As filed with the U.S. Securities and Exchange Commission on September 22, 2023
Securities Act Registration No. 333-
Investment Company Registration No. 811-05488
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
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Registration Statement under the Securities Act of 1933: |
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Pre-Effective Amendment No. |
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Post-Effective Amendment No. |
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Registration Statement under the Investment Company Act of 1940: |
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Amendment No. 13 |
Nuveen
Municipal Income Fund, Inc.
Exact Name of Registrant as Specified in the Articles of Incorporation
333 West Wacker Drive Chicago, Illinois 60606
Address of Principal Executive Offices (Number, Street, City, State, Zip Code)
(800) 257-8787
Registrant’s Telephone Number, including Area Code
Mark L. Winget
Vice President and
Secretary
333 West Wacker Drive
Chicago, Illinois 60606
Name and
Address (Number, Street, City, State, Zip Code) of Agent for Service
Copies of
Communications to:
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| Thomas S. Harman |
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Eric F. Fess |
| Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue NW
Washington, D.C. 20004 |
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Chapman and Cutler LLP
111 West Monroe Chicago, Illinois
60603 |
Approximate Date of Commencement of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.
☐ Check box if the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans.
☒ Check box if any securities being registered on this Form will be offered on a delayed or continuous basis in reliance on Rule 415
under the Securities Act of 1933 (“Securities Act”), other than securities offered in connection with a dividend reinvestment plan.
☒ Check box if this Form is a registration statement pursuant to General Instruction A.2 or a post-effective amendment thereto.
☐ Check box if this Form is a registration statement pursuant to General Instruction B or a post-effective amendment thereto that will
become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act.
☐ Check box if this Form is a
post-effective amendment to a registration statement filed pursuant to General Instruction B to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act.
It is proposed that this filing will become effective (check appropriate box)
☐ when declared effective pursuant to Section 8(c) of the Securities Act.
If appropriate, check the following box:
☐ This [post-effective] amendment designates a new effective date for a previously filed [post-effective] amendment [registration
statement].
☐ This Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act,
and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: .
☐ This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act
registration statement number of the earlier effective registration statement for the same offering is: .
☐ This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration
statement number of the earlier effective registration statement for the same offering is: .
Check each box that
appropriately characterizes the Registrant:
☒ Registered Closed-End Fund (closed-end company that is registered under the Investment Company Act of 1940 (“Investment Company Act”)).
☐ Business Development Company (closed-end company that intends or has elected to be regulated as
a business development company under the Investment Company Act).
☐ Interval Fund (Registered
Closed-End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c-3 under the Investment Company Act).
☒ A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form).
☐ Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act).
☐ Emerging Growth Company (as defined by Rule 12b-2 under the Securities Exchange Act of 1934
(“Exchange Act”).
☐ If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act.
☐ New Registrant (registered or regulated under the Investment Company Act for less than 12 calendar months preceding this filing).
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a
further amendment that specifically states that the Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act or until the Registration Statement shall become effective on such date as the
Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.
The information in this Prospectus is not complete and may be changed. We may not sell these
securities until the registration statement filed with the U.S. Securities and Exchange Commission is effective. This Prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER 22, 2023
PRELIMINARY BASE PROSPECTUS
2 Million Shares of Common Stock
Nuveen Municipal Income Fund, Inc.
The Offering. Nuveen Municipal Income Fund, Inc. (the “Fund”) is offering, on an immediate, continuous or
delayed basis, in one or more offerings, shares of common stock (the “Common Stock”). The Fund may offer and sell Common Stock directly to one or more purchasers, to or through underwriters, through dealers or agents that the Fund
designates from time to time, or through a combination of these methods. In connection with any offering of Common Stock, the Fund will deliver a prospectus supplement describing such offering, including, as applicable, the names of any
underwriters, dealers or agents and information regarding any applicable purchase price, fee, commission or discount arrangements made with those underwriters, dealers or agents or the basis upon which such amount may be calculated. For more
information about the manners in which the Fund may offer Common Stock, see “Plan of Distribution.”
The Fund. The Fund is a diversified, closed-end management investment
company. The Fund’s investment objective is a high level of current income exempt from federal income tax, which the Fund seeks to achieve by investing primarily in a diversified portfolio of tax-exempt
municipal obligations. There can be no assurance that the Fund will achieve its investment objective or that the Fund’s investment strategies will be successful.
This Prospectus, together with any prospectus supplement, sets forth concisely information about the Fund that a prospective investor
should know before investing, and should be retained for future reference. Investing in Common Stock involves risks. You could lose some or all of your investment. You should consider carefully these risks together with all of the other information
in this prospectus and any related prospectus supplement before making a decision to purchase any of the Common Stock. See “Risk Factors” beginning on page 25.
The shares of Common Stock are listed on the New York Stock Exchange
(the “NYSE”). The trading or “ticker” symbol of the shares of Common Stock is “NMI.” The closing price of the shares of Common Stock, as reported by the NYSE on September 14, 2023, was $9.08 per share of Common
Stock. The net asset value of the shares of Common Stock at the close of business on that same date was $9.64 per share of Common Stock.
Fund Strategies and Policies. The Fund seeks to achieve its investment objective by investing, under normal
circumstances, at least 80% of its Assets (as defined below under “Investment Objective and Policies”) in municipal securities and other related investments, the income from which are exempt from regular federal income taxes. The Fund may
invest up to 20% of its Managed Assets (as defined below under “Investment Objective and Policies”) in municipal securities that pay interest that is taxable under the federal alternative minimum tax applicable to non-corporate taxpayers (“AMT Bonds”). Under normal circumstances, the Fund will invest at least 80% of its Managed Assets in investment grade quality municipal securities. The Fund may invest up to 20% of
its Managed Assets in municipal securities that at the time of investment are rated below investment grade or are unrated but judged to be of comparable quality by Nuveen Asset Management, LLC (“Nuveen Asset Management”). No more than 10%
of the Fund’s Managed Assets may be invested in municipal securities rated below B3/B- by all nationally recognized statistical rating organizations (“NRSROs”) that rate the security or that are
unrated but judged to be of comparable quality by Nuveen Asset Management. The Fund may invest up to 25% of its Managed Assets in municipal securities in any one industry or in any one state of origin.
No Preferred Shares. Unless otherwise
approved by shareholders, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Fund may borrow for temporary, emergency or certain other purposes as permitted by the
Investment Company Act of 1940, as amended, and invest in certain instruments, including inverse floating rate securities, that have the economic effect of financial leverage. See “Risk Factors—Inverse Floating Rate Securities Risk.”
Adviser and
Sub-Adviser. Nuveen Fund Advisors, LLC, the Fund’s investment adviser, is responsible for determining the Fund’s overall investment strategies and their implementation. Nuveen
Asset Management, LLC is the Fund’s investment sub-adviser and oversees the day-to-day investment operations of the Fund.
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You should read this Prospectus, which contains important information
about the Fund, before deciding whether to invest and retain it for future reference. A Statement of Additional Information, dated [ ], 2023 (the “SAI”), containing additional information about the Fund has been
filed with the U.S. Securities and Exchange Commission (the “SEC”) and is incorporated by reference in its entirety into this Prospectus. You may request a free copy of the SAI, the table of contents of which is on the last page of this
Prospectus, annual and semi-annual reports to shareholders and other information about the Fund and make shareholder inquiries by calling (800) 257-8787, by writing to the Fund at 333 West Wacker Drive,
Chicago, Illinois 60606 or from the Fund’s website (http://www.nuveen.com). The information contained in, or that can be accessed through, the Fund’s website is not part of this Prospectus, except to the extent specifically incorporated by
reference herein. You also may obtain a copy of the SAI (and other information regarding the Fund) from the SEC’s web site (http://www.sec.gov).
The date of this Prospectus is [—], 2023.
The shares of Common Stock 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 governmental agency.
Neither the SEC 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.
TABLE OF CONTENTS
You should rely only on the information contained or incorporated by reference into this Prospectus. The Fund has not authorized anyone to provide you with
different information. The Fund is not making an offer of these securities in any state where the offer 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. The Fund will update this Prospectus to reflect any material changes to the disclosures herein.
FORWARD-LOOKING STATEMENTS
Any projections, forecasts and estimates contained or incorporated by
reference herein are forward looking statements and are based upon certain assumptions. Projections, forecasts and estimates are necessarily speculative in nature, and it can be expected that some or all of the assumptions underlying any
projections, forecasts or estimates will not materialize or will vary significantly from actual results. Actual results may vary from any projections, forecasts and estimates and the variations may be material. Some important factors that could
cause actual results to differ materially from those in any forward looking statements include changes in interest rates, market, financial or legal uncertainties, including changes in tax law, and the timing and frequency of defaults on underlying
investments. Consequently, the inclusion of any projections, forecasts and estimates herein should not be regarded as a representation by the Fund or any of its affiliates or any other person or entity of the results that will actually be achieved
by the Fund. Neither the Fund nor its affiliates has any obligation to update or otherwise revise any projections, forecasts and estimates including any revisions to reflect changes in economic conditions or other circumstances arising after the
date hereof or to reflect the occurrence of unanticipated events, even if the underlying assumptions do not come to fruition. The Fund acknowledges that, notwithstanding the foregoing, the safe harbor for forward-looking statements under the Private
Securities Litigation Reform Act of 1995 does not apply to investment companies such as the Fund.
PROSPECTUS SUMMARY
This is only a summary. You should review the more detailed
information contained elsewhere in this Prospectus and in the Statement of Additional Information (the “SAI”).
| The Fund |
Nuveen Municipal Income Fund, Inc. (the “Fund”) is a diversified, closed-end management investment company. See “The Fund.” Shares of the Fund’s common stock, $0.01 par value
(“Common Stock”), are traded on the New York Stock Exchange (the “NYSE”) under the symbol “NMI”. |
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The closing price of shares of the Common Stock, as reported by the NYSE on September 14, 2023, was $9.08 per share of Common Stock. The net asset value (“NAV”) of the shares of Common Stock at the close
of business on that same date was $9.64 per share of Common Stock. As of August 31, 2023, the Fund had 10,051,095 shares of Common Stock outstanding and net assets of $97,550,495. See “Description of Shares.” |
| The Offering |
The Fund may offer, from time to time, in one or more offerings, up to 2 million shares of Common Stock on terms to be determined at the time of the offering. The Fund may offer and sell shares of Common Stock directly to one or more
purchasers, to or through underwriters, through dealers or agents that the Fund designates from time to time, or through a combination of these methods. In connection with any offering of Common Stock, the Fund will deliver a prospectus supplement
describing such offering, including, as applicable, the names of any underwriters, dealers or agents and information regarding any applicable purchase price, fee, commission or discount arrangements made with those underwriters, dealers or agents or
the basis upon which such amount may be calculated. The minimum price on any day at which shares of Common Stock may be sold will not be less than the NAV per share of Common Stock at the time of the offering plus the per share amount of any
underwriting commission or discount. For more information about the manners in which the Fund may offer shares of Common Stock, see “Plan of Distribution.” |
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The Fund may not sell any shares of Common Stock through agents, underwriters or dealers without delivery of a prospectus supplement describing the method and terms of the particular offering of Common Stock. You should
read this Prospectus and the applicable prospectus supplement carefully before you invest in our Common Stock. |
| Investment Objective and Policies |
The Fund’s investment objective is a high level of current income exempt from federal income tax, which the Fund seeks to achieve by investing primarily in a diversified portfolio of tax-exempt
municipal obligations. The Fund cannot assure you that it will achieve its investment objective. The Fund’s investment objective and any investment policies identified as fundamental policies may not be changed without shareholder approval.
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As a fundamental investment policy, under normal circumstances, the Fund will invest at least 80% of its Assets (as defined below) in municipal securities and other related investments, the income from which is exempt
from regular federal income taxes. |
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Under normal market conditions, the Fund will generally maintain an investment portfolio with an overall weighted average maturity of greater than 10 years. As of August 31, 2023, the effective maturity of the
Fund’s portfolio was 19.60 years. |
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“Assets” mean the net assets of the Fund plus the amount of any borrowings for investment purposes. “Managed Assets” means the total assets of the Fund, minus the sum of its accrued liabilities
(other than Fund liabilities incurred for the express purpose of creating leverage). Total assets for this purpose shall include assets attributable to the Fund’s use of leverage (whether or not those assets are reflected in the Fund’s
financial statements for purposes of generally accepted accounting principles), and derivatives will be valued at their market value. |
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Under normal circumstances: |
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The Fund may invest up to 20% of its Managed Assets in municipal securities that pay interest that is taxable under the federal alternative minimum tax applicable to non-corporate
taxpayers (“AMT Bonds”). |
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The Fund will invest at least 80% of its Managed Assets in investment grade quality municipal securities that, at the time of investment, are rated within the four highest grades (Baa or BBB or better) by at least one
nationally recognized statistical rating organization (“NRSRO”) that rates such securities, or if it is unrated but judged to of comparable quality by the Fund’s investment sub-adviser, Nuveen
Asset Management, LLC (“Nuveen Asset Management”). A security is considered investment grade if it is rated within the four highest letter grades by at least one NRSRO that rates such securities (even if rated lower by another), or if it
is unrated but judged to be of comparable quality by Nuveen Asset Management (such securities are commonly referred to as split-rated securities). |
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The Fund may invest up to 20% of its Managed Assets in municipal securities that, at the time of investment, are
rated below investment grade (Ba or BB or lower) by all NRSROs that rate such securities or are unrated but judged to be of comparable quality by Nuveen Asset Management. No more than 10% of the Fund’s Managed Assets may be invested in
municipal securities rated below B3/B- by all NRSROs that rate the security or that are unrated but judged to be of comparable quality by Nuveen Asset Management. Municipal securities of below investment grade
quality are regarded as |
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having predominantly speculative characteristics with respect to capacity to pay interest and repay principal and are commonly referred to as junk bonds. |
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The Fund may invest in distressed securities. The Fund may not invest in the securities of an issuer which, at the time of investment, is in default on its obligations to pay principal or interest thereon when due or
that is involved in a bankruptcy proceeding (i.e., rated below C- at the time of investment); provided, however, that Nuveen Asset Management may determine that it is in the best interest of
shareholders in pursuing a workout arrangement with issuers of defaulted securities to make loans to the defaulted issuer or another party, or purchase a debt, equity or other interest from the defaulted issuer or another party, or take other
related or similar steps involving the investment of additional monies, but only if that issuer’s securities are already held by the Fund. |
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The Fund will not invest more than 25% of its total assets in municipal securities in any one industry or in any one state of origin. |
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The Fund may invest up to 15% of its Managed Assets in inverse floating rate securities. |
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The Fund may not enter into a futures contract or related options or forward contracts if more than 30% of the Fund’s Managed Assets would be represented by futures contracts or more than 5% of the Fund’s
Managed Assets would be committed to initial margin deposits and premiums on futures contracts or related options. |
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As a fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Fund may borrow for temporary, emergency or certain other
purposes as permitted by the Investment Company Act of 1940 (the “1940 Act”) and invest in certain instruments, including inverse floating rate securities, that have the economic effect of financial leverage. The amount of leverage will
vary depending on market conditions. |
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During temporary defensive periods (e.g., times when, in the Fund’s investment adviser’s and/or the
Fund’s sub-adviser’s opinion, temporary imbalances of supply and demand or other temporary dislocations in the tax-exempt bond market adversely affect the
price at which long-term or intermediate-term municipal securities are available), and in order to keep the Fund’s cash fully invested, including during the period when the net proceeds of the offering of Common Stock are being invested, the
Fund may deviate from its investment policies and objective. During such periods, the Fund may invest up to 100% of its Managed Assets in short-term investments including high quality, short-term debt securities that may be either
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tax-exempt or taxable. The Fund may not achieve its investment objectives during such periods. |
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The Fund intends to invest in taxable short-term investments only in the event that suitable tax-exempt short-term investments are not available at reasonable prices and yields.
