THIRD QUARTER REPORT 1998
For the period ending September 30, 1998

SAGE ANNOUNCES THIRD QUARTER RESULTS

Message to Unitholders

SAGE High Yield Debt Trust ("SAGE") is pleased to announce its unaudited financial results for the third quarter ended September 30, 1998, the details of which are attached.

SAGE generated net investment income of $1,248,430 for the nine months ended September 30, 1998 and on October 29, 1998 made a distribution of $0.20 per unit compared with $0.20 per unit for the second quarter of this year. It is anticipated that the distribution for the fourth quarter will be at the same level as this quarter. Since inception, SAGE has made cumulative distributions of $0.59 per unit. Based on a price of $4.50 per instalment receipt as at September 30, 1998, these distributions produced a yield to unitholders of approximately 13.1% over the eleven months ended September 30, 1998.

In the third quarter, the erosion in the US high yield market continued, taking its lead from the volatile global equity markets. High yield spreads widened further from the second quarter as concerns over a decelerating US economy, downside earnings surprises and the economic woes of Asia heightened. Adding to global economic turmoil was Russia's devaluation of the ruble and restructuring of its debt. Mutual fund outflows coupled with a flight to quality resulted in illiquidity and contributed to record wide spreads in the high yield market. More recently, the market has begun to stabilize and show signs of strength in prices of single-B rated credits which has resulted in an improvement in the net asset value of the Trust.

On October 28, 1998, Sage received its final instalment of $15 million. The instalment proceeds will be applied against loans incurred to monetize the final instalment. Under its Trust Agreement, the Fund may borrow up to 33.3% of its total assets to make additional investments. The Manager intends to use this debt capacity as appropriate to enhance unitholder returns.

SAGE is a closed-end investment trust that invests primarily in high yield corporate debt supplemented by high yield equity securities such as income funds and REITs.

SAGE trades on the Toronto Stock Exchange under the symbol "BBB.UN".

For further information, contact:

Mr. James S. Parsons
Director

November 12, 1998.

TRUST PROFILE

Sage High Yield Debt Trust closed its initial public offering in October 1997. The primary objective of the Trust is to provide unitholders with a high level of sustainable income while preserving capital. To achieve this objective, SAGE invests primarily in high yield debt securities supplemented with high yield equities. Unitholders of SAGE can acquire additional units by participating in the Distribution Reinvestment Plan. The Plan enables unitholders to reinvest their quarterly distributions in additional units of SAGE thereby achieving the benefit of compounding returns. SAGE is fully RRSP eligible.