AST BlackRock Value Portfolio - Prudential Annuities

e adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the Portfolio
may invest in CDOs that are subordinate to other classes; and (iv) the complex structure of the security may not be fully
understood at the time of investment and may produce disputes with the issuer or unexpected investment results.
AST PRUDENTIAL CORE BOND PORTFOLIO
Investment Objective: to maximize total return consistent with the long-term preservation of capital.
Principal Investment Policies:
The Portfolio will invest, under normal circumstances, at least 80% of its investable assets in intermediate and long-term debt
obligations and high quality money market instruments. The above-referenced 80% test is applied at the time the Portfolio invests;
later percentage changes caused by a change in Portfolio assets, market values, or ratings downgrades will not require the
Portfolio to dispose of a holding. The Portfolio will not change the above-referenced 80% policy unless it provides at least 60 days
prior written notice to contract owners. The types of debt obligations in which the Portfolio may invest, include, without
limitation, U.S. Government securities, mortgage-related securities (including commercial mortgage-backed securities),
asset-backed securities, bank loans by assignment as well as through loan participations, corporate bonds, and municipal bonds.
The Portfolio may invest without limit in debt obligations issued or guaranteed by the U.S. Government and government-related
entities. An example of a debt security that is backed by the full faith and credit of the U.S. Government is an obligation of the
Government National Mortgage Association. In addition, the Portfolio may invest in U.S. Government securities issued by other
government entities, like the Federal National Mortgage Association and the Student Loan Marketing Association which are not
backed by the full faith and credit of the U.S. Government. Instead, these issuers have the right to borrow from the U.S. Treasury to
meet their obligations. The Portfolio may also invest in the debt securities of other government-related entities, like the Farm Credit
System, which depend entirely upon their own resources to repay their debt.
The Portfolio will invest, under normal circumstances, at least 80% of its net assets in debt obligations that are rated investment
grade. Investment grade debt obligations are those rated within the four highest rating categories assigned by a rating agency such
as Moody’s, S&P, or Fitch, or, if unrated, determined by the Subadviser to be of comparable quality. Likewise, the Portfolio may
invest up to 20% of its net assets in debt obligations rated below investment grade (often referred to as “junk bonds”) by the major
ratings services, or, if unrated, considered to be of comparable quality by the Subadviser. The Portfolio may invest up to 20% of its
total assets in debt securities issued outside the U.S. by U.S. or foreign issuers, whether or not such securities are denominated in
the U.S. dollar.
The Portfolio may also invest in convertible debt and convertible and non-convertible preferred stock of any rating. The Portfolio
will not acquire any common stock except by converting a convertible security or exercising a warrant. No more than 10% of the
Portfolio’s total assets will be held in common stocks, and those will usually be sold as soon as a favorable opportunity arises. The
Portfolio may lend its portfolio securities to brokers, dealers and other financial institutions to earn income.
The Portfolio may invest in leveraged loans. Leveraged loans are business loans made to borrowers that may be U.S. or foreign
corporations, partnerships, or other business entities. The interest rates on leveraged loans are periodically adjusted to a generally
recognized base rate such as the London Interbank Offered Rate or the prime rate as set by the Federal Reserve. Such senior loans
may be rated below investment grade or, if unrated, deemed by Prudential to be the equivalent of below investment grade
securities. The Portfolio’s investment in senior loans will usually be made in the form of participations or assignments.
The Subadviser may use various derivative strategies to try to improve the Portfolio’s returns. The Subadviser may also use hedging
techniques to try to protect the Prudential Portfolio’s assets. The Subadviser and the Portfolio cannot guarantee that these strategies
and techniques will work, that the instruments necessary to implement these strategies and techniques will be available, or that
the Portfolio will not lose money. The use of derivatives — such as futures, foreign currency forward contracts, options on futures,
indexed and inverse floating rate securities, swaps, and swap options — involves costs and can be volatile. With derivatives, the
Portfolio’s subadviser tries to predict if the underlying investment – a security, market index, currency, interest rate or some other
benchmark — will go up or down at some future date. The Subadviser may use derivatives to try to reduce risk or to increase
return consistent with the Portfolio’s overall investment objective. The Subadviser will consider other factors (such as cost) in
deciding whether to employ any particular strategy or technique, or use any particular instrument. Any derivatives used may not
match or offset the Portfolio’s underlying positions and this could result in losses to the Portfolio that would not otherwise have
occurred. Derivatives that involve leverage could magnify losses. When the Portfolio uses derivative strategies, it designates certain
assets as segregated or otherwise covers its exposure, as required by the rules of the Securities and Exchange Commission (the
SEC). For example, with respect to forwards and futures contracts that are not contractually required to “cash-settle,” the Portfolio
must cover its open positions by setting aside liquid assets equal to the contracts’ full, notional value. With respect to forwards and
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