Investment in taxable short-term investments would result in a portion of your dividends being subject to regular federal income tax, and if the proportion of taxable investments exceeded 50% of the Fund’s total assets as of the close of any
quarter of the Fund’s taxable year, the Fund would not satisfy the general eligibility test that would permit it to pay exempt-interest dividends for that taxable year. Such transactions will be used solely to reduce risk. There can be no
assurance that such strategies will be successful. For a more complete discussion of the Fund’s portfolio composition and its corresponding risks, see “The Fund’s Investments” and “Risk Factors.” |
| Investment Adviser |
Nuveen Fund Advisors, LLC (“Nuveen Fund Advisors”), the Fund’s investment adviser, is responsible for overseeing the Fund’s overall investment strategy and its implementation. Nuveen Fund Advisors offers advisory and
investment management services to a broad range of investment company clients. Nuveen Fund Advisors has overall responsibility for management of the Fund, oversees the management of the Fund’s portfolio, manages the Fund’s business
affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois 60606. Nuveen Fund Advisors is an indirect subsidiary of Nuveen, LLC
(“Nuveen”), the investment management arm of Teachers Insurance and Annuity Association of America (“TIAA”). TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching and is the
companion organization of College Retirement Equities Fund. As of June 30, 2023, Nuveen managed approximately $1.2 trillion in assets, of which approximately $140.9 billion was managed by Nuveen Fund Advisors. |
| Sub-Adviser |
Nuveen Asset Management, LLC serves as the Fund’s sub-adviser. Nuveen Asset Management, a registered investment adviser, is a wholly-owned subsidiary of Nuveen Fund Advisors. Nuveen Asset Management
oversees the day-to-day investment operations of the Fund. |
| Use of Leverage |
As a fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred shares or debt instruments. However, the Fund may (i) borrow for temporary, emergency or other purposes and
(ii) invest in certain instruments, including inverse floating rate securities, that have the economic effect of financial leverage. The Fund may invest up to 15% of its Managed Assets in inverse floating rate securities. As of August 31,
2023, the Fund’s total effective leverage was approximately 0.00% of its Managed Assets. |
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As of August 31, 2023, the Fund was not invested in inverse floating rate securities. An investment in inverse floating rate securities involves special risks. See “Risk Factors—Inverse Floating Rate
Securities.” |
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The Fund, along with certain other funds managed by Nuveen Fund Advisors (the “Participating Funds”), also established a 364-day, approximately $2.7 billion standby
credit facility with a group of lenders, under which the Participating Funds may borrow for various purposes other than leveraging for investment purposes. A large portion of this facility’s capacity is currently dedicated for use by a small
number of Participating Funds, which does not include the Fund. The remaining capacity under the facility (and the corresponding portion of the facility’s annual costs) is separately dedicated to most of the other
open-end funds in the Nuveen fund family, along with a number of Nuveen closed-end funds, including the Fund. The credit facility expires in June 2024 unless extended or
renewed. |
| Distributions |
The Fund pays regular monthly distributions to Common Stockholders at a level rate (stated in terms of a fixed cents per share of Common Stock dividend rate) based on the projected performance of the Fund. The Fund’s ability to maintain a
level share of Common Stock dividend rate will depend on a number of factors. As portfolio and market conditions change, the rate of dividends on the shares of Common Stock and the Fund’s dividend policy could change. |
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For each taxable year, the Fund will distribute all or substantially all of its net investment income (including any ordinary taxable income) and net capital gain (which is the excess of net long-term capital gain over
net short-term capital loss) to Common Stockholders so long as the net investment income and net capital gain are not necessary to pay any interest and required principal payments on borrowings. While not currently anticipated, if the Fund makes
total distributions for a taxable year in an amount that exceeds the Fund’s earnings and profits, the excess would generally be treated by Common Stockholders as a return of capital for tax purposes. A return of capital reduces a
shareholder’s tax basis, which could result in higher taxes when the shareholder sells his or her shares because it may result in a larger gain or a smaller loss on the sale. In the event of a distribution of
paid-in capital, shareholders will be receiving their own capital back, net of the Fund’s fees and expenses. You may elect to reinvest automatically some or all of your distributions in additional shares
of Common Stock under the Fund’s Dividend Reinvestment Plan. |
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The Fund might not distribute all or a portion of any net capital gain for a taxable year. If the Fund does not distribute all
of its net capital gain for a taxable year, it will pay federal income tax on the retained gain. Provided that the Fund satisfies certain requirements, each Common Stockholder of record as of the end of the Fund’s taxable year (i) will
include in income for federal income tax purposes, as |
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long-term capital gain, his or her share of the retained gain, (ii) will be deemed to have paid his or her proportionate share of the tax paid by the Fund on such retained gain, and
(iii) may be entitled to an income tax credit or refund for that share of the tax. The Fund will treat the retained capital gain amount as a substitute for equivalent cash distributions. See “Distributions” and “Dividend
Reinvestment Plan.” |
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The Fund reserves the right to change its distribution policy and the basis for establishing the rate of its monthly distributions at any time, subject to a finding by the Fund’s Board of Trustees (the
“Board”) that such change is in the best interests of the Fund and its Common Stockholders. |
| Custodian and Transfer Agent |
State Street Bank and Trust Company serves as the Fund’s custodian, and Computershare Inc. and Computershare Trust Company, N.A. serves as the Fund’s transfer agent. See “Custodian and Transfer Agent.” |
| Risk Factors |
Investment in the Fund involves risk. The Fund is designed as a long-term investment and not as a trading vehicle. The Fund is not intended to be a complete investment program. See “Risk Factors” in this Prospectus and, if applicable,
the prospectus supplement for a discussion of the principal risks you should consider before making an investment in the Fund. The specific risks applicable to a particular offering of Common Stock will be set forth in the related prospectus
supplement. |
| Use of Proceeds |
Unless otherwise specified in a prospectus supplement, the Fund will use the net proceeds from any sales of Common Stock, pursuant to this Prospectus, to make investments in accordance with the Fund’s investment objective. See “Use of
Proceeds.” |
| Federal Income Tax |
The Fund has elected to be treated, and intends to qualify each year, as a regulated investment company (“RIC”) under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”). To qualify for the favorable U.S. federal income tax treatment generally accorded to a RIC under Subchapter M of the Code the Fund must, among other requirements, derive in each
taxable year at least 90% of its gross income from certain prescribed sources and satisfy a diversification test on a quarterly basis. If the Fund fails to satisfy the qualifying income or diversification requirements in any taxable year, the Fund
may be eligible for relief provisions if the failures are due to reasonable cause and not willful neglect and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain
de minimis failures of the diversification requirements where the Fund corrects the failure within a specified period. In order to be eligible for the relief provisions with respect to a failure to meet the diversification requirements, the
Fund may be required to dispose of certain assets. If these relief provisions were not available to the Fund and it were to fail to qualify for treatment as a RIC for a taxable year, all of its
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taxable income (including its net capital gain) would be subject to tax at the 21% regular corporate rate without any deduction for distributions to shareholders, and such distributions would be
taxable as ordinary dividends to the extent of the Fund’s current and accumulated earnings and profits. To qualify to pay exempt-interest dividends, which are treated as items of interest excludable from gross income for federal income tax
purposes, at least 50% of the value of the total assets of the Fund must consist of obligations exempt from regular income tax as of the close of each quarter of the Fund’s taxable year. If the proportion of taxable investments held by the Fund
exceeds 50% of the Fund’s total assets as of the close of any quarter of any Fund taxable year, the Fund will not for that taxable year satisfy the general eligibility test that otherwise permits it to pay exempt-interest dividends.
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The value of the Fund’s investments and its NAV may be adversely affected by changes in tax rates and policies. Because interest income from municipal securities is normally not subject to regular federal income
taxation, the attractiveness of municipal securities in relation to other investment alternatives is affected by changes in federal income tax rates or changes in the tax-exempt status of interest income from
municipal securities. Any proposed or actual changes in such rates or exempt status, therefore, can significantly affect the demand for and supply, liquidity and marketability of municipal securities. This could in turn affect the Fund’s NAV
and ability to acquire and dispose of municipal securities at desirable yield and price levels. Additionally, the Fund may not be a suitable investment for individual retirement accounts, for other tax-exempt
or tax-deferred accounts or for investors who are not sensitive to the federal income tax consequences of their investments. |
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See “Risk Factors—Portfolio Level Risks—Tax Risk”, “Risk Factors—Portfolio Level Risks—Taxability Risk” and “Tax Matters.” |
| Special Tax Considerations |
The Fund may invest up to 20% of its Managed Assets in AMT Bonds. If you are, or as a result of investment in the Fund would become, subject to the federal alternative minimum tax, the Fund may not be a suitable investment for you. In addition,
distributions of ordinary taxable income (including any net short-term capital gain) will be taxable to shareholders as ordinary income (and not eligible for favorable taxation as “qualified dividend income”), and capital gain dividends
will be taxable as long-term capital gains. See “Tax Matters.” |
| Voting Rights |
All shares of Common Stock have equal non-cumulative voting rights. |
| Governing Law |
The Fund’s Articles of Incorporation (the “Articles”) are governed by the laws of the State of Minnesota. |
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SUMMARY OF FUND EXPENSES
The Fund’s fee table and related expense examples are incorporated
herein by reference to the Fund’s Annual Report for the fiscal year ended October 31, 2022 (File No.
811-05488), as filed with the SEC on Form N-CSR on January 9, 2023.
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FINANCIAL HIGHLIGHTS
The Fund’s financial highlights for the fiscal years ended
October 31, 2022, October 31, 2021, October 31, 2020, October 31, 2019, and October
31, 2018, are incorporated by reference from the Fund’s Annual Report for the fiscal year ended October 31,
2022 (File No. 811-05488), as filed with the SEC on Form N-CSR on January 9, 2023. The financial highlights for each of these fiscal years have been
derived from financial statements audited by KPMG LLP, the Fund’s independent registered public accounting firm, for the last five fiscal years. The Fund’s financial highlights for the fiscal years ended October 31, 2017,
October 31, 2016, October 31, 2015, October 31, 2014, and October
31, 2013, are incorporated by reference from the Fund’s Annual Report for the fiscal year ended October 31, 2017 (File No. 811-05488), as filed with the SEC on Form N-CSR on January 8, 2018. The information with respect to the six months ended April 30, 2023 is unaudited and
incorporated by reference from the Fund’s 2023 Semi-Annual Report (File
No. 811-05488), as filed with the SEC on Form N-CSR on July 6, 2023.
TRADING AND NET ASSET VALUE INFORMATION
The following information for each full quarterly period within the two
most recent fiscal years and each full fiscal quarter since the beginning of the current fiscal year is incorporated herein by reference to the Fund’s Annual
Report for the fiscal year ended October 31, 2022 (File No. 811-05488), as filed with the SEC on Form N-CSR on January 9, 2023: (i)
the high and low sales prices for shares of Common Stock reported as of the end of the day on the NYSE, (ii) the high and low net asset values of shares of Common Stock, and (iii)
the high and low of the premium/(discount) to net asset value (expressed as a percentage) of shares of Common Stock.
The net asset value per share of Common Stock, the market price, and percentage of premium/(discount) to net asset value per share of Common
Stock on September 14, 2023 was $9.64, $9.08 and (5.81)%, respectively. As of August 31, 2023, the Fund had 10,051,095 shares of Common Stock outstanding and net assets of $97,550,495.
THE FUND
The Fund is a diversified,
closed-end management investment company registered under the 1940 Act. The Fund was incorporated on February 26, 1988, pursuant to the Articles, and is governed by the laws of the State of Minnesota. The
Fund’s Common Stock is listed on the NYSE under the symbol “NMI.”
The following provides information about the Fund’s outstanding shares of Common Stock as of August 31, 2023:
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| Title of Class
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Amount
Authorized
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Amount Held
by the Fund or
for its Account
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Amount
Outstanding
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| Common Stock |
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200,000,000 |
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0 |
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10,051,095 |
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USE OF
PROCEEDS
The net proceeds from the issuance of shares of
Common Stock will be invested in accordance with the Fund’s investment objective and policies as stated below. Pending investment, the timing of which may vary depending on the size of the investment but in no case is expected to exceed 30
days, it is anticipated that the proceeds will be invested in short-term or long-term securities issued by the U.S. Government or its agencies or instrumentalities or in high-quality, short-term money market instruments. See “Use of
Leverage.”
9
THE FUND’S INVESTMENTS
Investment Objective
The Fund’s investment objective is a high level of current income
exempt from federal income tax, which the Fund seeks to achieve by investing primarily in a diversified portfolio of tax-exempt municipal obligations.
Investment Policies
Under normal circumstances and as a fundamental policy, the Fund will
invest at least 80% of its Assets (as defined below) in municipal securities and other related investments, the income from which is exempt from regular federal income taxes. The Fund will consider its investment in underlying investment companies
when determining its compliance with this policy.
Under normal
market conditions, the Fund will generally maintain an investment portfolio with an overall weighted average maturity of greater than 10 years.
“Assets” mean the net assets of the Fund plus the amount of any borrowings for investment purposes. “Managed Assets” means
the total assets of the Fund, minus the sum of its accrued liabilities (other than Fund liabilities incurred for the express purpose of creating leverage). Total assets for this purpose shall include assets attributable to the Fund’s use of
leverage (whether or not those assets are reflected in the Fund’s financial statements for purposes of generally accepted accounting principles), and derivatives will be valued at their market value.
The Fund may invest in various municipal securities, including
municipal bonds and notes, other securities issued to finance and refinance public projects, and other related securities and derivative instruments creating exposure to municipal bonds, notes and securities that provide for the payment of interest
income that is exempt from regular federal income tax. Municipal securities are often issued by state and local governmental entities to finance or refinance public projects, such as roads, schools, and water supply systems. Municipal securities
also may be issued on behalf of private entities or for private activities, such as housing, medical and educational facility construction, or for privately owned transportation, electric utility and pollution control projects. Municipal securities
may be issued on a long-term basis to provide long-term financing. The repayment of such debt may be secured generally by a pledge of the full faith and credit taxing power of the issuer, a limited or special tax, or any other revenue source,
including project revenues, which may include tolls, fees and other user charges, lease payments, and mortgage payments. Municipal securities also may be issued to finance projects on a short-term interim basis, anticipating repayment with the
proceeds of the later issuance of long-term debt. The Fund may purchase municipal securities in the form of bonds, notes, leases or certificates of participation; structured as callable or non-callable; with
payment forms that include fixed coupon, variable rate, zero coupon, capital appreciation bonds, tender option bonds, and inverse floating rate securities; or acquired through investments in pooled vehicles, partnerships, or other investment
companies.
Under normal circumstances:
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The Fund may invest up to 20% of its Managed Assets in AMT Bonds. |
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The Fund will invest at least 80% of its Managed Assets in investment grade quality municipal securities that, at the time of investment, are rated within the four highest letter grades (Baa or BBB or better) by at
least one NRSRO that rates such securities or if it is unrated judged to be of comparable quality by Nuveen Asset Management. A security is considered investment grade if it is rated within the four highest letter grades by at least one NRSRO that
rate such securities (even if rated lower by another), or if it is unrated but judged to be of comparable quality by Nuveen Asset Management (such securities are commonly referred to as split-rated securities). The relative percentages of the value
of the investments attributable to investment grade municipal securities and to below investment grade municipal securities could change over time as a result of rebalancing the Fund’s assets by Nuveen Asset Management, market value
fluctuations, issuance of additional shares and other events. |
10
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The Fund may invest up to 20% of its Managed Assets in municipal securities that, at the time of investment, are rated below investment grade (Ba or BB or lower) by all NRSROs or are unrated but judged to be of
comparable quality by Nuveen Asset Management. No more than 10% of the Fund’s Managed Assets may be invested in municipal securities rated below B3/B- by all NRSROs that rate the security or that are
unrated but judged to be of comparable quality by Nuveen Asset Management. Municipal securities of below investment grade quality are regarded as having predominantly speculative characteristics with respect to capacity to pay interest and repay
principal, and are commonly referred to as junk bonds. |
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The Fund may invest in distressed securities. The Fund may not invest in the securities of an issuer which, at the time of investment, is in default on its obligations to pay principal or interest thereon when due or
that is involved in a bankruptcy proceeding (i.e., rated below C-, at the time of investment); provided, however, that Nuveen Asset Management may determine that it is in the best interest of
shareholders in pursuing a workout arrangement with issuers of defaulted securities to make loans to the defaulted issuer or another party, or purchase a debt, equity or other interest from the defaulted issuer or another party, or take other
related or similar steps involving the investment of additional monies, but only if that issuer’s securities are already held by the Fund. |
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The Fund may invest up to 25% of its Managed Assets in municipal securities in any one industry or in any one state of origin. |
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• |
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The Fund may invest up to 15% of its Managed Assets in inverse floating rate securities, in order to more efficiently achieve its desired overall portfolio structure as well as enhance its ability to achieve its
investment objective. |
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The Fund may not enter into a futures contract or related options or forward contracts if more than 30% of the Fund’s Managed Assets would be represented by futures contracts or more than 5% of the Fund’s
Managed Assets would be committed to initial margin deposits and premiums on futures contracts or related options. |
The foregoing policies apply only at the time of any new investment.
The credit quality policies noted above apply only at the time a
security is purchased, and the Fund is not required to dispose of a security in the event that a rating agency downgrades its assessment of the credit characteristics of a particular issue, even if such downgrade causes the portfolio to fall below
the 80% threshold. If at any time the Fund falls below the 80% threshold, the Fund’s future investments will be made in a manner that will bring the Fund’s portfolio back into compliance with this policy. In determining whether to retain
or sell such a security, Nuveen Asset Management may consider such factors as Nuveen Asset Management’s assessment of the credit quality of the issuer of such security, the price at which such security could be sold and the rating, if any,
assigned to such security by other rating agencies. A general description of the ratings of S&P Global Ratings, a Division of S&P Global Inc. (“S&P”), Moody’s Investors Services, Inc. (“Moody’s”) or Fitch
Ratings, Inc. (“Fitch”) of municipal securities is set forth in Appendix A to the SAI.
The Fund may purchase municipal securities that are additionally secured by insurance, bank credit agreements or escrow accounts. The credit
quality of companies that provide such credit enhancements will affect the value of those securities. Although the insurance feature is designed to reduce certain financial risks, the premiums for insurance and the higher market price paid for
insured obligations may reduce the Fund’s income. The Fund may use any insurer, regardless of its rating. A municipal security typically will be deemed to have the rating of its insurer. However, in the event an insurer has a credit rating
below the rating of an underlying municipal security or is perceived by the market to have such a lower rating, the municipal security rating would be the more relevant rating and the value of the municipal security would more closely, if not
entirely, reflect such rating. As a result, the value of insurance associated with a municipal security may decline and may not add any value. The insurance feature does not guarantee the full payment of principal and interest of an insured
obligation, the market value of the insured obligation or the net asset value of the Common Stock represented by such insured obligation.
11
The Fund also may invest in certain derivative instruments in pursuit of its investment
objective. Such instruments include financial futures contracts, swap contracts (including interest rate and credit default swaps), options on financial futures, options on swap contracts, or other derivative instruments. Nuveen Asset Management may
use derivative instruments to seek to enhance return, to hedge some of the risk of the Fund’s investments in municipal securities or as a substitute for a position in the underlying asset. These types of hedging strategies may generate taxable
income. With respect to the Fund’s policy to invest at least 80% of its Managed Assets (plus any borrowings for investment purposes) in municipal securities and other related investments, the income from which is exempt from regular federal
income tax, for purposes of calculating Managed Assets, the Fund will value eligible derivatives at market value or fair value instead of notional value. See “The Fund’s Investments—Municipal Securities Derivatives.”
The Fund may invest in municipal securities and other instruments that,
at the time of investment, are illiquid (i.e., securities that are not readily marketable), including, but not limited to, restricted securities (securities the disposition of which is restricted under the federal securities laws), securities
that may be resold only pursuant to Rule 144A under the 1933 Act, and repurchase agreements with maturities in excess of seven days. See “Risk Factors—Illiquid Securities Risk.”
The Fund may purchase and sell MMD Rate Locks. An MMD Rate Lock permits
the Fund to lock in a specified municipal interest rate for a portion of its portfolio to preserve a return on a particular investment or a portion of its portfolio as a duration management technique or to protect against any increase in the price
of securities to be purchased at a later date. By using an MMD Rate Lock, the Fund can create a synthetic long or short position, allowing the Fund to select what the manager believes is an attractive part of the yield curve. The Fund will
ordinarily use these transactions as a hedge or for duration or risk management although it is permitted to enter into them to enhance income or gain or to increase the Fund’s yield, for example, during periods of steep interest rate yield
curves (i.e., wide differences between short term and long term interest rates).
The Fund may also invest in securities of other open- or closed-end investment companies (including
ETFs) that invest primarily in municipal securities of the types in which the Fund may invest directly, to the extent permitted by the 1940 Act, the rules and regulations issued thereunder and applicable exemptive orders issued by the SEC.
