Five MFS Municipal Closed-End Funds Announce Intention to Conduct Issuer Tender Offers for Auction Rate Preferred Shares
06 Juli 2012 - 11:48PM
Business Wire
MFS® Municipal Income Trust (NYSE: MFM), MFS® Investment Grade
Municipal Trust (NYSE: CXH), MFS® California Municipal Fund (NYSE:
CCA), MFS® High Income Municipal Trust (NYSE: CXE), and MFS® High
Yield Municipal Trust (NYSE: CMU) today announced that the Board of
Trustees of each fund has authorized each fund to conduct a
voluntary tender offer for up to 100% of its outstanding auction
rate preferred shares (ARPS) at a price equal to 95% of the ARPS’
per share liquidation preference of $25,000, or $23,750 per share,
plus any unpaid dividends accrued through the expiration date of
the tender offer. The funds expect to announce additional details,
including the timing of the tender offers, as soon as
practicable.
Each fund’s tender offer will be conditioned upon there being
validly tendered and not withdrawn at least 70% of its outstanding
ARPS, the successful private placement of new preferred shares, the
ARPS Holders approval of an amendment to each fund's bylaws to
replace Standard & Poor's with Fitch as a rating agency for the
ARPS and certain other conditions as will be set forth in each
fund’s offer to purchase and related letter of transmittal.
Additional terms of each tender offer will be set forth in the
fund’s tender offer materials when they are filed and become
available. The new preferred shares, if successfully placed, will
allow each fund to replace the leverage currently obtained through
tendered ARPS with new preferred shares.
This announcement is not a recommendation, an offer to purchase
or a solicitation of an offer to sell ARPS of the funds, nor is it
a solicitation of any proxy. The funds have not yet commenced any
tender offer described in this press release. Upon commencement of
a tender offer, the applicable fund will file with the Securities
and Exchange Commission a tender offer statement on Schedule TO and
related exhibits, including an offer to purchase, a related letter
of transmittal and other related documents, and the tender offer
documents, when available, will be mailed by each fund to holders
of the ARPS. A definitive proxy statement, when available, will be
mailed by each fund to holders of ARPS on the record date for the
special meeting relating to such fund’s proposed amendment to its
bylaws as described above. ARPS holders can obtain the tender offer
documents and the definitive proxy statement free of charge when
they are filed and become available on the Securities and Exchange
Commission’s website at www.sec.gov. In addition, each fund will
make available to its ARPS holders, without charge, additional
copies of the proxy statement, the offer to purchase and related
letter of transmittal for such fund. ARPS holders should read these
documents and related exhibits for the applicable fund when they
are filed and become available as the documents will contain
important information about each fund’s tender offer and proxy
solicitation.
MFS® manages $267.8 billion in assets as of May 31, 2012. The
company traces its origins to 1924 and the creation of America's
first mutual fund.
Statements made in this release that look forward in time,
including the timing and expectations for each tender offer and the
related issuance of new preferred shares, involve risks and
uncertainties. Such risks and uncertainties include, without
limitation, the adverse effect from a decline in the securities
markets or a decline in a fund’s performance, a general downturn in
the economy, competition from other closed-end investment
companies, changes in government policy or regulation, inability of
a fund’s investment adviser to attract or retain key employees,
inability of a fund to implement its investment strategy, inability
of a fund to manage rapid expansion and unforeseen costs and other
effects related to legal proceedings or investigations of
governmental and self-regulatory organizations, the inability of a
fund to negotiate acceptable terms for the new preferred shares and
the other risks identified in each fund’s registration statement on
Form N-2 and annual shareholder report on Form N-CSR under the
heading “Investment objective, principal investment strategies and
risks of the fund.”
This release is not a prospectus, circular or representation
intended for use in the purchase or sale of fund shares. Shares of
the funds are not FDIC-insured and are not deposits or other
obligations of, or guaranteed by, any bank. Shares of the funds
involve investment risk, including possible loss of principal. For
more complete information about each fund, including risks,
charges, and expenses, please see the fund’s annual and semi annual
shareholder report.
The funds are closed-end funds. Common shares of the funds are
only available for purchase/sale on the NYSE at the current market
price, except MFS California Municipal Fund, which is available for
purchase/sale on the NYSE/AMEX at the current market price. Common
shares may trade at a discount to NAV.
MFS Investment Management
500 Boylston St., Boston, MA
02116
25466.2
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