into an Investment Advisory Agreement with Calamos,
which provides for payment of a monthly fee computed at the annual rate of 1.00%
of the Fund's average weekly managed assets. "Managed assets" means the total
assets of the Fund (including any assets attributable to leverage) minus accrued
liabilities (other than liabilities representing leverage). For purposes of
calculating managed assets, the liquidation preference of any preferred shares
outstanding is not considered a liability.

The Fund and other closed end and open end funds advised by Calamos that
are part of these arrangements (the Fund and such other funds are collectively
referred to as the "Calamos Funds") have entered into a Fund Accounting
Servicing Agreement with State Street Bank & Trust Co. ("State Street"). The
Calamos Funds will pay State Street a monthly fee at the annual rate of 0.0090%
for the first $5 billion of combined assets; 0.0075% on the next $5 billion of
combined assets; 0.0050% on the next $5 billion of combined assets and 0.0035%
for the combined assets that exceed $15 billion (for purposes of this
calculation "combined assets" means the total of the average daily net assets of
Calamos Investment Trust and Calamos Advisors Trust and the average weekly
managed assets of Calamos Convertible and High Income Fund, Calamos Convertible
Opportunities and Income Fund, Calamos Strategic Total Return Fund, Calamos
Global Total Return Fund and Calamos Global Dynamic Income Fund). Each fund of
the Calamos Funds will pay its pro-rata share of the fees.

The Calamos Funds have also entered into a Financial Accounting Servicing
Agreement with Calamos. The Calamos Funds will pay Calamos a monthly fee at the
annual rate of 0.0175% on the first $1 billion of combined assets; 0.0150% on
the next $1 billion of combined assets; and 0.0110% on combined assets that
exceed $2 billion. Each fund of the Calamos Funds will pay its pro-rata share of
the fees.

4. ORGANIZATIONAL AND OFFERING EXPENSES

A portion of the net proceeds of the proposed public offering will be used
to pay for the offering costs and organizational expenses. Offering costs
incurred through June 13, 2007 have been reported on the Statement of Assets and
Liabilities as deferred offering costs. These offering costs, as well as
offering costs incurred subsequent to June 13, 2007, will be charged to
paid-in-capital upon sale of the shares to the public. Organizational expenses
have been treated as an expense as incurred and are currently estimated to be
$31,500.

Organization costs recorded in the accompanying financial statements as
well as offering costs which have been incurred and are deferred pending the
receipt of proceeds from the proposed offering reflect management's best
estimate and are subject to change upon the completion of the offering and
conclusion of the organization process. The Investment Adviser has also
committed to bear all organizational and offering costs incurred by the Fund
which exceed $0.03 per common share.

5. FEDERAL INCOME TAXES

The Fund intends to qualify as a "regulated investment company" and as such
(and by complying with the applicable provisions of the Internal Revenue Code of
1986, as amended) will not be subject to Federal income tax on taxable income
(including realized capital gains) that is distributed to shareholders.

F-4

APPENDIX A--DESCRIPTION OF RATINGS(1)

MOODY'S PRIME RATING SYSTEM

Moody's short-term ratings are opinions of the ability of issuers to honor
senior financial obligations and contracts. Such obligations generally have an
original maturity not exceeding one year, unless explicitly noted.

Moody's employs the following designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issuers:

Prime-1: Issuers rated Prime 1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime 1 repayment
ability will often be evidenced by many of the following characteristics:

Leading market positions in well-established industries. High rates of
return on funds employed. Conservative capitalization structure with moderate
reliance on debt and ample asset protection. Broad margins in earnings coverage
of fixed financial charges and high internal cash generation. Well-established
access to a range of financial markets and assured sources of alternate
liquidity.

Prime-2: Issuers (or supporting institutions) rated Prime 2 have a strong
ability to repay senior short-term debt obligations. This will normally be
evidenced by many of the characteristics cited above, but to a lesser degree.
Earnings trends and coverage ratios, while sound, may be more subject to
variation than is the case for Prime 2 securities. Capitalization
characteristics, while still appropriate, may be more affected by external
conditions. Ample alternate liquidity is maintained.

Prime-3: Issuers (or supporting institutions) rated Prime 3 have an
acceptable ability for repayment of senior short-term obligations. The effect of
industry characteristics and market compositions may be more pronounced.
Variability in earnings and profitability may result in changes in the level of
debt-protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.

Not Prime: Issuers rated Not Prime do not fall within any of the Prime
rating categories.

In addition, in certain countries the prime rating may be modified by the
issuer's or guarantor's senior unsecured long-term debt rating.

MOODY'S DEBT RATINGS

AAA: Bonds and preferred stock which are rated Aaa are judged to be of the
best quality. They carry the smallest degree of investment risk and are
generally referred to as "gilt edged." Interest payments are protected by a
large or by an exceptionally stable margin and principal is secure. While the
various protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position of such
issues.

----------
(1) The ratings indicated herein are believed to be the most recent ratings
available at the date of this prospectus for the securities listed. Ratings
are generally given to securities at the time of issuance. While the rating
agencies may from time to time revise such ratings, they undertake no
obligation to do so, and the ratings indicated do not necessarily represent
ratings which will be given to these securities on the date of the fund's
fiscal year-end.

A-1

AA: Bonds and preferred stock which are rated Aa are judged to be of high
quality by all standards. Together with the Aaa group they comprise what are
generally known as high-grade bonds.

They are rated lower than the best bonds because margins of protection may
not be as large as in Aaa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements present which make the
long-term risk appear somewhat larger than the Aaa securities.

A: Bonds and preferred stock which are rated A possess many favorable
investment attributes and are to be considered as upper-medium-grade
obligations. Factors giving security to principal and interest are considered
adequate, but elements may be present which suggest a susceptibility to
impairment some time in the future.