Temporary Defensive Periods
During temporary defensive periods or in order to keep the Fund’s
cash fully invested, including during the period when the net proceeds of the offering of Common Stock are being invested, the Fund may deviate from its investment policies and objective. During such periods, the Fund may invest up to 100% of its
Managed Assets in short-term investments, including high quality, short-term securities that may be either tax-exempt or taxable. The Fund intends to invest in taxable short-term investments only in the event
that suitable tax-exempt short-term investments are not available at reasonable prices and yields. Investment in taxable short-term investments would result in a portion of your dividends being subject to
regular federal income tax, and if the proportion of taxable investments exceeded 50% of the Fund’s total assets as of the close of any quarter of the Fund’s taxable year, the Fund would not satisfy the general eligibility test that would
permit it to pay exempt-interest dividends for that taxable year. Such transactions will be used solely to reduce risk. There can be no assurance that such strategies will be successful. For more information, see the SAI under “Tax
Matters.”
Use of Leverage
As a fundamental policy, the Fund will not leverage its capital
structure by issuing senior securities such as preferred shares or debt instruments. However, the Fund may borrow for temporary, emergency or certain other purposes as permitted by the 1940 Act and invest in certain instruments, including inverse
floating rate securities, that have the economic effect of financial leverage.
12
Fundamental Policies
The Board of Trustees of the Fund may change the policies described above without a shareholder vote. However, with respect to the Fund’s
policy of investing at least 80% of its Assets in municipal securities and other related investments, the income from which is exempt from regular federal income taxes, such policy may not be changed without 60 days’ prior written notice and
the approval of the holders of a majority of the outstanding common shares and preferred shares voting together as a single class, and the approval of the holders of a majority of the outstanding preferred shares, voting separately as a single
class.
The Fund cannot change its investment objective or
fundamental policies without the approval of the holders of a “majority of the outstanding” shares of Common Stock. For this purpose a “majority of the outstanding” shares means (i) 67% or more of the shares present at a
meeting, if the holders of more than 50% of the shares are present or represented by proxy or (ii) more than 50% of the shares, whichever is less. All of the Fund’s other investment policies are not considered to be fundamental by the Fund
and can be changed by the Fund’s Board without a vote of Common Stockholders.
As discussed in greater detail under “Investment Restrictions” in the SAI, except as described below, the Fund, as a fundamental
policy, may not, without the approval of the holders of a majority of the outstanding Common Stock:
(1) Issue senior securities, as defined in the 1940 Act, except to the extent such issuance might be involved with respect to
borrowings described under subparagraph (2) below or with respect to transactions involving futures contracts or the writing of options within the limits described herein;1
(2) Borrow money, except from banks for temporary or
emergency purposes or for repurchase of its shares, and then only in an amount not exceeding one-third of the value of the Fund’s total assets including the amount borrowed. While any such borrowings
exceed 5% of the Fund’s total assets, no additional purchases of investment securities will be made;1, 2
(3) Underwrite any issue of securities, except to the
extent that the purchase of municipal securities in accordance with its investment objective, policies and limitations may be deemed to be an underwriting;
(4) Invest more than 25% of its total assets in securities of issuers in any one industry; provided, however, that such
limitations shall not be applicable to municipal securities issued by governments or political subdivisions of governments, and obligations issued or guaranteed by the United States government, its agencies or instrumentalities;3
(5) Purchase or sell real estate, but this shall not prevent the Fund from investing in municipal securities secured by real
estate or interests therein;
(6) Purchase or sell
physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the Fund from purchasing or selling options, futures contracts or derivative instruments or from investing in securities or
other instruments backed by physical commodities);
1 Section 18(c) of the 1940 Act generally limits a registered
closed-end investment company to issuing one class of senior securities representing indebtedness and one class of senior securities representing stock, except that the class of indebtedness or stock may be
issued in one or more series, and promissory notes or other evidences of indebtedness issued in consideration of any loan, extension, or renewal thereof, made by a bank or other person and privately arranged, and not intended to be publicly
distributed, are not deemed a separate class of senior securities.
2 Section 18(a) of the 1940 Act generally prohibits a registered closed-end fund from incurring borrowings if, immediately thereafter, the aggregate amount
of its borrowings exceeds 331/3% of its total assets. The Fund has not applied for, and currently does not intend to apply for, any
exemptive relief that would allow it to borrow outside of the limits of the 1940 Act.
3 For purposes
of this restriction, governments and their political subdivisions are not members of any industry.
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(7) Make loans, except as permitted by the 1940 Act and exemptive orders granted
under the 1940 Act;4
(8) Invest more than 5% of its total assets in securities of any one issuer, except that this limitation shall not apply to
securities of the United States government, its agencies and instrumentalities or to the investment of 25% of its total assets;
(9) Pledge, mortgage or hypothecate its assets, except that, to secure borrowings permitted by subparagraph (2) above, it
may pledge securities having a market value at the time of pledge not exceeding 20% of the value of the Fund’s total assets;
(10) Invest more than 10% of its total assets in repurchase agreements maturing in more than seven days; and
(11) Purchase or retain the securities of any issuer
other than the securities of the Fund if, to the Fund’s knowledge, those directors of the Fund, or those officers and directors of Nuveen Asset Management, LLC (“Nuveen Asset Management”), who individually own beneficially more than 1/2 of 1% of the outstanding securities of such issuer, together own beneficially more than 5% of such outstanding securities.
Portfolio Composition and Other Information
The Fund’s portfolio will be composed principally of the following
investments.
Municipal Securities
General. The Fund may invest in various
municipal securities, including municipal bonds and notes, other securities issued to finance and refinance public projects, and other related securities and derivative instruments creating exposure to municipal bonds, notes and securities that
provide for the payment of interest income that is exempt from regular federal income tax (as previously defined, “municipal securities”). Municipal securities are often issued by state and local governmental entities to finance or
refinance public projects such as roads, schools, and water supply systems. Municipal securities may also be issued on behalf of private entities or for private activities, such as housing, medical and educational facility construction, or for
privately owned transportation, electric utility and pollution control projects. Municipal securities may be issued on a long-term basis to provide permanent financing. The repayment of such debt may be secured generally by a pledge of the full
faith and credit taxing power of the issuer, a limited or special tax, or any other revenue source, including project revenues, which may include tolls, fees and other user charges, lease payments and mortgage payments. Municipal securities may also
be issued to finance projects on a short-term interim basis, anticipating repayment with the proceeds of the later issuance of long-term debt. The Fund may purchase municipal securities in the form of bonds, notes, leases or certificates of
participation; structured as callable or non-callable; with payment forms including fixed coupon, variable rate, zero coupon, capital appreciation bonds, tender option bonds, and inverse floating rate
securities; or acquired through investments in pooled vehicles, partnerships or other investment companies. Inverse floating rate securities are securities that pay interest at rates that vary inversely with changes in prevailing short-term tax-exempt interest rates and represent a leveraged investment in an underlying municipal security, which could have the economic effect of financial leverage.
4 Section 21 of the 1940 Act makes it unlawful for a registered investment company, like the Fund, to
lend money or other property if (i) the investment company’s policies set forth in its registration statement do not permit such a loan or (ii) the borrower controls or is under common control with the investment company. The Fund has
not applied for, and currently does not intend to apply for, any exemptive relief that would allow it to make loans outside the limits of the 1940 Act.
14
Generally, municipal securities are either general obligation or revenue bonds and typically are
issued to finance public projects (such as roads or public buildings), to pay general operating expenses, or to refinance outstanding debt. General obligation bonds are backed by the full faith and credit, or taxing authority, of the issuer and may
be repaid from any revenue source. Revenue bonds may be repaid only from the revenues of a specific facility or source.
Municipal securities may also be issued on behalf of private entities or for private activities, such as housing, medical and educational
facility construction, or for privately owned industrial development and pollution control projects. However, the obligation to repay the principal and interest rests with the private entity involved, not with the public entity that issues the
bonds.
General obligation bonds are backed by the full faith and
credit, or taxing authority, of the issuer and may be repaid from any revenue source; revenue bonds may be repaid only from the revenues of a specific facility or source. The Fund may also purchase other types of municipal securities that represent
lease obligations, municipal notes, pre-refunded municipal securities, private activity bonds, tender option bonds and other related securities and derivative instruments that create exposure to municipal
bonds, notes and securities and that provide for the payment of interest income that is exempt from regular federal income tax.
The municipal securities in which the Fund invests are generally issued by states, cities and local authorities and certain possessions and
territories of the United States (such as Puerto Rico and Guam), and pay interest that, in the opinion of bond counsel to the issuer (or on the basis of other authority believed by Nuveen Asset Management to be reliable), is exempt from regular
federal income tax, although the interest may be subject to the federal alternative minimum tax.
The yields on municipal securities depend on a variety of factors, including prevailing interest rates and the condition of the general money
market and the municipal bond market, the size of a particular offering, the maturity of the obligation and the rating of the issue. The market value of municipal securities will vary with changes in interest rate levels and as a result of changing
evaluations of the ability of their issuers to meet interest and principal payments.
A municipal security’s market value generally will depend upon its form, maturity, call features, and interest rate, as well as the credit
quality of the issuer, all such factors examined in the context of the municipal securities market and interest rate levels and trends.
Maturity and Duration. Under normal market conditions, the Fund will generally maintain an investment portfolio
with an overall weighted average maturity of greater than 10 years. As of August 31, 2023, the effective maturity of the Fund’s portfolio was 19.60 years. In comparison to maturity (which is the date on which a debt instrument ceases and
the issuer is obligated to repay the principal amount), duration is a measure of the price volatility of a debt instrument as a result of changes in market rates of interest, based on the weighted average timing of the instrument’s expected
principal and interest payments. Duration differs from maturity in that it considers a security’s yield, coupon payments, principal payments and call features in addition to the amount of time until the security finally matures. As the value of
a security changes over time, so will its duration. Prices of securities with longer durations tend to be more sensitive to interest rate changes than securities with shorter durations. In general, a portfolio of securities with a longer duration
can be expected to be more sensitive to interest rate changes than a portfolio with a shorter duration. For example, the price of a bond with an effective duration of two years will rise (fall) two percent for every one percent decrease (increase)
in its yield, and the price of a five-year duration bond will rise (fall) five percent for a one percent decrease (increase) in its yield. As of August 31, 2023, the average effective duration of the Fund’s portfolio was 8.64 years, which
includes the effects of leverage and takes into account the effect of option call provisions of the municipal securities in the Fund’s portfolio.
Municipal Leases and Certificates of Participation. The Fund also may purchase municipal securities that
represent lease obligations and certificates of participation in such leases. These carry special risks because the issuer of the securities may not be obligated to appropriate money annually to make payments under the lease. A
15
municipal lease is an obligation in the form of a lease or installment purchase which is issued by a state or local government to acquire equipment and facilities. Income from such obligations is
generally exempt from state and local taxes in the state of issuance. Leases and installment purchase or conditional sale contracts (which normally provide for title to the leased asset to pass eventually to the governmental issuer) have evolved as
a means for governmental issuers to acquire property and equipment without meeting the constitutional and statutory requirements for the issuance of debt. The debt issuance limitations are deemed to be inapplicable because of the inclusion in many
leases or contracts of “non-appropriation” clauses that relieve the governmental issuer of any obligation to make future payments under the lease or contract unless money is appropriated for such
purpose by the appropriate legislative body on a yearly or other periodic basis. In addition, such leases or contracts may be subject to the temporary abatement of payments in the event the issuer is prevented from maintaining occupancy of the
leased premises or utilizing the leased equipment or facilities. Although the obligations may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation
or foreclosure might prove difficult, time consuming and costly, and result in a delay in recovering, or the failure to recover fully, the Fund’s original investment. To the extent that the Fund invests in unrated municipal leases or
participates in such leases, the credit quality rating and risk of cancellation of such unrated leases will be monitored on an ongoing basis. In order to reduce this risk, the Fund will only purchase municipal securities representing lease
obligations where Nuveen Asset Management believes the issuer has a strong incentive to continue making appropriations until maturity.
A certificate of participation represents an undivided interest in an unmanaged pool of municipal leases, an installment purchase agreement or
other instruments. The certificates are typically issued by a municipal agency, a trust or other entity that has received an assignment of the payments to be made by the state or political subdivision under such leases or installment purchase
agreements. Such certificates provide the Fund with the right to a pro rata undivided interest in the underlying municipal securities. In addition, such participations generally provide the Fund with the right to demand payment, on not more than
seven days’ notice, of all or any part of the Fund’s participation interest in the underlying municipal securities, plus accrued interest.
Municipal Notes. Municipal securities in the form of notes generally are used to provide for short-term capital needs, in
anticipation of an issuer’s receipt of other revenues or financing, and typically have maturities of up to three years. Such instruments may include tax anticipation notes, revenue anticipation notes, bond anticipation notes, tax and revenue
anticipation notes and construction loan notes. Tax anticipation notes are issued to finance the working capital needs of governments. Generally, they are issued in anticipation of various tax revenues, such as income, sales, property, use and
business taxes, and are payable from these specific future taxes. Revenue anticipation notes are issued in expectation of receipt of other kinds of revenue, such as federal revenues available under federal revenue sharing programs. Bond anticipation
notes are issued to provide interim financing until long- term bond financing can be arranged. In most cases, the long-term bonds then provide the funds needed for repayment of the bond anticipation notes. Tax and revenue anticipation notes combine
the funding sources of both tax anticipation notes and revenue anticipation notes. Construction loan notes are sold to provide construction financing. Mortgage notes insured by the Federal Housing Authority secure these notes; however, the proceeds
from the insurance may be less than the economic equivalent of the payment of principal and interest on the mortgage note if there has been a default. The anticipated revenues from taxes, grants or bond financing generally secure the obligations of
an issuer of municipal notes. An investment in such instruments, however, presents a risk that the anticipated revenues will not be received or that such revenues will be insufficient to satisfy the issuer’s payment obligations under the notes
or that refinancing will be otherwise unavailable.
Pre-Refunded Municipal Securities. The principal of and interest on pre-refunded municipal securities are no longer paid from the original revenue source for the
securities. Instead, the source of such payments is typically an escrow fund consisting of U.S. government securities. The assets in the escrow fund are derived from the proceeds of refunding bonds issued by the same issuer as the pre-refunded municipal securities. Issuers of municipal securities use this advance refunding technique to obtain more favorable terms with respect to securities that are not yet subject to call or redemption by the
issuer. For example, advance refunding enables an
16
issuer to refinance debt at lower market interest rates, restructure debt to improve cash flow or eliminate restrictive covenants in the indenture or other governing instrument for the pre-refunded municipal securities. However, except for a change in the revenue source from which principal and interest payments are made, the pre-refunded municipal
securities remain outstanding on their original terms until they mature or are redeemed by the issuer.
Private Activity Bonds. Private activity bonds, formerly referred to as industrial development bonds, are issued by or on behalf
of public authorities to obtain funds to provide privately operated housing facilities, airport, mass transit or port facilities, sewage disposal, solid waste disposal or hazardous waste treatment or disposal facilities and certain local facilities
for water supply, gas or electricity. Other types of private activity bonds, the proceeds of which are used for the construction, equipment, repair or improvement of privately operated industrial or commercial facilities, may constitute municipal
securities, although the current federal tax laws place substantial limitations on the size of such issues. Under current law, a significant portion of the private activity bond market is subject to the alternative minimum tax applicable to non-corporate taxpayers. The Fund will only invest in private activity bonds that are not AMT Bonds. See “Tax Matters.”
Inverse Floating Rate Securities. The Fund may invest up to 15% of its Managed Assets in inverse floating rate securities. Inverse
floating rate securities (sometimes referred to as “inverse floaters”) are securities whose interest rates bear an inverse relationship to the interest rate on another security or the value of an index. Generally, inverse floating rate
securities represent beneficial interests in a special purpose trust formed by a third-party sponsor for the purpose of holding municipal bonds. The special purpose trust typically sells two classes of beneficial interests or securities: floating
rate securities (sometimes referred to as short-term floaters or tender option bonds) and inverse floating rate securities (sometimes referred to as inverse floaters). Both classes of beneficial interests are represented by certificates. The
short-term floating rate securities have first priority on the cash flow from the municipal bonds held by the special purpose trust. Typically, a third party, such as a bank, broker-dealer or other financial institution, grants the floating rate
security holders the option, at periodic intervals, to tender their securities to the institution and receive the face value thereof. As consideration for providing the option, the financial institution receives periodic fees. The holder of the
short-term floater effectively holds a demand obligation that bears interest at the prevailing short-term, tax-exempt rate. However, the institution granting the tender option will not be obligated to accept
tendered short-term floaters in the event of certain defaults or a significant downgrade in the credit rating assigned to the bond issuer. For its inverse floating rate investment, the Fund receives the residual cash flow from the special purpose
trust. Because the holder of the short-term floater is generally assured liquidity at the face value of the security, the Fund as the holder of the inverse floater assumes the interest rate cash flow risk and the market value risk associated with
the municipal security deposited into the special purpose trust. The volatility of the interest cash flow and the residual market value will vary with the degree to which the trust is leveraged. This is expressed in the ratio of the total face value
of the short-term floaters in relation to the value of the residual inverse floaters that are issued by the special purpose trust. In addition, all voting rights and decisions to be made with respect to any other rights relating to the municipal
bonds held in the special purpose trust are passed through to the Fund, as the holder of the residual inverse floating rate securities.
Because increases in the interest rate on the short-term floaters reduce the residual interest paid on inverse floaters, and because
fluctuations in the value of the municipal bond deposited in the special purpose trust affect the value of the inverse floater only, and not the value of the short-term floater issued by the trust, inverse floaters’ value is generally more
volatile than that of fixed rate bonds. The market price of inverse floating rate securities is generally more volatile than the underlying securities due to the leveraging effect of this ownership structure. These securities generally will
underperform the market of fixed rate bonds in a rising interest rate environment (i.e., when bond values are falling), but tend to outperform the market of fixed rate bonds when interest rates decline or remain relatively stable. Although
volatile, inverse floaters typically offer the potential for yields exceeding the yields available on fixed rate bonds with comparable credit quality, coupon, call provisions and maturity. Inverse floaters have varying degrees of liquidity based
upon the liquidity of the underlying securities deposited in a special purpose trust.
