Managed High Yield Plus Fund Inc. – Fund Commentary

Managed High Yield Plus Fund Inc. (NYSE: HYF) (the “Fund”) is a closed-end management investment

company seeking high income, and secondarily, capital appreciation, primarily through investments in lower rated, income-producing debt and related equity securities.

Fund Commentary for the third quarter 2011 from UBS Global Asset Management (Americas) Inc. (“UBS Global AM”), the Fund’s investment manager

Market Review

The high yield market generated weak results during the third quarter of 2011. High yield prices moved modestly higher in July, benefiting from second quarter corporate profits that often exceeded expectations. High yield prices then moved sharply lower in August and September. Risk appetite, which was robust earlier in the year, was replaced by extreme risk aversion given fears of a double-dip recession, the downgrade of US government debt by a major rating agency and the escalating European debt crisis. At one point in September, the yield on the 10-year Treasury note fell to 1.72%, the lowest level since the 1940s. Given the high yield market's decline during the third quarter, it moved into negative territory year-to-date through the end of September as measured by the BofA Merrill Lynch US High Yield Cash Pay Constrained Index1 (the “Index”). As one would expect given the extreme flight to quality, lower-quality securities broadly underperformed higher-quality securities during the quarter, with CCC rated bonds significantly lagging BB rated bonds. From a sector perspective, more defensive areas of the market outperformed their cyclical counterparts.

Performance Review

For the third quarter of 2011, the Fund posted a net asset value total return of -9.45%, and a market price return of -19.44%. On a net asset value basis, the Fund underperformed its benchmark, the Index, which returned -6.18% for the quarter.

We began the third quarter with overweights versus the index in insurance, gaming, retail and technology. Over the quarter, we reduced the magnitude of the overweight to insurance, as well as reducing our financials exposure more broadly. In contrast, we increased our exposure to industrials. We reduced our exposure to services, primarily through a reduction in our gaming overweight. We also sought to increase the average quality of the portfolio by increasing exposure to the higher quality BB and BBB and above rating categories, while reducing exposure to lower quality CCC and below bonds.

Over the quarter, both sector allocation and issue selection detracted from relative returns. The Fund’s security selection in financials and, in particular, insurance, as well as the Fund’s overweight to the gaming sector were the primary detractors. From a ratings perspective, the Fund's relative underweight to higher-quality bonds detracted as they outperformed over the quarter. Given that the Fund is leveraged, this underperformance was magnified when compared against the Index. (Leverage magnifies returns on both the upside and the downside.)

Outlook

With the outlook for global growth deteriorating, we have revised down our base case for GDP growth in the United States, with expectations now the 0%-2% range. Weak housing and high unemployment are expected to continue to constrain consumption and growth prospects. These uncertain global growth expectations and sovereign debt issues in Europe have continued to add to market volatility. Non-sovereign credit fundamentals remain broadly healthy, with corporate balance sheets in good shape overall. Many companies have also been able to refinance at attractive rates and term-out debt. Current high yield spreads appear to be at levels that provide a sufficient cushion for a material increase in defaults, which remain below average historical levels. The current yield on the asset class remains attractive in an environment of low growth, low cash rates and low defaults. That being said, the potential for significant volatility remains.

Disclaimers Regarding Fund Commentary - The Fund Commentary is intended to assist shareholders in understanding how the Fund performed during the period noted. Views and opinions were current as of the date of this press release. They are not guarantees of performance or investment results and should not be taken as investment advice. Investment decisions reflect a variety of factors, and the Fund and UBS Global AM reserve the right to change views about individual securities, sectors and markets at any time. As a result, the views expressed should not be relied upon as a forecast of the Fund’s future investment intent.

Past performance does not predict future performance. The return and value of an investment will fluctuate so that an investor's shares, when sold, may be worth more or less than their original cost. Any Fund net asset value ("NAV") returns cited in a Fund Commentary assume, for illustration only, that dividends and other distributions, if any, were reinvested at the NAV on the payable dates. Any Fund market price returns cited in a Fund Commentary assume that all dividends and other distributions, if any, were reinvested at prices obtained under the Fund's Dividend Reinvestment Plan. Returns for periods of less than one year have not been annualized. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund dividends and other distributions, if any, or on the sale of Fund shares.

1 The BofA Merrill Lynch US High Yield Cash Pay Constrained Index is an unmanaged index of publicly placed non-convertible, coupon-bearing US dollar denominated below investment grade corporate debt with a term to maturity of at least one year. The index is market weighted, so that larger bond issuers have a greater effect on the index’s return. However, the representation of any single bond issue is restricted to a maximum of 2% of the total index. The index is not leveraged. Investors should note that indices do not reflect the deduction of fees and expenses.