BAA: Bonds and preferred stock which are rated Baa are considered as
medium-grade obligations (i.e., they are neither highly protected nor poorly
secured). Interest payments and principal security appear adequate for the
present but certain protective elements may be lacking or may be
characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact have speculative
characteristics as well.

BA: Bonds and preferred stock which are rated Ba are judged to have
speculative elements; their future cannot be considered as well-assured. Often
the protection of interest and principal payments may be very moderate, and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class.

B: Bonds and preferred stock which are rated B generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small.

CAA: Bonds and preferred stock which are rated Caa are of poor standing.
Such issues may be in default or there may be present elements of danger with
respect to principal or interest.

CA: Bonds and preferred stock which are rated Ca represent obligations
which are speculative in a high degree. Such issues are often in default or have
other marked shortcomings.

C: Bonds and preferred stock which are rated C are the lowest rated class
of bonds, and issues so rated can be regarded as having extremely poor prospects
of ever attaining any real investment standing.

Moody's assigns ratings to individual debt securities issued from
medium-term note (MTN) programs, in addition to indicating ratings to MTN
programs themselves. Notes issued under MTN programs with such indicated ratings
are rated at issuance at the rating applicable to all pari passu notes issued
under the same program, at the program's relevant indicated rating, provided
such notes do not exhibit any of the characteristics listed below. For notes
with any of the following characteristics, the rating of the individual note may
differ from the indicated rating of the program:

1) Notes containing features which link the cash flow and/or market value
to the credit performance of any third party or parties.

2) Notes allowing for negative coupons, or negative principal.

3) Notes containing any provision which could obligate the investor to
make any additional payments.

A-2

Market participants must determine whether any particular note is rated,
and if so, at what rating level.

Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic
rating classification from Aa through Caa. The modifier 1 indicates that the
obligation ranks in the higher end of its generic rating category; the modifier
2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the
lower end of that generic rating category.

STANDARD & POOR'S SHORT-TERM ISSUE CREDIT RATINGS

A-1: A short-term obligation rated A 1 is rated in the highest category by
Standard & Poor's. The obligor's capacity to meet its financial commitment on
the obligation is strong. Within this category, certain obligations are
designated with a plus sign (+). This indicates that the obligor's capacity to
meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated A 2 is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

A-3: A short-term obligation rated A 3 exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

B: A short-term obligation rated B is regarded as having significant
speculative characteristics. The obligor currently has the capacity to meet its
financial commitment on the obligation; however, it faces major ongoing
uncertainties which could lead to the obligor's inadequate capacity to meet its
financial commitment on the obligation.

C: A short-term obligation rated C is currently vulnerable to nonpayment
and is dependent upon favorable business, financial, and economic conditions for
the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated D is in payment default. The D rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless Standard & Poor's
believes that such payments will be made during such grace period. The D rating
also will be used upon the filing of a bankruptcy petition or the taking of a
similar action if payments on an obligation are jeopardized.

STANDARD & POOR'S LONG-TERM ISSUE CREDIT RATINGS

Issue credit ratings are based, in varying degrees, on the following
considerations:

- Likelihood of payment-capacity and willingness of the obligor to meet
its financial commitment on an obligation in accordance with the terms
of the obligation;

- Nature of and provisions of the obligation;

- Protection afforded by, and relative position of, the obligation in
the event of bankruptcy, reorganization, or other arrangement under
the laws of bankruptcy and other laws affecting creditors' rights.

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The issue rating definitions are expressed in terms of default risk. As
such, they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differentiation applies when an entity has
both senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.

AAA: An obligation rated AAA has the highest rating assigned by Standard &
Poor's. The obligor's capacity to meet its financial commitment on the
obligation is extremely strong.

AA: An obligation rated AA differs from the highest rated obligations only
in small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A: An obligation rated A is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB: An obligation rated BBB exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more likely
to lead to a weakened capacity of the obligor to meet its financial commitment
on the obligation.

Obligations rated BB, B, CCC, CC, and C are regarded as having significant
speculative characteristics. BB indicates the least degree of speculation and C
the highest. While such obligations will likely have some quality and protective
characteristics, these may be outweighed by large uncertainties or major
exposures to adverse conditions.

BB: An obligation rated BB is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B: An obligation rated B is more vulnerable to nonpayment than obligations
rated BB, but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

CCC: An obligation rated CCC is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated CC is currently highly vulnerable to nonpayment.

C: A subordinated debt or preferred stock obligation rated C is CURRENTLY
HIGHLY VULNERABLE to nonpayment. The C rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action taken, but payments
on this obligation are being continued. A C also will be assigned to a preferred
stock issue in arrears on dividends or sinking fund payments, but that is
currently paying.

D: An obligation rated D is in payment default. The D rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless Standard & Poor's believes that
such payments will be made during such grace period. The D rating also

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will be used upon the filing of a bankruptcy petition or the taking of a similar
action if payments on an obligation are jeopardized.

Plus (+) or Minus (-): The ratings from AA to CCC may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

R: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating.

N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.

LOCAL CURRENCY AND FOREIGN CURRENCY RISKS

Country risk considerations are a standard part of Standard & Poor's
analysis for credit ratings on any issuer or issue. Currency of repayment is a
key factor in this analysis. An obligor's capacity to repay foreign currency
obligations may be lower than its capacity to repay obligations in its local
currency due to the sovereign government's own relatively lower capacity to
repay external versus domestic debt. These sovereign risk considerations are
incorporated in the debt ratings assigned to specific issues. Foreign currency
issuer ratings are also distinguished from local currency issuer ratings to
identify those instances where sovereign risks make them different for the same
issuer.

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