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The Fund may invest in inverse floating rate securities issued by special purpose trusts that
have recourse to the Fund. In Nuveen Asset Management’s discretion, the Fund may enter into a separate shortfall and forbearance agreement with the third party sponsor of a special purpose trust. The Fund may enter into such recourse agreements
(i) when the liquidity provider to the special purpose trust requires such an agreement because the level of leverage in the trust exceeds the level that the liquidity provider is willing to support absent such an agreement; and/or (ii) to
seek to prevent the liquidity provider from collapsing the trust in the event that the municipal obligation held in the trust has declined in value. Such an agreement would require the Fund to reimburse the third-party sponsor of such inverse
floater, upon termination of the trust issuing the inverse floater, the difference between the liquidation value of the bonds held in the trust and the principal amount due to the holders of floating rate interests. Such agreements may expose the
Fund to a risk of loss that exceeds its investment in the inverse floating rate securities. Absent a shortfall and forbearance agreement, the Fund would not be required to make such a reimbursement. If the Fund chooses not to enter into such an
agreement, the special purpose trust could be liquidated and the Fund could incur a loss.
The Fund may invest in both inverse floating rate securities and floating rate securities (as discussed below) issued by the same special
purpose trust.
Investments in inverse floating rate securities
create effective leverage. The use of leverage creates special risks for Common Stockholders. See “Risk Factors—Inverse Floating Rate Securities Risk/Leverage Risk.”
Floating Rate Securities. The Fund may also invest in
floating rate securities issued by special purpose trusts. Floating rate securities may take the form of short-term floating rate securities or the option period may be substantially longer. Generally, the interest rate earned will be based upon the
market rates for municipal securities with maturities or remarketing provisions that are comparable in duration to the periodic interval of the tender option, which may vary from weekly, to monthly, to extended periods of one year or multiple years.
Since the option feature has a shorter term than the final maturity or first call date of the underlying bond deposited in the trust, the Fund as the holder of the floating rate security relies upon the terms of the agreement with the financial
institution furnishing the option as well as the credit strength of that institution. As further assurance of liquidity, the terms of the trust provide for a liquidation of the municipal security deposited in the trust and the application of the
proceeds to pay off the floating rate security. The trusts that are organized to issue both short-term floating rate securities and inverse floaters generally include liquidation triggers to protect the investor in the floating rate security.
Special Taxing Districts. Special taxing districts are
organized to plan and finance infrastructure developments to induce residential, commercial and industrial growth and redevelopment. The bond financing methods such as tax increment finance, tax assessment, special services district and Mello-Roos
bonds, are generally payable solely from taxes or other revenues attributable to the specific projects financed by the bonds without recourse to the credit or taxing power of related or overlapping municipalities. They often are exposed to real
estate development-related risks and can have more taxpayer concentration risk than general tax-supported bonds, such as general obligation bonds. Further, the fees, special taxes, or tax allocations and other
revenues that are established to secure such financings are generally limited as to the rate or amount that may be levied or assessed and are not subject to increase pursuant to rate covenants or municipal or corporate guarantees. The bonds could
default if development failed to progress as anticipated or if larger taxpayers failed to pay the assessments, fees and taxes as provided in the financing plans of the districts.
Tobacco Settlement Bonds. The Fund may invest in
“tobacco settlement bonds.” Tobacco settlement bonds are municipal securities that are secured or payable solely from the collateralization of the proceeds from class action or other litigation against the tobacco industry.
When-Issued and Delayed Delivery Transactions
The Fund may buy and sell municipal securities on a when-issued or
delayed delivery basis, making payment or taking delivery at a later date, normally within 15 to 45 days of the trade date. This type of
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transaction may involve an element of risk because no interest accrues on the bonds prior to settlement and, because bonds are subject to market fluctuations, the value of the bonds at time of
delivery may be less (or more) than cost. A separate account of the Fund will be established with its custodian consisting of cash, cash equivalents, or liquid securities having a market value at all times at least equal to the amount of the
commitment.
Zero Coupon Bonds
A zero coupon bond is a bond that typically does not pay interest
either for the entire life of the obligation or for an initial period after the issuance of the obligation. When held to its maturity, the holder receives the par value of the zero coupon bond, which generates a return equal to the difference
between the purchase price and its maturity value. A zero coupon bond is normally issued and traded at a deep discount from face value. This original issue discount (“OID”) approximates the total amount of interest the security will accrue
and compound prior to its maturity and reflects the payment deferral and credit risk associated with the instrument. Because zero coupon securities and other OID instruments do not pay cash interest at regular intervals, the instruments’
ongoing accruals require ongoing judgments concerning the collectability of deferred payments and the value of any associated collateral. As a result, these securities may be subject to greater value fluctuations and less liquidity in the event of
adverse market conditions than comparably rated securities that pay cash on a current basis. Because zero coupon bonds, and OID instruments generally, allow an issuer to avoid or delay the need to generate cash to meet current interest payments,
they may involve greater payment deferral and credit risk than coupon loans and bonds that pay interest currently or in cash. The Fund generally will be required to distribute dividends to shareholders representing the income of these instruments as
it accrues, even though the Fund will not receive all of the income on a current basis or in cash. Thus, the Fund may have to sell other investments, including when it may not be advisable to do so, and use the cash proceeds to make income
distributions to its shareholders. For accounting purposes, these cash distributions to shareholders will not be treated as a return of capital.
Further, Nuveen Fund Advisors collects management fees on the value of a zero coupon bond or OID instrument attributable to the ongoing non-cash accrual of interest over the life of the bond or other instrument. As a result, Nuveen Fund Advisors receives non-refundable cash payments based on such non-cash
accruals while investors incur the risk that such non-cash accruals ultimately may not be realized.
Structured Notes. The Fund may utilize structured notes and similar instruments for investment purposes and also for hedging
purposes. Structured notes are privately negotiated debt obligations where the principal and/or interest is determined by reference to the performance of a benchmark asset, market or interest rate (an “embedded index”), such as selected
securities, an index of securities or specified interest rates, or the differential performance of two assets or markets. The terms of such structured instruments normally provide that their principal and/or interest payments are to be adjusted
upwards or downwards (but not ordinarily below zero) to reflect changes in the embedded index while the structured instruments are outstanding. As a result, the interest and/or principal payments that may be made on a structured product may vary
widely, depending upon a variety of factors, including the volatility of the embedded index and the effect of changes in the embedded index on principal and/or interest payments. The rate of return on structured notes may be determined by applying a
multiplier to the performance or differential performance of the referenced index or indices or other assets. Application of a multiplier involves leverage that will serve to magnify the potential for gain and the risk of loss. These types of
investments may generate taxable income.
Derivatives
The Fund may invest in certain derivative instruments in pursuit of its
investment objective. Such instruments include financial futures contracts, swap contracts (including interest rate and credit default swaps), options on financial futures, options on swap contracts or other derivative instruments. The Fund may also
use credit default swaps and interest rate swaps. Credit default swaps may require initial premium (discount)
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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 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 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. Interest rate swaps involve the exchange by the Fund with a counterparty of their respective commitments to pay or receive interest, such as an exchange of fixed-rate payments for floating rate
payments. The Fund will usually enter into interest rate swaps 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. See “Hedging Strategies and Other Uses of Derivatives” in the SAI.
The requirements for qualification as a RIC may also limit the extent to which the Fund may invest in futures, options on futures and swaps.
See “Tax Matters.”
Nuveen Fund Advisors and Nuveen Asset
Management may use derivative instruments to seek to enhance return, to hedge some of the risk of the Fund’s investments in municipal securities or as a substitute for a position in the underlying asset. These types of strategies may generate
taxable income.
There is no assurance that these derivative
strategies will be available at any time or that, if used, that the strategies will be successful.
Swap Transactions. The Fund may enter into total return, interest rate and credit default swap agreements and interest rate caps,
floors and collars. The Fund may also enter into options on the foregoing types of swap agreements (“swap options”).
The Fund may enter into swap transactions for any purpose consistent with its investment objective and strategies, such as for the purpose of
attempting to obtain or preserve a particular return or spread at a lower cost than obtaining a return or spread through purchases and/or sales of instruments in other markets, as a duration management technique, to reduce risk arising from the
ownership of a particular instrument, or to gain exposure to certain sectors or markets in the most economical way possible.
Swap agreements are two party contracts entered into primarily by institutional investors for a specified period of time. In a standard swap
transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on a particular predetermined asset, reference rate or index. The gross returns to be exchanged or swapped between the parties are
generally calculated with respect to a notional amount, e.g., the return on or increase in value of a particular dollar amount invested at a particular interest rate or in a basket of securities representing a particular index. The notional
amount of the swap agreement generally is only used as a basis upon which to calculate the obligations that the parties to the swap agreement have agreed to exchange. The Fund’s current obligations under a net swap agreement will be accrued
daily (offset against any amounts owed to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by assets determined to be liquid by Nuveen Asset Management.
Interest Rate Swaps, Caps, Collars and Floors. Interest
rate swaps are bilateral contracts in which each party agrees to make periodic payments to the other party based on different referenced interest rates (e.g., a
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fixed rate and a floating rate) applied to a specified notional amount. The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls below a
predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate floor. The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index rises
above a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate cap. Interest rate collars involve selling a cap and purchasing a floor or vice versa to protect the Fund
against interest rate movements exceeding given minimum or maximum levels.
The use of interest rate transactions, such as 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 Fund’s Common Stock. 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 shares of Common Stock. 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 Stock 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 Stock net earnings. Buying interest rate caps could enhance the performance of the Common Stock by providing a maximum leverage expense. Buying interest rate caps could also decrease the net
earnings of the Common Stock in the event that the premium paid by the Fund to the counterparty exceeds the additional amount such Fund would have been required to pay had it not entered into the cap agreement.
Total Return Swaps. In a total return swap, one party
agrees to pay the other the “total return” of a defined underlying asset during a specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. A total return
swap may be applied to any underlying asset but is most commonly used with equity indices, single stocks, bonds and defined baskets of loans and mortgages. The Fund might enter into a total return swap involving an underlying index or basket of
securities to create exposure to a potentially widely diversified range of securities in a single trade. An index total return swap can be used by the portfolio managers to assume risk, without the complications of buying the component securities
from what may not always be the most liquid of markets.
Credit
Default Swaps. A credit default swap is a bilateral contract that enables an investor to buy or sell protection against a defined-issuer credit event. The Fund may enter into credit default swap agreements either as a buyer or a seller.
The Fund may buy protection to attempt to mitigate the risk of default or credit quality deterioration in an individual security or a segment of the fixed income securities market to which it has exposure, or to take a “short” position in
individual bonds or market segments which it does not own. The Fund may sell protection in an attempt to gain exposure to the credit quality characteristics of particular bonds or market segments without investing directly in those bonds or market
segments. As the buyer of protection in a credit default swap, the Fund would pay a premium (by means of an upfront payment or a periodic stream of payments over the term of the agreement) in return for the right to deliver a referenced bond or
group of bonds to the protection seller and receive the full notional or par value (or other agreed upon value) upon a default (or similar event) by the issuer(s) of the underlying referenced obligation(s). If no default occurs, the protection
seller would keep the stream of payments and would have no further obligation to the Fund. Thus, the cost to the Fund would be the premium paid with respect to the agreement. If a credit event occurs, however, the Fund may elect to receive the full
notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. The Fund bears the risk that the protection seller may fail to satisfy its payment obligations.
If the Fund is a seller of protection in a credit default swap and no
credit event occurs, the Fund would generally receive an up-front payment or a periodic stream of payments over the term of the swap. If a credit event occurs, however, generally the Fund would have to pay the
buyer the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. As the protection seller, the Fund effectively adds economic leverage to its
portfolio because, in addition
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to being subject to investment exposure on its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. Thus, the Fund bears the same risk as it would by
buying the reference obligations directly, plus the additional risks related to obtaining investment exposure through a derivative instrument discussed below under “—Risks Associated with Swap Transactions.”
Swap Options. A swap option is a contract that gives a
counterparty the right (but not the obligation), in return for payment of a premium, to enter into a new swap agreement or to shorten, extend, cancel, or otherwise modify an existing swap agreement at some designated future time on specified terms.
A cash-settled option on a swap gives the purchaser the right, in return for the premium paid, to receive an amount of cash equal to the value of the underlying swap as of the exercise date. The Fund may write (sell) and purchase put and call swap
options. Depending on the terms of the particular option agreement, the Fund generally would incur a greater degree of risk when it writes a swap option than when it purchases a swap option. When the Fund purchases a swap option, it risks losing
only the amount of the premium it has paid should it decide to let the option expire unexercised. However, when the Fund writes a swap option, upon exercise of the option the Fund would become obligated according to the terms of the underlying
agreement.
Risks Associated with Swap
Transactions. The use of swap transactions is a highly specialized activity which involves strategies and risks different from those associated with ordinary portfolio security transactions. If Nuveen Fund Advisors and/or Nuveen Asset
Management is incorrect in its forecasts of default risks, market spreads or other applicable factors or events, the investment performance of the Fund would diminish compared with what it would have been if these techniques were not used. As the
protection seller in a credit default swap, the Fund effectively adds economic leverage to its portfolio because, in addition to being subject to investment exposure on its total net assets, the Fund is subject to investment exposure on the notional
amount of the swap. The Fund generally may only close out a swap, cap, floor, collar or other two-party contract with its particular counterparty, and generally may only transfer a position with the consent of
that counterparty. In addition, the price at which the Fund may close out such a two party contract may not correlate with the price change in the underlying reference asset. If the counterparty defaults, the Fund will have contractual remedies, but
there can be no assurance that the counterparty will be able to meet its contractual obligations or that the Fund will succeed in enforcing its rights. It also is possible that developments in the derivatives market, including potential government
regulation, could adversely affect the Fund’s ability to terminate existing swap or other agreements or to realize amounts to be received under such agreements.
Futures and Options on Futures Generally. A futures contract is an agreement between two parties to buy and sell a security, index
or interest rate (each a “financial instrument”) for a set price on a future date. Certain futures contracts, such as futures contracts relating to individual securities, call for making or taking delivery of the underlying financial
instrument. However, these contracts generally are closed out before delivery by entering into an offsetting purchase or sale of a matching futures contract (same exchange, underlying financial instrument, and delivery month). Other futures
contracts, such as futures contracts on interest rates and indices, do not call for making or taking delivery of the underlying financial instrument, but rather are agreements 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 financial instrument at the close of the last trading day of the contract and the price at which the contract was originally written. These contracts also may be settled by entering into an
offsetting futures contract.
Unlike when the Fund purchases or
sells a security, no price is paid or received by the Fund upon the purchase or sale of a futures contract. Initially, the Fund will be required to deposit with the futures broker, known as a futures commission merchant (“FCM”), an amount
of cash or securities equal to a varying specified percentage of the contract amount. This amount is known as initial margin. The margin deposit is intended to ensure completion of the contract. Minimum initial margin requirements are established by
the futures exchanges and may be revised. In addition, FCMs may establish margin deposit requirements that are higher than the exchange minimums. Cash held in the margin account generally is not income producing. However, couponbearing securities,
such as Treasury securities, held in margin accounts generally will earn income.
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Subsequent payments to and from the FCM, called variation margin, will be made on a daily basis
as the price of the underlying financial instrument fluctuates, making the futures contract more or less valuable, a process known as marking the contract to market. Changes in variation margin are recorded by the Fund as unrealized gains or losses.
At any time prior to expiration of the futures contract, the Fund may elect to close the position by taking an opposite position that will operate to terminate its position in the futures contract. A final determination of variation margin is then
made, additional cash is required to be paid by or released to the Fund, and the Fund realizes a gain or loss. In the event of the bankruptcy or insolvency of an FCM that holds margin on behalf of the Fund, the Fund may be entitled to the return of
margin owed to it only in proportion to the amount received by the FCM’s other customers, potentially resulting in losses to the Fund. Futures transactions also involve brokerage costs.
A futures option gives the purchaser of such option 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 purchaser acquires a long
position in the futures contract and the writer is assigned the opposite short position. Upon the exercise of a put option, the opposite is true.
Other Investment Companies
The Fund may invest in securities of other open- or closed-end investment companies, including ETFs,
that invest primarily in municipal securities of the types in which the Fund may invest directly.
The Fund may invest in investment companies that are advised by Nuveen Fund Advisors, Nuveen Asset Management or their respective affiliates to
the extent permitted by applicable law and/or pursuant to exemptive relief from the SEC. The Fund has not applied for and currently does not intend to apply for such relief. As a shareholder in an 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 and administrative fees with respect to assets so invested. Common Stockholders would therefore be subject to duplicative expenses to
the extent the Fund invests in other investment companies. The Fund will consider of its investment in underlying investment companies when determining its compliance with its policy to invest at least 80% of its Managed Assets (plus any borrowings
for investment purposes) in municipal securities, the income of which is exempt from regular federal income tax.
Nuveen Asset Management will take expenses into account when evaluating the investment merits of an investment in an investment company
relative to available municipal security investments. In addition, because the securities of other investment companies may be leveraged subject to leverage risk, the Fund may indirectly be subject to those risks. See “Other Investment
Companies Risk.” These types of investments may generate taxable income. See “Risk Factors—Other Investment Companies Risk.”
Portfolio Turnover
The Fund may engage in portfolio trading when considered appropriate, but short-term trading will not be used as the primary means of achieving
the Fund’s investment objective. Although the Fund cannot accurately predict its annual portfolio turnover rate, it is generally not expected to exceed 25% under normal circumstances. For the fiscal year ended October 31, 2022, the
Fund’s portfolio turnover rate was 61%. For the six months ended April 30, 2023, the Fund’s portfolio turnover rate was 9%. However, there are no limits on the Fund’s rate of portfolio turnover, and investments may be sold
without regard to length of time held when, in Nuveen Asset Management’s opinion, investment considerations warrant such action. A higher portfolio turnover rate would result in correspondingly greater brokerage commissions and other
transactional expenses that are borne by the Fund. Although these commissions and expenses are not reflected in the Fund’s “Total Annual Expenses” disclosed in this Prospectus, they will be reflected in the Fund’s total return.
In addition, high portfolio turnover may result in the realization of net short-term capital gains by the Fund which, when distributed to shareholders, will be taxable as ordinary income. See “Tax Matters.”
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USE OF LEVERAGE
As a fundamental policy, the Fund will not leverage its capital
structure by issuing senior securities such as preferred shares or debt instruments. However, the Fund may borrow for temporary, emergency or certain other purposes as permitted by the Investment Company Act of 1940, as amended, and invest in
certain instruments, including inverse floating rate securities that have the economic effect of financial leverage. The Fund may invest up to 15% of its Managed Assets in inverse floating rate securities. See “Portfolio Composition and Other
Information—Inverse Floating Rate Securities.”
Inverse
floating rate securities have the economic effect of financial leverage because the Fund’s investment exposure to the underlying bonds held by the trust have been effectively financed by the trust’s issuance of floating rate certificates.
See “Inverse Floating Rate Securities.” As of August 31, 2023, the Fund did not invest in inverse floating rate securities.
The Fund, along with certain other funds managed by Nuveen Fund Advisors (the “Participating Funds”), also established a 364-day, approximately $2.7 billion standby credit facility with a group of lenders, under which the Participating Funds may borrow for various purposes other than leveraging for investment purposes. A large
portion of this facility’s capacity is currently dedicated for use by a small number of Participating Funds, which does not include the Fund. The remaining capacity under the facility (and the corresponding portion of the facility’s annual
costs) is separately dedicated to most of the other open-end funds in the Nuveen fund family, along with a number of Nuveen closed-end funds, including the Fund. The
credit facility expires in June 2024 unless extended or renewed.
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RISK FACTORS
Risk is inherent in all investing. Investing in any investment company
security involves risk, including the risk that you may receive little or no return on your investment or even that you may lose part or all of your investment. Therefore, before investing you should consider carefully the following risks that you
assume when you invest in Common Stock.
Portfolio Level Risks
Municipal Securities Market Risk. The
amount of public information available about the municipal securities in the Fund’s portfolio is generally less than that for corporate equities or bonds, and the investment performance of the Fund may therefore be more dependent on the
analytical abilities of Nuveen Asset Management than if the Fund were a stock fund or taxable bond fund. The secondary market for municipal securities, particularly the below investment grade bonds in which the Fund may invest, also tends to be less
well-developed or liquid than many other securities markets, which may adversely affect the Fund’s ability to sell its municipal securities at attractive prices. In addition, the market for below investment grade municipal securities has
experienced in the past, and may experience in the future, periods of significant volatility, which could negatively impact the value of the municipal securities in the Fund’s portfolio and the market price of the shares of Common Stock.
The ability of municipal issuers to make timely payments of interest
and principal may be diminished during general economic downturns and as governmental cost burdens are reallocated among federal, state and local governments. In addition, laws enacted in the future by Congress or state legislatures or referenda
could extend the time for payment of principal and/or interest, or impose other constraints on enforcement of such obligations, or on the ability of municipalities to levy taxes. Further, some state and local governments have been and in the future
may be subject to direct ballot referenda that could limit their financial flexibility, or their ability to levy taxes or raise revenues, which may adversely affect the marketability of notes and bonds issued by those state and local governments.
Issuers of municipal securities might seek protection under the bankruptcy laws. In the event of bankruptcy of such an issuer, the Fund could experience delays in collecting principal and interest and the Fund may not, in all circumstances, be able
to collect all principal and interest to which it is entitled. To enforce its rights in the event of a default in the payment of interest or repayment of principal, or both, the Fund may take possession of and manage the assets securing the
issuer’s obligations on such securities, which may increase the Fund’s operating expenses. Any income derived from the Fund’s ownership or operation of such assets may not be tax-exempt.
Credit Risk. Issuers of securities in which the Fund may
invest may default on their obligations to pay principal or interest when due. This non-payment would result in a reduction of income to the Fund, a reduction in the value of a debt security experiencing non-payment and, potentially, a decrease in the net asset value of the Fund. With respect to the Fund’s investments in securities that are secured, there can be no assurance that liquidation of collateral would
satisfy the issuer’s obligation in the event of non-payment of a scheduled interest or principal payment or that such collateral could be readily liquidated. In the event of the bankruptcy of an issuer
the Fund could experience delays or limitations with respect to its ability to realize the benefits of any collateral securing a security. To the extent that the credit rating assigned to a security in the Fund’s portfolio is downgraded, the
market price and liquidity of such security may be adversely affected.
Credit Spread Risk. Credit spread risk is the risk that credit spreads (i.e., the difference in yield between securities
that is due to differences in their credit quality) may increase when the market believes that municipal securities generally have a greater risk of default. Increasing credit spreads may reduce the market values of the Fund’s securities.
Credit spreads often increase more for lower rated and unrated securities than for investment grade securities. In addition, when credit spreads increase, reductions in market value will generally be greater for longer-maturity securities.
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Below Investment Grade Risk. Debt instruments of below investment grade quality are
regarded as having predominately speculative characteristics with respect to the issuer’s capacity to pay interest and repay principal, and are commonly referred to as junk bonds or high yield debt, which implies higher price volatility and
default risk than investment grade instruments of comparable terms and duration. Issuers of lower grade instruments may be highly leveraged and may not have available to them more traditional methods of financing. The prices of these lower grade
instruments are typically more sensitive to negative developments, such as a decline in the issuer’s revenues or a general economic downturn, than are the prices of higher grade instruments.
If a below investment grade security goes into default, or its issuer
enters bankruptcy, it might be difficult to sell that security in a timely manner at a reasonable price.
The secondary market for lower grade instruments may not be as liquid as the secondary market for more highly rated instruments, a factor which
may have an adverse effect on the Fund’s ability to dispose of a particular instrument. There are fewer dealers in the market for lower grade securities than for investment grade obligations. The prices quoted by different dealers for lower
grade instruments may vary significantly and the spread between the bid and ask price for such instruments is generally much larger than for higher quality instruments. Under adverse market or economic conditions, the secondary market for lower
grade 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 instruments or
may be able to sell the instruments only at prices lower than if such instruments were widely traded. Prices realized upon the sale of such lower rated or unrated instruments, under these circumstances, may be less than the prices used in
calculating the Fund’s net asset value.
For these reasons, an
investment in the Fund, compared with a portfolio consisting solely of investment grade securities, may experience the following:
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• |
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increased price sensitivity resulting from a deteriorating economic environment and changing interest rates; |
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greater risk of loss due to default or declining credit quality; |
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adverse issuer specific events that are more likely to render the issuer unable to make interest and/or principal payments; and |
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the possibility that a negative perception of the below investment grade market develops, resulting in the price and liquidity of below investment grade securities becoming depressed, and this negative perception could
last for a significant period of time. |
In the event
that the Fund disposes of a portfolio security subsequent to its being downgraded, the Fund may experience a greater loss than if such security had been sold prior to such downgrade.
Interest Rate Risk. Interest rate risk is the risk that
debt securities in the Fund’s portfolio will decline in value because of changes in market interest rates. Generally, when market interest rates rise, the market value of such securities will fall, and vice versa. As interest rates decline,
issuers of debt securities may prepay principal earlier than scheduled, forcing the Fund to reinvest in lower-yielding securities and potentially reducing the Fund’s income. As interest rates increase, slower than expected principal payments
may extend the average life of securities, potentially locking in a below-market interest rate and reducing the Fund’s value. In typical market interest rate environments, the prices of longer-term debt securities generally fluctuate more than
prices of shorter-term debt securities as interest rates change. As of the date of this Prospectus, the risk of rising interest rates may be greater than would normally be the case due to the current changes in government fiscal policy initiatives
and resulting market reaction to those initiatives. Because the market price of debt securities may change based upon investors’ collective perceptions of future earnings, the value of the Fund will generally decline when investors anticipate
or experience rising interest rates.
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London Inter-bank Offered Rate (“LIBOR”) Transition Risk. To the extent
that a debt security continues to use LIBOR as a benchmark or reference rate for interest rate calculations, such security is subject to risks related to the transition from LIBOR to the Secured Overnight Funding Rate (“SOFR”). SOFR has
been selected by a committee established by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York to replace LIBOR as a reference rate for certain financial contracts in the United States after June 30,
2023. However, there remains uncertainty regarding the new replacement rate as well as the impact of the transition from LIBOR on the Fund and the financial markets generally. Other countries have undertaken similar initiatives to identify
replacement reference rates in their respective markets. The transition process, or the failure of an industry to transition, could lead to increased volatility and illiquidity in markets for instruments that currently rely on LIBOR to determine
interest rates, and a reduction in the values of some LIBOR-based investments, all of which could impact the Fund.
Duration Risk. Duration is the sensitivity, expressed in years, of the price of a fixed-income security to changes in the general
level of interest rates (or yields). Securities with longer durations tend to be more sensitive to interest rate (or yield) changes, which typically corresponds to increased volatility and risk, than securities with shorter durations. For example,
if a security or portfolio has a duration of three years and interest rates increase by 1%, then the security or portfolio would decline in value by approximately 3%. Duration differs from maturity in that it considers potential changes to interest
rates, and a security’s coupon payments, yield, price and par value and call features, in addition to the amount of time until the security matures. The duration of a security will be expected to change over time with changes in market factors
and time to maturity.
Call Risk. The Fund may invest
in debt securities that are subject to call risk. Such municipal securities may be redeemed at the option of the issuer, or “called,” before their stated maturity or redemption date. In general, an issuer will call its instruments if they
can be refinanced by issuing new instruments which bear a lower interest rate. The Fund is subject to the possibility that during periods of falling interest rates, an issuer will call its high yielding municipal securities. The Fund would then be
forced to invest the unanticipated proceeds at lower interest rates, resulting in a decline in the Fund’s income.
Prepayment Risk. Prepayment risk is the risk that the issuer of a debt security will repay principal (in part or in whole) prior
to the scheduled maturity date. Debt securities allowing prepayment may offer less potential for gains during a period of declining interest rates, as the Fund may be required to reinvest the proceeds of any prepayment at lower interest rates,
reducing its income. If the Fund purchased the debt securities at a premium, prepayments on the securities could cause the Fund to lose a portion of its principal investment. These factors may cause the value of an investment in the Fund to change.
The impact of prepayments on the price of a debt security may be difficult to predict and may increase the security’s volatility.
Reinvestment Risk. Reinvestment risk is the risk that income from the Fund’s portfolio will decline if and when the Fund
invests the proceeds from matured, traded or called securities at market interest rates that are below the portfolio’s current earnings rate. A decline in income could affect the Common Stock’s market price, net asset value and/or a Common
Stockholder’s overall returns.
Alternative Minimum Tax
Risk. The Fund may invest in AMT Bonds. Therefore, a portion of the Fund’s otherwise exempt-interest dividends may be taxable to those shareholders subject to the federal alternative minimum tax.
Inverse Floating Rate Securities Risk. The Fund may invest
in inverse floating rate securities. Typically, inverse floating rate securities represent beneficial interests in a special purpose trust (sometimes called a “tender option bond trust”) formed for the purpose of holding municipal bonds.
See “The Fund’s Investments—Portfolio Composition—Municipal Securities—Inverse Floating Rate Securities.” In general, income on inverse floating rate securities will decrease when short-term interest rates increase and
increase when short-term interest rates decrease. Investments in inverse floating rate securities may subject the Fund to the risks of reduced or eliminated interest payments and losses of principal.
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The Fund may invest in inverse floating rate securities issued by special purpose trusts that
have recourse to the Fund. In Nuveen Fund Advisors’ and Nuveen Asset Management’s discretion, the Fund may enter into separate shortfall and forbearance agreement with the third party granting liquidity to the floating rate security
holders of the special purpose trust. The Fund may enter into such recourse agreements (i) when the liquidity provider to the special purpose trust requires such an agreement because the level of leverage in the trust exceeds the level that the
liquidity provider is willing to support absent such an agreement; and/or (ii) to seek to prevent the liquidity provider from collapsing the trust in the event that the municipal obligation held in the trust has declined in value. Such an
agreement would require the Fund to reimburse the third party granting liquidity to the floating rate security holders of the special purpose trust, upon termination of the trust issuing the inverse floater, the difference between the liquidation
value of the bonds held in the trust and the principal amount due to the holders of floating rate interests. In such instances, the Fund may be at risk of loss that exceeds its investment in the inverse floating rate securities.
Inverse floating rate securities may increase or decrease in value at a
greater rate than the underlying interest rate, which effectively leverages the Fund’s investment. As a result, the market value of such securities generally will be more volatile than that of fixed rate securities.
The Fund’s investments in inverse floating rate securities issued
by special purpose trusts that have recourse to the Fund may be highly leveraged. The structure and degree to which the Fund’s inverse floating rate securities are highly leveraged will vary based upon a number of factors, including the size of
the trust itself and the terms of the underlying municipal security. In the event of a significant decline in the value of an underlying security, the Fund may suffer losses in excess of the amount of its investment (up to an amount equal to the
value of the municipal securities underlying the inverse floating rate securities) as a result of liquidating special purpose trusts or other collateral required to maintain the Fund’s anticipated leverage ratio.
The Fund’s investment in inverse floating rate securities creates
leverage. Any leverage achieved through the Fund’s investment in inverse floating rate securities will create an opportunity for increased Common Share net income and returns, but will also create the possibility that Common Stock long-term
returns will be diminished if the cost of leverage exceeds the return on the inverse floating rate securities purchased by the Fund. See “Risk Factors—Fund Level and Other Risks—Leverage Risk.”
The amount of fees paid to Nuveen Asset Management for investment
advisory services will be higher if the Fund uses leverage because the fees will be calculated based on the Fund’s Managed Assets—this may create an incentive for Nuveen Asset Management to leverage the Fund. “Managed Assets”
means the total assets of the Fund, minus the sum of its accrued liabilities (other than liabilities incurred for the express purpose of creating leverage). Total assets for this purpose shall include assets attributable to the Fund’s use of
leverage (whether or not those assets are reflected in the Fund’s financial statements for purposes of generally accepted accounting principles), and derivatives will be valued at their market value.
Inverse floating rate securities have varying degrees of liquidity
based, among other things, upon the liquidity of the underlying securities deposited in a special purpose trust. The market price of inverse floating rate securities is more volatile than the underlying securities due to leverage. The leverage
attributable to such inverse floating rate securities may be “called away” on relatively short notice and therefore may be less permanent than more traditional forms of leverage. In certain circumstances, the likelihood of an increase in
the volatility of NAV and market price of the shares of Common Stock may be greater for a fund (like the Fund) that relies primarily on inverse floating rate securities to achieve a desired leverage ratio. The Fund may be required to sell its
inverse floating rate securities at less than favorable prices, or liquidate other Fund portfolio holdings in certain circumstances, including, but not limited to, the following:
| |
• |
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If the Fund has a need for cash and the securities in a special purpose trust are not actively trading due to adverse market conditions; |
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• |
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If special purpose trust sponsors (as a collective group or individually) experience financial hardship and consequently seek to terminate their respective outstanding trusts; and |
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| |
• |
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If the value of an underlying security declines significantly and if additional collateral has not been posted by the Fund. |
There is no assurance that the Fund’s strategy of investing in inverse floating rate securities will be successful.
Municipal Securities Market Liquidity Risk. Inventories of
municipal securities held by brokers and dealers have decreased in recent years, lessening their ability to make a market in these securities. This reduction in market making capacity has the potential to decrease the Fund’s ability to buy or
sell municipal securities at attractive prices, and increase municipal security price volatility and trading costs, particularly during periods of economic or market stress. In addition, recent federal banking regulations may cause certain dealers
to reduce their inventories of municipal securities, which may further decrease the Fund’s ability to buy or sell municipal securities. The secondary market for municipal securities, particularly the below investment grade municipal securities
in which the Fund may invest, also tends to be less well-developed or liquid than many other securities markets, which may adversely affect the Fund’s ability to sell its municipal securities at attractive prices. In addition, recent federal
banking regulations may cause certain dealers to reduce their inventories of municipal securities, which may further decrease the Fund’s ability to buy or sell municipal securities. As a result, the Fund may be forced to accept a lower price to
sell a security, to sell other securities to raise cash, or to give up an investment opportunity, any of which could have a negative effect on performance. If the Fund needed to sell large blocks of municipal securities to raise cash to meet its
obligations, those sales could further reduce the municipal securities’ prices and hurt performance. The Fund may invest a significant portion of its assets in unrated municipal securities. The market for these municipal securities may be less
liquid than the market for rated municipal securities of comparable quality. Less public information is typically available about unrated municipal securities or issuers than rated municipal securities or issuers.
Special Risks Related to Certain Municipal
Obligations. Municipal leases and certificates of participation involve special risks not normally associated with general obligations or revenue bonds. Leases and installment purchase or conditional sale contracts (which normally provide
for title to the leased asset to pass eventually to the governmental issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting the constitutional and statutory requirements for the issuance of debt.
The debt issuance limitations are deemed to be inapplicable because of the inclusion in many leases or contracts of “non-appropriation” clauses that relieve the governmental issuer of any obligation
to make future payments under the lease or contract unless money is appropriated for such purpose by the appropriate legislative body. In addition, such leases or contracts may be subject to the temporary abatement of payments in the event that the
governmental issuer is prevented from maintaining occupancy of the leased premises or utilizing the leased equipment. Although the obligations may be secured by the leased equipment or facilities, the disposition of the property in the event of non-appropriation or foreclosure might prove difficult, time consuming and costly, and may result in a delay in recovering or the failure to fully recover the Fund’s original investment. In the event of non-appropriation, the issuer would be in default and taking ownership of the assets may be a remedy available to the Fund, although the Fund does not anticipate that such a remedy would normally be pursued. To the
extent that the Fund invests in unrated municipal leases or participates in such leases, the credit quality rating and risk of cancellation of such unrated leases will be monitored on an ongoing basis. Certificates of participation, which represent
interests in unmanaged pools of municipal leases or installment contracts, involve the same risks as the underlying municipal leases. In addition, the Fund may be dependent upon the municipal authority issuing the certificate of participation to
exercise remedies with respect to the underlying securities. Certificates of participation also entail a risk of default or bankruptcy, both of the issuer of the municipal lease and also the municipal agency issuing the certificate of participation.
Illiquid Investments Risk. Illiquid investments are
securities that are not readily marketable. These securities may include restricted securities, which cannot be resold to the public without an effective registration statement under the 1933 Act, or, if they are unregistered, may be sold only in a
privately negotiated transaction or pursuant to an exemption from registration. The Fund may not be able to readily dispose of such securities at
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prices that approximate those at which the Fund could sell such securities if they were more widely traded and, as a result of such illiquidity, the Fund may have to sell other investments or
engage in borrowing transactions if necessary to raise cash to meet its obligations. Limited liquidity can also affect the market price of securities, thereby adversely affecting the Fund’s net asset value and ability to make dividend
distributions. The financial markets in general have in recent years experienced periods of extreme secondary market supply and demand imbalance, resulting in a loss of liquidity during which market prices were suddenly and substantially below
traditional measures of intrinsic value. During such periods, some securities could be sold only at arbitrary prices and with substantial losses. Periods of such market dislocation may occur again at any time.
Distressed Securities Risk. The Fund may invest in low-rated securities or securities unrated but judged by the sub-adviser to be of comparable quality. Some or many of these low-rated
securities, although not in default, may be “distressed,” meaning that the issuer is experiencing financial difficulties or distress at the time of acquisition. Such securities would present a substantial risk of future default which may
cause the Fund to incur losses, including additional expenses, to the extent it is required to seek recovery upon a default in the payment of principal or interest on those securities. In any reorganization or liquidation proceeding relating to a
portfolio security, the Fund may lose its entire investment or may be required to accept cash or securities with a value less than its original investment. Distressed securities may be subject to restrictions on resale.
Derivatives Risk. The use of derivatives involves
additional risks and transaction costs which could leave the Fund in a worse position than if it had not used these instruments. Derivative instruments can be used to acquire or to transfer the risk and returns of a municipal security or other asset
without buying or selling the municipal security or asset. These instruments may entail investment exposures that are greater than their cost would suggest. As a result, a small investment in derivatives can result in losses that greatly exceed the
original investment. Derivatives can be highly volatile, illiquid and difficult to value. An over-the-counter derivative transaction between the Fund and a counterparty
that is not cleared through a central counterparty also involves the risk that a loss may be sustained as a result of the failure of the counterparty to the contract to make required payments. The payment obligation for a cleared derivative
transaction is guaranteed by a central counterparty, which exposes the Fund to the creditworthiness of the central counterparty. It is possible that developments in the derivatives market, including changes in government regulation, could adversely
impact the Fund’s ability to invest in certain derivatives.
Whether the Fund’s use of derivatives is successful will depend on, among other things, Nuveen Fund Advisors and Nuveen Asset Management
correctly forecasting market circumstances, liquidity, market values, interest rates and other applicable factors. If Nuveen Fund Advisors and Nuveen Asset Management incorrectly forecast these and other factors, the investment performance of the
Fund will be unfavorably affected. In addition, there can be no assurance that the derivatives investing techniques, as they may be developed and implemented by the Fund, will be successful in mitigating risk or achieving the Fund’s investment
objective. The use of derivatives to enhance returns may be particularly speculative.
Swap Transactions Risk. The Fund may enter into debt-related derivatives instruments such as credit default swap contracts and
interest rate swaps. Like most derivative instruments, the use of swaps is a highly specialized activity that involves investment techniques and risks different from those associated with ordinary portfolio securities transactions. In addition, the
use of swaps requires an understanding by Nuveen Asset Management not only of the referenced asset, rate or index, but also of the swap itself. If Nuveen Fund Advisors and/or Nuveen Asset Management is incorrect in its forecasts of default risks,
market spreads or other applicable factors or events, the investment performance of the Fund would diminish compared with what it would have been if these techniques were not used. As the protection seller in a credit default swap, the Fund
effectively adds leverage to its portfolio because, in addition to being subject to investment exposure on its total net assets, the Fund is subject to investment exposure on the notional amount of the swap.
The Fund generally may only close out a swap, cap, floor, collar or
other two-party contract with its particular counterparty, and generally may only transfer a position with the consent of that counterparty. Because
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they are two-party contracts and because they may have terms of greater than seven days, swap agreements may be considered illiquid. In addition, the price
at which the Fund may close out such a two-party contract may not correlate with the price change in the underlying reference asset. Moreover, the Fund bears the risk of loss of the amount expected to be
received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. If the counterparty defaults, the Fund will have contractual remedies, but there can be no assurance that the counterparty will be able to
meet its contractual obligations or that the Fund will succeed in enforcing its rights.
The Fund may write (sell) and purchase put and call swap options. When the Fund purchases a swap option, it risks losing only the amount of the
premium it has paid should it decide to let the option expire unexercised. When the Fund writes a swap option, upon exercise of the option the Fund would become obligated according to the terms of the underlying agreement t is possible that
developments in the derivatives market, including changes in government regulation, could adversely affect the Fund’s ability to terminate existing swap agreements or to realize amounts to be received under such agreements.
Financial Futures and Options Transactions Risk. The Fund
may use certain transactions for hedging the portfolio’s exposure to credit risk and the risk of increases in interest rates, which could result in poorer overall performance for the Fund. The Fund’s use of certain transactions to reduce
risk involves costs and will be subject to Nuveen Asset Management’s ability to predict correctly changes in the relationships of such hedge instruments to the Fund’s portfolio holdings or other factors. No assurance can be given that
Nuveen Asset Management’s judgment in this respect will be correct. In addition, no assurance can be given that the Fund will enter into hedging or other transactions at times or under circumstances in which it may be advisable to do so.
There are certain risks associated with the use of financial futures
and options to hedge investment portfolios. There may be an imperfect correlation between price movements of the futures and options and price movements of the portfolio securities being hedged. Losses may be incurred in hedging transactions, which
could reduce the portfolio gains that might have been realized if the hedging transactions had not been entered into. If the Fund engages in futures transactions or in the writing of options on futures, it will be required to maintain initial margin
and maintenance margin and may be required to make daily variation margin payments in accordance with applicable rules of the exchanges and the Commodity Futures Trading Commission (the “CFTC”). If the Fund purchases a financial futures
contract or a call option or writes a put option in order to hedge the anticipated purchase of municipal securities, and if the Fund fails to complete the anticipated purchase transaction, the Fund may have a loss or a gain on the futures or options
transaction that will not be offset by price movements in the municipal securities that were the subject of the anticipatory hedge. The cost of put options on debt securities or indexes effectively increases the cost of the securities subject to
them, thereby reducing the yield otherwise available from these securities. If the Fund decides to use futures contracts or options on futures contracts for hedging purposes, the Fund will be required to establish an account for such purposes with
one or more CFTC-registered futures commission merchants. A futures commission merchant could establish initial and maintenance margin requirements for the Fund that are greater than those which would otherwise apply to the Fund under applicable
rules of the exchanges and the CFTC. There can be no assurance that a liquid market will exist at a time when the Fund seeks to close out a derivatives or futures or a futures option position, and the Fund would remain obligated to meet margin
requirements until the position is closed. 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 the 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.
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Hedging Risk. The Fund’s use of derivatives or other transactions to reduce
risks involves costs and will be subject to Nuveen Asset Management’s ability to predict correctly changes in the relationships of such hedge instruments to the Fund’s portfolio holdings or other factors. No assurance can be given that
Nuveen Asset Management’s judgment in this respect will be correct. In addition, no assurance can be given that the Fund will enter into hedging or other transactions at times or under circumstances in which it may be advisable to do so.
Hedging activities may reduce the Fund’s opportunities for gain by offsetting the positive effects of favorable price movements and may result in net losses.
Puerto Rico Municipal Securities Market Risk. To the extent that the Fund invests a significant portion of its assets in the
securities issued by the Commonwealth of Puerto Rico or its political subdivisions, agencies, instrumentalities, or public corporations (collectively referred to in this Prospectus as “Puerto Rico” or the “Commonwealth”), it will
be disproportionally affected by political, social and economic conditions and developments in the Commonwealth. In addition, economic, political or regulatory changes in that territory could adversely affect the value of the Fund’s investment
portfolio.
Puerto Rico currently is experiencing significant
fiscal and economic challenges, including substantial debt service obligations, high levels of unemployment, underfunded public retirement systems, and persistent government budget deficits. These challenges may negatively affect the value of the
Fund’s investments in Puerto Rican municipal securities. Several major ratings agencies have downgraded the general obligation debt of Puerto Rico to below investment grade and continue to maintain a negative outlook for this debt, which
increases the likelihood that the rating will be lowered further. In both August 2015 and January 2016, Puerto Rico defaulted on its debt by failing to make full payment due on its outstanding bonds, and there can be no assurance that Puerto Rico
will be able to satisfy its future debt obligations. Further downgrades or defaults may place additional strain on the Puerto Rico economy and may negatively affect the value, liquidity, and volatility of the Fund’s investments in Puerto Rican
municipal securities. Additionally, numerous issuers have entered Title III of the Puerto Rico Oversite, Management and Economic Stability Act (“PROMESA”), which is similar to bankruptcy protection, through which the Commonwealth of Puerto
Rico can restructure its debt. However, Puerto Rico’s case is the first ever heard under PROMESA and there is no existing case precedent to guide the proceedings. Accordingly, Puerto Rico’s debt restructuring process could take
significantly longer than traditional municipal bankruptcy proceedings. Further, it is not clear whether a debt restructuring process will ultimately be approved or, if so, the extent to which it will apply to Puerto Rico municipal securities sold
by an issuer other than the territory. A debt restructuring could reduce the principal amount due, the interest rate, the maturity, and other terms of Puerto Rico municipal securities, which could adversely affect the value of Puerto Rican municipal
securities. Legislation, including PROMESA that would allow Puerto Rico to restructure its municipal debt obligations, thus increasing the risk that Puerto Rico may never pay off municipal indebtedness, or may pay only a small fraction of the amount
owed, could also impact the value of the Fund’s investments in Puerto Rican municipal securities.
These challenges and uncertainties have been exacerbated by Hurricanes Irma and Maria and the resulting natural disaster in Puerto Rico. In
September 2017, Hurricanes Irma and Maria struck Puerto Rico, causing major damage across the Commonwealth, including damage to its water, power, and telecommunications infrastructure. The length of time needed to rebuild Puerto Rico’s
infrastructure is unclear, but could amount to years, during which the Commonwealth is likely to be in an uncertain economic state. The full extent of the natural disaster’s impact on Puerto Rico’s economy and foreign investment in Puerto
Rico is difficult to estimate.
More recently, in late December
2019 and January 2020, a series of earthquakes hit Puerto Rico, including a magnitude 6.4 earthquake, the most powerful earthquake to hit the island in more than a century, causing an estimated $200 million in damage. In addition, in early
2020, as the population of Puerto Rico worked to recover from these natural disasters, the island was significantly impacted by Covid, resulting in the Commonwealth’s authorization of a $787 million relief package to fight the pandemic and
its economic impacts. Any reduction in the Commonwealth’s revenues as a result of the pandemic could have a negative ability on the Commonwealth to meet its debt service obligations, including with respect to debt held by the Fund.
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Puerto Rico’s political and economic conditions could have a negative impact on the
liquidity or value of Puerto Rican municipal securities, and consequently may affect the Fund’s investments and its performance if the Fund invests a significant portion of its assets in Puerto Rican municipal securities.
Sector Focus Risk. At times, the Fund may focus its
investments (i.e., overweight its investments relative to the overall municipal securities market) in one or more particular sectors, which may subject the Fund to additional risk and variability. Securities issued in the same sector may be
similarly affected by economic or market events, making the Fund more vulnerable to unfavorable developments in that sector than funds that invest more broadly. As the percentage of the Fund’s Managed Assets invested in a particular sector
increases, so does the potential for fluctuation in the net asset value of the shares of Common Stock.
Sector and Industry Risk. Subject to the concentration limits of the Fund’s investment policies and guidelines, the Fund may
invest a significant portion of its net assets in certain sectors of the municipal securities market, such as hospitals and other health care facilities, charter schools and other private educational facilities, special taxing districts and start-up utility districts, and private activity bonds including industrial development bonds on behalf of transportation companies such as airline companies, whose credit quality and performance may be more
susceptible to economic, business, political, regulatory and other developments than other sectors of municipal issuers. If the Fund invests a significant portion of its net assets in the sectors noted above, the Fund’s performance may be
subject to additional risk and variability.
Economic Sector
Risk. The Fund may invest a significant amount of its total assets in municipal securities in the same economic sector. This may make the Fund more susceptible to adverse economic, political or regulatory occurrences affecting an economic
sector. As concentration increases, so does the potential for fluctuation in the value of the Fund’s assets. In addition, the Fund may invest a significant portion of its assets in certain sectors of the municipal securities market, such as
hospitals and other health care facilities, charter schools and other private educational facilities, special taxing districts and start-up utility districts, and private activity bonds including industrial
development bonds on behalf of transportation companies such as airline companies, whose credit quality and performance may be more susceptible to economic, business, political, regulatory and other developments than other sectors of municipal
issuers. If the Fund invests a significant portion of its assets in the sectors noted above, the Fund’s performance may be subject to additional risk and variability. To the extent that the Fund focuses its assets in the hospital and healthcare
facilities sector, for example, the Fund will be subject to risks associated with such sector, including adverse government regulation and reduction in reimbursement rates, as well as government approval of products and services and intense
competition. Securities issued with respect to special taxing districts will be subject to various risks, including real-estate development related risks and taxpayer concentration risk. Further, the fees, special taxes or tax allocations and other
revenues established to secure the obligations of securities issued with respect to special taxing districts are generally limited as to the rate or amount that may be levied or assessed and are not subject to increase pursuant to rate covenants or
municipal or corporate guarantees. Charter schools and other private educational facilities are subject to various risks, including the reversal of legislation authorizing or funding charter schools, the failure to renew or secure a charter, the
failure of a funding entity to appropriate necessary funds and competition from alternatives such as voucher programs. Issuers of municipal utility securities can be significantly affected by government regulation, financing difficulties, supply and
demand of services or fuel and natural resource conservation. The transportation sector, including airports, airlines, ports and other transportation facilities, can be significantly affected by changes in the economy, fuel prices, labor relations,
insurance costs and government regulation.
Income
Risk. The Fund’s income is based primarily on the interest it earns from its investments, which can vary widely over the short and long term. The Fund’s income could decline due to falling market interest rates. This is because,
in a falling interest rate environment, the Fund generally will have to invest the proceeds from maturing portfolio securities in lower-yielding securities. This risk is magnified when prevailing short-term interest rates increase and the Fund holds
residual interest municipal bonds.
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Inflation Risk. Inflation is the reduction in the purchasing power of money
resulting from the increase in the price of goods and services. Inflation risk is the risk that the value of assets or income from investments will be worth less in the future as inflation decreases the value of money. As inflation increases, the
real value of the shares of Common Stock and distributions can decline.
Deflation Risk. Deflation risk is the risk that prices throughout the economy decline over time, which may have an adverse effect
on the market valuation of companies, their assets and revenues. In addition, deflation may have an adverse effect on the creditworthiness of issuers and may make issuer default more likely, which may result in a decline in the value of the
Fund’s portfolio.
Zero Coupon Bonds
Risk. Because interest on zero coupon bonds is not paid on a current basis, the values of zero coupon bonds will be more volatile in response to interest rate changes than the values of bonds that distribute income regularly. Although zero
coupon bonds generate income for accounting purposes, they do not produce cash flow, and thus the Fund could be forced to liquidate securities at an inopportune time in order to generate cash to distribute to shareholders as required by tax laws.
Tax Risk. To qualify for the favorable U.S. federal
income tax treatment generally accorded to a RIC under Subchapter M of the Code the Fund must, among other requirements, derive in each taxable year at least 90% of its gross income from certain prescribed sources and satisfy a diversification test
on a quarterly basis. If the Fund fails to satisfy the qualifying income or diversification requirements in any taxable year, the Fund may be eligible for relief provisions if the failures are due to reasonable cause and not willful neglect and if a
penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain de minimis failures of the diversification requirements where the Fund corrects the failure within a specified
period. In order to be eligible for the relief provisions with respect to a failure to meet the diversification requirements, the Fund may be required to dispose of certain assets. If these relief provisions were not available to the Fund and it
were to fail to qualify for treatment as a RIC for a taxable year, all of its taxable income (including its net capital gain) would be subject to tax at the 21% regular corporate rate without any deduction for distributions to shareholders, and such
distributions would be taxable as ordinary dividends to the extent of the Fund’s current and accumulated earnings and profits.
To qualify to pay exempt-interest dividends, which are treated as items of interest excludable from gross income for federal income tax
purposes, at least 50% of the value of the total assets of the Fund must consist of obligations exempt from regular income tax as of the close of each quarter of the Fund’s taxable year. If the proportion of taxable investments held by the Fund
exceeds 50% of the Fund’s total assets as of the close of any quarter of any Fund taxable year, the Fund will not for that taxable year satisfy the general eligibility test that otherwise permits it to pay exempt-interest dividends.
The value of the Fund’s investments and its net asset value may be
adversely affected by changes in tax rates and policies. Because interest income from municipal securities is normally not subject to regular federal income taxation, the attractiveness of municipal securities in relation to other investment
alternatives is affected by changes in federal income tax rates or changes in the tax-exempt status of interest income from municipal securities. Any proposed or actual changes in such rates or exempt status,
therefore, can significantly affect the demand for and supply, liquidity and marketability of municipal securities. This could in turn affect the Fund’s net asset value and ability to acquire and dispose of municipal securities at desirable
yield and price levels. Additionally, the Fund is not a suitable investment for tax exempt or tax-deferred accounts or for investors who are not sensitive to the federal income tax consequences of their
investments.
The Fund’s investment in AMT Bonds may trigger
adverse tax consequences for Fund shareholders who are subject to the federal alternative minimum tax applicable to non-corporate taxpayers. If you are, or as a result of investment in the Fund would become,
subject to the federal alternative minimum tax, the Fund may not be a suitable investment for you. In addition, distributions of taxable ordinary income (including any net short-term capital gain) will be taxable to shareholders as ordinary income
(and not eligible for favorable taxation as
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“qualified dividend income”), and capital gain dividends will be taxable as long-term capital gains. The portion of each distribution attributable to capital appreciation is expected to
be higher than that in a typical municipal bond fund. As a result, the level of taxable distributions currently anticipated by the Fund could be significant for Common Stockholders. Unlike a distribution attributable to tax-exempt income, a distribution attributable to capital appreciation would be subject to tax depending on a shareholder’s situation. Interest income on municipal securities also may be subject to state and
local income taxes. See “Tax Matters.”
Taxability
Risk. The Fund will invest in municipal securities in reliance at the time of purchase on an opinion of bond counsel to the issuer that the interest paid on those securities will be excludable from gross income for regular federal income
tax purposes, and neither Nuveen Asset Management nor any other person will independently verify that opinion. Subsequent to the Fund’s acquisition of such a municipal security, however, the security may be determined to pay, or to have paid,
taxable income. Distributions of taxable ordinary taxable income (including any net short-term capital gain) will be taxable to shareholders as ordinary income (and not eligible for favorable taxation as “qualified dividend income”), and
capital gain dividends will be taxable as long-term capital gains. See “Tax Matters.”
Insurance Risk. The Fund may purchase municipal securities that are secured by insurance, bank credit agreements or escrow
accounts. The credit quality of the companies that provide such credit enhancements will affect the value of those securities. Certain significant providers of insurance for municipal securities have incurred significant losses as a result of
exposure to sub-prime mortgages and other lower credit quality investments that have experienced defaults or otherwise suffered extreme credit deterioration. As a result, such losses have reduced the
insurers’ capital and called into question their continued ability to perform their obligations under such insurance if they are called upon to do so in the future. While an insured municipal security will typically be deemed to have the rating
of its insurer, if the insurer of a municipal security suffers a downgrade in its credit rating or the market discounts the value of the insurance provided by the insurer, the rating of the underlying municipal security will be more relevant and the
value of the municipal security would more closely, if not entirely, reflect such rating. In such a case, the value of insurance associated with a municipal security would decline and may not add any value. The insurance feature of a municipal
security does not guarantee the full payment of principal and interest through the life of an insured obligation, the market value of the insured obligation or the net asset value represented by such insured obligation.
Tobacco Settlement Bond Risk. Tobacco settlement bonds are
municipal securities that are backed solely by expected revenues to be derived from lawsuits involving tobacco related deaths and illnesses which were settled between certain states and American tobacco companies. Tobacco settlement bonds are
secured by an issuing state’s proportionate share in the Master Settlement Agreement (“MSA”). The MSA is an agreement reached out of court in November 1998 between 46 states and nearly all of the U.S. tobacco manufacturers. Under the
terms of the MSA, the actual amount of future settlement payments by tobacco manufacturers is dependent on many factors, including, but not limited to, annual domestic cigarette shipments, reduced cigarette consumption, increased taxes on
cigarettes, inflation, financial capability of tobacco companies, continuing litigation and the possibility of tobacco manufacturer bankruptcy. Payments made by tobacco manufacturers could be negatively impacted if the decrease in tobacco
consumption is significantly greater than the forecasted decline.
Valuation Risk. The municipal securities in which the Fund invests typically are valued by a pricing service utilizing a range of
market-based inputs and assumptions, including readily available market quotations obtained from broker-dealers making markets in such instruments, cash flows and transactions for comparable instruments. There is no assurance that the Fund will be
able to sell a portfolio security at the price established by the pricing service, which could result in a loss to the Fund. Pricing services generally price municipal securities assuming orderly transactions of an institutional “round
lot” size, but some trades may occur in smaller, “odd lot” sizes, often at lower prices than institutional round lot trades. Different pricing services may incorporate different assumptions and inputs into their valuation
methodologies, potentially resulting in different values for the same securities. As a result, if the Fund were to change pricing services, or if the Fund’s pricing service were to change
35
its valuation methodology, there could be a material impact, either positive or negative, on the Fund’s net asset value.
Other Investment Companies Risk. The Fund may invest in
the securities of other investment companies, including ETFs. Investing in an investment company exposes the Fund to all of the risks of that investment company’s investments. 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. As a result, the cost of investing in
investment company shares may exceed the costs of investing directly in its underlying investments. Nuveen Fund Advisors will take expenses into account when evaluating the investment merits of an investment in an investment company relative to
available municipal security investments.
The Fund will consider
the investments of underlying investment companies when determining compliance with Rule 35d-1 under the 1940 Act. Moreover, the Fund will consider the investments of underlying investment companies when
determining compliance with its own concentration policy, to the extent the Fund has sufficient information about such investments.
In addition, securities of other investment companies may be leveraged. As a result, the Fund may be indirectly exposed to leverage through an
investment in such securities and therefore magnify the Fund’s leverage risk. As described in the Fund’s Prospectus, the net asset value and market value of leveraged shares will be more volatile and the yield to Common Stockholders will
tend to fluctuate more than the yield generated by unleveraged shares.
With respect to ETFs, an ETF that is based on a specific index may not be able to replicate and maintain exactly the composition and relative
weighting of securities in the index. The value of an ETF based on a specific index is subject to change as the values of its respective component assets fluctuate according to market volatility. ETFs typically rely on a limited pool of authorized
participants to create and redeem shares, and an active trading market for ETF shares may not develop or be maintained. The market value of shares of ETFs and closed-end funds may differ from their net asset
value.
Fund Level and Other Risks
Market Discount from Net Asset Value. Shares of closed-end investment companies like the Fund frequently trade at prices lower than their net asset value. This characteristic is a risk separate and distinct from the risk that the Fund’s net asset value could
decrease as a result of investment activities. Whether investors will realize gains or losses upon the sale of the shares of Common Stock will depend not upon the Fund’s net asset value but entirely upon whether the market price of the shares
of Common Stock at the time of sale is above or below the investor’s purchase price for the shares of Common Stock. Furthermore, management may have difficulty meeting the Fund’s investment objective and managing its portfolio when the
underlying securities are redeemed or sold during periods of market turmoil and as investors’ perceptions regarding closed-end funds or their underlying investments change. Because the market price of the
shares of Common Stock will be determined by factors such as relative supply of and demand for the shares of Common Stock in the market, general market and economic circumstances, and other factors beyond the control of the Fund, the Fund cannot
predict whether the shares of Common Stock will trade at, below or above net asset value. The shares of Common Stock are designed primarily for long-term investors, and you should not view the Fund as a vehicle for trading purposes.
Investment and Market Risk. An investment in the Common
Stock is subject to investment risk, including the possible loss of the entire principal amount that you invest. Shares of Common Stock frequently trade at a discount to their net asset value. Your investment in shares of the Fund represents an
indirect investment in the securities owned by the Fund. Your shares at any point in time may be worth less than your original investment, even after taking into account the reinvestment of dividends and distributions, if applicable. Investors bear
a risk
36
of loss to the extent that the price at which they sell their shares is lower than at the time of purchase. The shares of the Fund are designed primarily for long-term investors, and you should
not view the Fund as a vehicle for trading purposes.
Leverage
Risk. The use of leverage involves special risks for Common Stockholders, including the likelihood of greater volatility of net asset value and market price of, and distributions on, the shares of Common Stock than a comparable portfolio
without leverage. The use of leverage in a declining market will likely cause a greater decline in Common Stock net asset value, which may result in a greater decline of the Common Stock price, than if the Fund were not to have used leverage.
The Fund will pay (and Common Stockholders will bear) any costs and
expenses relating to the Fund’s use of leverage, which will result in a reduction in the net asset value of and net income payable with respect to the Common Stock. Because of the costs of leverage, the Fund may incur losses even if the Fund
has positive returns if they are not sufficient to cover the costs of leverage. Nuveen Fund Advisors, based on its assessment of market conditions, may increase or decrease the Fund’s level of leverage. Such changes may impact the Fund’s
distributions and the valuation of the shares of Common Stock in the secondary market. There is no assurance that the Fund will continue to utilize leverage or that the Fund’s use of leverage will be successful. Furthermore, the amount of fees
paid to Nuveen Fund Advisors and Nuveen Asset Management for investment advisory services will be higher if the Fund uses leverage because the fees will be calculated based on the Fund’s Managed Assets, which may create an incentive for Nuveen
Fund Advisors to leverage the Fund or increase the Fund’s leverage. Certain types of leverage used by the Fund may result in the Fund being subject to certain covenants, asset coverage or other portfolio composition limits by its lenders,
Preferred Share purchasers, liquidity providers, rating agencies that may rate the preferred securities, or reverse repurchase counterparties. Such limitations may be more stringent than those imposed by the 1940 Act and may affect whether the Fund
is able to maintain its desired amount of leverage. At this time, Nuveen Fund Advisors does not believe that any such potential investment limitations will impede it from managing the Fund’s portfolio in accordance with its investment objective
and policies. See “Use of Leverage.” The Fund may invest in the securities of other investment companies, which may themselves be leveraged and therefore present similar risks to those described above and magnify the Fund’s leverage
risk. The risk of loss attributable to the Fund’s use of leverage is borne by Common Stockholders.
Litigation Risk. From time to time, the Fund, Nuveen Fund Advisors and/or Nuveen Asset Management may be subject to pending or
threatened litigation or regulatory action. Some of these claims may result in significant defense costs and potentially significant judgments. The ultimate outcome of any potential litigation or regulatory action or any claims that may arise in the
future cannot be predicted and the reputation of the Fund, Nuveen Fund Advisors and/or Nuveen Asset Management could be damaged as a result. Certain litigation or regulatory scrutiny could materially adversely affect the Fund. The resolution of
certain claims may result in significant fines, judgments, or settlements, which, if partially or completely uninsured, could adversely impact the Fund or the ability of Nuveen Fund Advisors and/or Nuveen Asset Management to perform their duties to
the Fund.
Global Economic Risk. The market value of
the Fund’s investments may go up or down, sometimes rapidly or unpredictably and for short or extended periods of time. Market values may change due to the particular circumstances of individual issuers or due to general conditions impacting
issuers more broadly within a specific country, region, industry, sector or asset class. National and regional economies and financial markets are becoming increasingly interconnected, which increases the possibilities that conditions in one
country, region or market might adversely impact issuers in a different country, region or market. Changes in legal, political, regulatory, tax and economic conditions may cause fluctuations in markets and securities prices around the world, which
could negatively impact the value of the Fund’s investments. Major economic or political disruptions, particularly in large economies like China’s, may have global negative economic and market repercussions. As a result, the value of the
Fund’s investments may be negatively affected whether or not the Fund invests in a country or region directly impacted by such conditions or events.
37
Additionally, unexpected events and their aftermaths, including broad financial dislocations
(such as the “great recession” of 2008-09), war, armed conflict (such as Russia’s invasion of Ukraine in February of 2022), terrorism, the imposition of economic sanctions, natural and
environmental disasters and the spread of infectious illnesses or other public health emergencies (such as the COVID-19 coronavirus pandemic first detected in December of 2019), may adversely affect the global
economy and the markets and issuers in which the Fund invests. These events could reduce consumer demand or economic output, result in market closure, travel restrictions or quarantines, or wide-spread unemployment, and generally have a severe
negative impact on the global economy. Such events could also impair the information technology and other operational systems upon which the Fund’s service providers, including Nuveen Fund Advisors and Nuveen Asset Management, rely, and could
otherwise disrupt the ability of employees of the Fund’s service providers to perform essential tasks on behalf of the Fund. Furthermore, such events could cause financial markets to experience elevated or even extreme volatility and losses,
and could result in the disruption of trading and the reduction of liquidity in many instruments. In addition, sanctions and other measures could limit or prevent the Fund from buying and selling securities (in sanctioned countries and other
markets), significantly delay or prevent the settlement of securities transactions, and significantly impact liquidity and performance.
Governmental and quasi-governmental authorities and regulators throughout the world have in the past responded to major economic disruptions
with a variety of significant fiscal and monetary policy changes, including but not limited to, direct capital infusions into companies, new monetary programs and dramatically lower interest rates. An unexpected or quick reversal of these policies,
or the ineffectiveness of these policies, could increase volatility in securities markets, which could adversely affect the Fund’s investments. In addition, there is a possibility that the rising prices of goods and services may have an effect
on the Fund. As inflation increases, the value of the Fund’s assets may decline.
Legislation and Regulatory Risk. At any time after the date of this prospectus, legislation or additional regulations may be
enacted that could negatively affect the assets of the Fund, securities held by the Fund or the issuers of such securities. Changing approaches to regulation may have a negative impact on the entities and/or securities in which the Fund invests.
Legislation or regulation may also change the way in which the Fund itself is regulated. Fund shareholders may incur increased costs resulting from such legislation or additional regulation. There can be no assurance that future legislation,
regulation or deregulation will not have a material adverse effect on the Fund or will not impair the ability of the Fund to achieve its investment objective.
The SEC’s recently adopted Rule 18f-4 under the 1940 Act, governing the use of derivatives by
registered investment companies, could affect the nature and extent of derivatives used by the Fund. The full impact of such rules is uncertain at this time. Rule 18f-4 could limit the implementation of the
Fund’s use of derivatives, which could have an adverse impact on the Fund.
Anti-Takeover Provisions. The Fund’s organizational documents include provisions that could limit the ability of other
entities or persons to acquire control of the Fund or convert the Fund to open-end status. These provisions could have the effect of depriving the Common Stockholders of opportunities to sell their shares of
Common Stock at a premium over the then-current market price of the shares of Common Stock. See “Certain Provisions in the Articles of Incorporation and By-Laws.”
Potential Conflicts of Interest Risk. Nuveen Fund Advisors
and Nuveen Asset Management each provide a wide array of portfolio management and other asset management services to a mix of clients and may engage in ordinary course activities in which their respective interests or those of their clients may
compete or conflict with those of the Fund. In certain circumstances, and subject to its fiduciary obligations under the Investment Advisers Act of 1940, Nuveen Asset Management may have to allocate a limited investment opportunity among its
clients, which include closed-end funds, open-end funds and other commingled funds. Nuveen Fund Advisors and Nuveen Asset Management have each adopted policies and
procedures designed to address such situations and other potential conflicts of interests.
38
Economic and Political Events Risk. The Fund may be more sensitive to adverse
economic, business or political developments if it invests a substantial portion of its assets in the municipal securities of similar projects (such as those relating to the education, health care, housing, transportation, or utilities industries),
industrial development bonds, or in particular types of municipal securities (such as general obligation bonds, private activity bonds or moral obligation bonds). Such developments may adversely affect a specific industry or local political and
economic conditions, and thus may lead to declines in the creditworthiness and value of such municipal securities.
Cybersecurity Risk. The Fund and its service providers are susceptible to operational and information security risk resulting from
cyber incidents. Cyber incidents refer to both intentional attacks and unintentional events including: processing errors, human errors, technical errors including computer glitches and system malfunctions, inadequate or failed internal or external
processes, market-wide technical-related disruptions, unauthorized access to digital systems (through “hacking” or malicious software coding), computer viruses, and cyber-attacks which shut down, disable, slow or otherwise disrupt
operations, business processes or website access or functionality (including denial of service attacks). Cyber incidents could adversely impact the Fund and cause the Fund to incur financial loss and expense, as well as face exposure to regulatory
penalties, reputational damage, and additional compliance costs associated with corrective measures. Cyber incidents may cause the Fund or its service providers to lose proprietary information, suffer data corruption, lose operational capacity or
fail to comply with applicable privacy and other laws. Among other potentially harmful effects, cyber incidents also may result in theft, unauthorized monitoring and failures in the physical infrastructure or operating systems that support the Fund
and its service providers. In addition, substantial costs may be incurred in order to prevent any cyber incidents in the future. While the Fund’s service providers have established business continuity plans in the event of, and risk management
systems to prevent, such cyber incidents, there are inherent limitations in such plans and systems including the possibility that certain risks have not been identified. Furthermore, the Fund cannot control the cybersecurity plans and systems put in
place by its service providers or any other third parties whose operations may affect the Fund.
Unrated Securities Risk. The Fund may purchase securities that are not rated by any rating organization. Nuveen Asset Management
may, after assessing such securities’ credit quality, internally assign ratings to certain of those securities in categories similar to those of rating organizations. Some unrated securities may not have an active trading market or may be
difficult to value, which means the Fund might have difficulty selling them promptly at an acceptable price. To the extent that the Fund invests in unrated securities, the Fund’s ability to achieve its investment objective will be more
dependent on Nuveen Asset Management’s credit analysis than would be the case when the Fund invests in rated securities.
Counterparty Risk. The Fund will be subject to credit risk with respect to the counterparties to the derivative transactions
entered into by the Fund. Changes in the credit quality of the companies that serve as the Fund’s counterparties with respect to derivatives transactions may affect the value of those instruments. Because certain derivative transactions in
which the Fund may engage may be traded between counterparties based on contractual relationships, the Fund is subject to the risk that a counterparty will not perform its obligations under the related contracts. If a counterparty becomes bankrupt
or otherwise becomes unable to perform its obligations due to financial difficulties the Fund may sustain losses (including the full amount of its investment), may be unable to liquidate a derivatives position or may experience significant delays in
obtaining any recovery in bankruptcy or other reorganization proceedings. By entering into derivatives transactions, the Fund assumes the risk that its counterparties could experience such financial hardships. Although the Fund intends to enter into
transactions only with counterparties that Nuveen Fund Advisors believes to be creditworthy, there can be no assurance that a counterparty will not default and that the Fund will not sustain a loss on a transaction. In the event of a
counterparty’s bankruptcy or insolvency, any collateral posted by the Fund in connection with a derivatives transaction may be subject to the conflicting claims of that counterparty’s creditors, and the Fund may be exposed to the risk of a
court treating the Fund as a general unsecured creditor of the counterparty, rather than as the owner of the collateral.
39
The counterparty risk for cleared derivatives is generally lower than for uncleared OTC
derivative transactions. In a cleared derivative transaction, generally, a clearing organization becomes substituted for each counterparty to a cleared derivative contract and each party to a trade looks only to the clearing organization for
performance of financial obligations under the derivative contract. In effect, the clearing organization guarantees a party’s performance under the contract. However, there can be no assurance that a clearing organization, or its members, will
satisfy its obligations to the Fund, or that the Fund would be able to recover the full amount of assets deposited on its behalf with the clearing organization in the event of the default by the clearing organization or the Fund’s clearing
broker. In addition, cleared derivative transactions benefit from daily marking-to-market and settlement, and minimum capital requirements applicable to intermediaries.
Uncleared OTC derivative transactions generally do not benefit from such protections. As a result, for uncleared OTC derivative transactions, there is the risk that a counterparty will not settle a transaction in accordance with its terms and
conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem, thus causing the Fund to suffer a loss. This risk is heightened for contracts with longer maturities where events
may intervene to prevent settlement, or where the Fund has concentrated its transactions with a single or small group of counterparties.
Risks Related to the Fund’s Clearing Broker and Central Clearing Counterparty. The Commodity Exchange Act (the
“CEA”) requires swaps and futures clearing brokers registered as “futures commission merchants” to segregate all funds received from customers with respect to any orders for the purchase or sale of U.S. domestic futures contracts
and cleared swaps from the brokers’ proprietary assets. Similarly, the CEA requires each futures commission merchant to hold in separate secure accounts all funds received from customers with respect to any orders for the purchase or sale of
foreign futures contracts and cleared swaps and segregate any such funds from the funds received with respect to domestic futures contracts. However, all funds and other property received by a clearing broker from its customers are held by the
clearing broker on a commingled basis in an omnibus account and may be invested in certain instruments permitted under applicable regulations. There is a risk that assets deposited by the Fund with any swaps or futures clearing broker as margin for
futures contracts or cleared swaps may, in certain circumstances, be used to satisfy losses of other clients of the Fund’s clearing broker. In addition, the assets of the Fund might not be fully protected in the event of the Fund’s
clearing broker’s bankruptcy, as the Fund would be limited to recovering only a pro rata share of all available funds segregated on behalf of the clearing broker’s customers for the relevant account class.
Similarly, the CEA requires a clearing organization approved by the
CFTC as a derivatives clearing organization to segregate all funds and other property received from a clearing member’s clients in connection with domestic cleared derivative contracts from any funds held at the clearing organization to support
the clearing member’s proprietary trading. Nevertheless, all customer funds held at a clearing organization in connection with any futures contracts are held in a commingled omnibus account and are not identified to the name of the clearing
member’s individual customers. All customer funds held at a clearing organization with respect to cleared swaps of customers of a clearing broker are also held in an omnibus account, but CFTC rules require that the clearing broker notify the
clearing organization of the amount of the initial margin provided by the clearing broker to the clearing organization that is attributable to each customer. With respect to futures and options contracts, a clearing organization may use assets of a non-defaulting customer held in an omnibus account at the clearing organization to satisfy payment obligations of a defaulting customer of the clearing member to the clearing organization. With respect to cleared
swaps, a clearing organization generally cannot do so, but may do so if the clearing member does not provide accurate reporting to the clearing organization as to the attribution of margin among its clients. Also, since clearing brokers generally
provide to clearing organizations the net amount of variation margin required for cleared swaps for all of its customers in the aggregate, rather than the gross amount of each customer, the Fund is subject to the risk that a clearing organization
will not make variation margin payments owed to the Fund if another customer of the clearing member has suffered a loss and is in default. As a result, in the event of a default or the clearing broker’s other clients or the clearing
broker’s failure to extend its own funds in connection with any such default, the Fund may not be able to recover the full amount of assets deposited by the clearing broker on behalf of the Fund with the clearing organization.
40
Portfolio Turnover Risk. The Fund’s annual portfolio turnover rate may vary
greatly from year to year, as well as within a given year. The portfolio turnover rate is not considered a limiting factor in the execution of investment decisions for the Fund. High portfolio turnover may result in the realization of net short-term
capital gains by the Fund which, when distributed to shareholders, will be taxable as ordinary income. In addition, a higher portfolio turnover rate would result in correspondingly greater brokerage and other transactional expenses that are borne by
the Fund.
Rating Agencies Risk. Rating agencies may
fail to make timely changes in credit ratings and an issuer’s current financial condition may be better or worse than a rating indicates. In addition, rating agencies are subject to an inherent conflict of interest because they are often
compensated by the same issuers whose securities they grade.
41
MANAGEMENT OF THE FUND
Directors and Officers
The Board is responsible for the management of the Fund, including
supervision of the duties performed by Nuveen Fund Advisors and Nuveen Asset Management. The names and business addresses of the directors 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 SAI.
Investment
Adviser, Sub-Adviser and Portfolio Manager
Investment Adviser. Nuveen Fund Advisors, LLC, the Fund’s investment adviser, is responsible for overseeing the Fund’s
overall investment strategy and implementation. Nuveen Fund Advisors offers advisory and investment management services to a broad range of investment company clients. Nuveen Fund Advisors has overall responsibility for management of the Fund,
oversees the management of the Fund’s portfolio, manages the Fund’s business affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois
60606. Nuveen Fund Advisors is an indirect subsidiary of Nuveen, the investment management arm of TIAA. TIAA is a life insurance company founded in 1918 by the Carnegie Foundation for the Advancement of Teaching and is the companion organization of
College Retirement Equities Fund. As of June 30, 2023, Nuveen managed approximately $1.2 trillion in assets, of which approximately $140.9 billion was managed by Nuveen Fund Advisors.
Sub-Adviser. Nuveen Asset Management, LLC, 333 West Wacker Drive, Chicago, Illinois
60606, serves as the Fund’s sub-adviser pursuant to a sub-advisory agreement between Nuveen Fund Advisors and Nuveen Asset Management (the “Sub-Advisory Agreement”). Nuveen Asset Management, a registered investment adviser, is a wholly owned subsidiary of Nuveen Fund Advisors. Nuveen Asset Management oversees day-to-day investment operations of the Fund. Pursuant to the Sub-Advisory Agreement, Nuveen Asset Management is compensated for the services it provides to the Fund
with a portion of the management fee Nuveen Fund Advisors receives from the Fund. Nuveen Fund Advisors and Nuveen Asset Management retain the right to reallocate investment advisory responsibilities and fees between themselves in the future.
Portfolio Manager. Nuveen Asset Management is responsible for
the execution of specific investment strategies and day-to-day investment operations of the Fund. Nuveen Asset Management manages the Nuveen funds using a team of
analysts and portfolio managers that focuses on a specific group of funds. The day-to-day operation of the Fund and the execution of its specific investment strategies
is the primary responsibility of Christopher L. Drahn, the designated portfolio manager of the Fund.
Christopher L. Drahn, CFA, manages tax-exempt fixed income portfolios as well as mutual funds and closed-end funds. He began working in the investment industry when he joined the firm in 1980. Chris became a portfolio manager in 1988. He received a B.A. from Wartburg College and an M.B.A. in finance from the
University of Minnesota. Chris holds the Chartered Financial Analyst designation and is a member of the CFA Institute, the Minnesota Society of Municipal Analysts and the CFA Society of Minnesota.
Additional information about the Portfolio Manager’s compensation,
other accounts managed by the Portfolio Manager and the Portfolio Manager’s ownership of securities in the Fund is provided in the SAI. The SAI is available free of charge by calling (800) 257-8787 or by
visiting the Fund’s website at www.nuveen.com. The information contained in, or that can be accessed through, the Fund’s website is not part of this Prospectus or the SAI, except to the extent specifically incorporated by reference herein
or in the SAI.
Investment Management and
Sub-Advisory Agreements
Investment Management Agreement. Pursuant to an investment management agreement between Nuveen Fund Advisors and the Fund (the
“Investment Management Agreement”), the Fund has agreed to pay an annual
42
management fee for the services and facilities provided by Nuveen Fund Advisors, payable on a monthly basis, based on the sum of a fund-level fee and a complex-level fee, as described below.
Fund-Level Fee. The annual fund-level fee
for the Fund, payable monthly, is calculated according to the following schedule:
|
|
|
|
|
| Average Daily Net Assets
|
|
Fund-Level
Fee Rate
|
|
| For the first $125 million |
|
|
0.4500 |
% |
| For the next $125 million |
|
|
0.4375 |
% |
| For the next $250 million |
|
|
0.4250 |
% |
| For the next $500 million |
|
|
0.4125 |
% |
| For the next $1 billion |
|
|
0.4000 |
% |
| For the next $3 billion |
|
|
0.3750 |
% |
| For net assets over $5 billion |
|
|
0.3625 |
% |
Complex-Level
Fee. The annual complex-level fee for the Fund, payable monthly, is calculated by multiplying the current complex-wide fee rate, determined according to the following schedule, by the Fund’s daily net assets:
|
|
|
|
|
| Complex-Level Eligible Asset Breakpoint
Level*
|
|
Effective
Complex-Level
Fee
Rate at
Breakpoint
Level
|
|
| $55 billion |
|
|
0.2000 |
% |
| $56 billion |
|
|
0.1996 |
% |
| $57 billion |
|
|
0.1989 |
% |
| $60 billion |
|
|
0.1961 |
% |
| $63 billion |
|
|
0.1931 |
% |
| $66 billion |
|
|
0.1900 |
% |
| $71 billion |
|
|
0.1851 |
% |
| $76 billion |
|
|
0.1806 |
% |
| $80 billion |
|
|
0.1773 |
% |
| $91 billion |
|
|
0.1691 |
% |
| $125 billion |
|
|
0.1599 |
% |
| $200 billion |
|
|
0.1505 |
% |
| $250 billion |
|
|
0.1469 |
% |
| $300 billion |
|
|
0.1445 |
% |
| * |
The complex-level fee is calculated based upon the aggregate daily “eligible assets” of all Nuveen open-end and closed-end funds. Eligible assets do not include assets attributable to investments in other Nuveen funds or assets in excess of a determined amount (originally
$2 billion) added to the Nuveen fund complex in connection with Nuveen Fund Advisors’ assumption of the management of the former First American Funds effective January 1, 2011, but do include certain assets of certain Nuveen funds that
were reorganized into funds advised by an affiliate of Nuveen Fund Advisors during the 2019 calendar year. Eligible assets include closed-end fund assets managed by Nuveen Fund Advisors that are attributable
to certain types of leverage. For these purposes, leverage includes the closed-end funds’ use of preferred stock and borrowings and certain investments in the residual interest certificates (also called
inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by the TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by
Nuveen Fund Advisors as to certain funds to limit the amount of such assets for determining eligible assets in certain circumstances. As of August 31, 2023, the complex-level fee rate for the Fund was 0.1600%. |
43
In addition to the fee of Nuveen Fund Advisors, the Fund pays all other costs and expenses of its
operations, including compensation of its directors (other than those affiliated with Nuveen Fund Advisors and Nuveen Asset Management), custodian, transfer agency and dividend disbursing expenses, legal fees, expenses of independent auditors,
expenses of repurchasing shares, expenses associated with any borrowings, expenses of preparing, printing and distributing shareholder reports, notices, proxy statements and reports to governmental agencies, and taxes, if any. All fees and expenses
are accrued daily and deducted before payment of dividends to investors.
A discussion regarding the basis for the Board’s most recent approval of the Investment Management Agreement for the Fund may be found in
the Fund’s annual report to shareholders dated October 31 of each year.
Sub-Advisory Agreement. Pursuant to the
Sub-Advisory Agreement, Nuveen Asset Management receives from Nuveen Fund Advisors a management fee equal to 71.4286% of Nuveen Fund Advisors’ net management fee from the Fund. Nuveen Fund Advisors and
Nuveen Asset Management retain the right to reallocate investment advisory responsibilities and fees between themselves in the future.
A discussion regarding the basis for the Board’s most recent approval of the Sub-Advisory
Agreement may be found in the Fund’s annual report to shareholders dated October 31 of each year.
NET ASSET VALUE
The Fund’s NAV per share is determined as of the close of trading (normally 4:00 p.m. Eastern time) on each day the New York Stock
Exchange is open for business. NAV is calculated by taking the market value of the Fund’s total assets, less all liabilities, and dividing by the total number of shares outstanding. The result, rounded to the nearest cent, is the NAV per share.
The Fund utilizes independent pricing services approved by the
Board to value portfolio instruments at their market value. Independent pricing services typically value non-equity portfolio instruments utilizing a range of market-based inputs and assumptions, including
readily available market quotations obtained from broker-dealers making markets in such instruments, cash flows and transactions for comparable instruments. In valuing municipal securities, the pricing services may also consider, among other
factors, the yields or prices of municipal securities of comparable quality, type of issue, coupon, maturity and rating and the obligor’s credit characteristics considered relevant by the pricing service or Nuveen Fund Advisors. In pricing
certain securities, particularly less liquid and lower quality securities, the pricing services may consider information about a security, its issuer or market activity provided by Nuveen Fund Advisors or Nuveen Asset Management.
If a price cannot be obtained from a pricing service or other pre-approved source, or if the Fund’s valuation designee deems such price to be unreliable, or if a significant event occurs after the close of the local market but prior to the time at which the Fund’s
NAV is calculated, a portfolio instrument will be valued at its fair value as determined in good faith by the Fund’s valuation designee. The Fund’s valuation designee may determine that a price is unreliable in various circumstances. For
example, a price may be deemed unreliable if it has not changed for an identified period of time, or has changed from the previous day’s price by more than a threshold amount, and recent transactions and/or broker dealer price quotations differ
materially from the price in question.
The Board has designated
Nuveen Fund Advisors as the Fund’s valuation designee pursuant to Rule 2a-5 under the 1940 Act and delegated to Nuveen Fund Advisors the
day-to-day responsibility of making fair value determinations. All fair value determinations made by Nuveen Fund Advisors are subject to review by the Board. As a
general principle, the fair value of a portfolio instrument is the amount that an owner might reasonably expect to receive upon the instrument’s current sale. A range of factors and analysis may be considered when determining fair value,
including relevant market data, interest rates, credit considerations and/or issuer specific news. However, fair valuation involves subjective judgments, and it is possible that the fair value determined for a portfolio instrument may be materially
different from the value that could be realized upon the sale of that instrument.
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DISTRIBUTIONS
The Fund pays regular monthly cash distributions to shareholders of
Common Stock at a level rate (stated in terms of a fixed cents per share of Common Stock dividend rate) that reflects the past and projected performance of the Fund. Distributions can only be made from net investment income after paying any interest
and required principal payments on borrowings. Although it does not now intend to do so, the Board may change the Fund’s dividend policy and the amount or timing of the distributions, based on a number of factors, including the amount of the
Fund’s undistributed net investment income and historical and projected investment income.
The Fund’s ability to maintain a level dividend rate will depend on a number of factors. The net income of the Fund includes all interest
income accrued on portfolio assets less all expenses of the Fund. Expenses of the Fund are accrued each day. For each taxable year, the Fund will distribute all or substantially all of its net investment income (including any ordinary taxable
income) and net capital gain (which is the excess of net long-term capital gain over net short-term capital loss) to Common Stockholders so long as the net investment income and net capital gain are not necessary to pay any interest and required
principal payments on borrowings.
The Fund might not distribute
all or a portion of any net capital gain for a taxable year. If the Fund does not distribute all of its net capital gain for a taxable year, it will pay federal income tax on the retained gain. Provided that the Fund satisfies certain requirements,
each Common Stockholder of record as of the end of the Fund’s taxable year (i) will include in income for federal income tax purposes as a long-term capital gain, his or her share of the retained gain, (ii) will be deemed to have paid
his or her proportionate share of tax paid by the Fund on such retained gain, and (iii) will be entitled to an income tax credit or refund for that share of the tax. The Fund will treat the retained capital gains as a substitute for equivalent
cash distributions. While not currently anticipated, if the Fund makes total distributions for a taxable year in an amount that exceeds the Fund’s earnings and profits, the excess would generally be treated by Common Stockholders as a return of
capital for tax purposes. A return of capital reduces a shareholder’s tax basis, which could result in higher taxes when the shareholder sells his or her shares because it may result in a larger gain or a smaller loss on the sale. This may
cause the shareholder to pay taxes even if he or she sells shares for less than the original price. In the event of a distribution of paid-in capital, shareholders will be receiving their own capital back, net
of the Fund’s fees and expenses. You may elect to reinvest automatically some or all of your distributions in additional shares of Common Stock under the Fund’s Dividend Reinvestment Plan.
The Fund reserves the right to change its distribution policy and the
basis for establishing the rate of its monthly distributions at any time, subject to a finding by the Fund’s Board that such change is in the best interests of the Fund and its Common Stockholders.
DIVIDEND REINVESTMENT PLAN
If your shares of Common Stock are registered directly with the Fund or
if you hold your shares of Common Stock with a brokerage firm that participates in the Fund’s Dividend Reinvestment Plan (the “Plan”), you may elect to have all dividends, including any capital gain dividends, on your Common Stock
automatically reinvested by the Plan Agent (defined below) in additional shares of Common Stock under the Plan. You may elect to participate in the Plan by contacting Nuveen Investor Services at (800)
257-8787. If you do not participate, you will receive all distributions in cash paid by check mailed directly to you or your brokerage firm by State Street Bank and Trust Company as dividend paying agent (the
“Plan Agent”).
If you decide to participate in the Plan,
the number of shares of Common Stock, including fractions, you will receive will be determined as follows:
(1) If shares of Common Stock are trading at or above net asset value at the time of valuation, the Fund will issue new shares
at the then current market price;
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(2) If shares of Common Stock are trading below net asset value at the time of
valuation, the Plan Agent will receive the dividend or distribution in cash and will purchase shares of Common Stock in the open market, on the NYSE or elsewhere, for the participants’ accounts. It is possible that the market price for the
shares of Common Stock may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share paid by the Plan Agent may exceed the market price at the time of valuation, resulting in the purchase of fewer
shares than if the dividend or distribution had been paid in shares of Common Stock issued by the Fund. The Plan Agent will use all dividends and distributions received in cash to purchase shares of Common Stock in the open market within 30 days of
the valuation date. Interest will not be paid on any uninvested cash payments; or
(3) If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the
Fund’s shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued
Fund shares at a price equal to the greater of the shares’ net asset value or 95% of the shares’ market value.
You may withdraw from the Plan at any time by giving written notice to the Plan Agent. If you withdraw or the Plan is terminated, you will
receive whole shares in your account under the Plan and you will receive a cash payment for any fractional share in your account. If you wish, the Plan Agent will sell your shares and send you the proceeds, minus brokerage commissions and a $2.50
service fee.
The Plan Agent maintains all shareholders’
accounts in the Plan and gives written confirmation of all transactions in the accounts, including information you may need for tax records. Upon a repurchase of your shares by the Fund, the Fund (or its administrative agent) may be required to
report to the Internal Revenue Service (“IRS”) and furnish to you cost basis and holding period information for the Fund shares that you purchased on or after January 1, 2012 (“covered shares”).
The Plan Agent will deliver to any participant upon request, without
charge, a certificate or certificates for his full shares of Common Stock. Although, from time to time, a participant may have an undivided fractional interest (computed to three decimal places) in a share of the Fund, and distributions on
fractional shares will be credited to the participant’s account, no certificates for a fractional share will be issued.
For shares of the Fund held in the Plan, you are permitted to elect from among several permitted cost basis methods. In the absence of an
election, the Plan will use first-in first-out (“FIFO”) methodology for tracking and reporting your cost basis on covered shares as its default cost basis
method. The cost basis method you use may not be changed with respect to a repurchase of shares after the settlement date of the repurchase. You should consult your tax advisors to determine the best permitted cost basis method for your tax
situation and to obtain more information about how the cost basis reporting rules apply to you. Shareholders should also carefully review any cost basis information provided to them and make any additional basis, holding period or other adjustments
that are required when reporting these amounts on their federal income tax returns.
Shares of Common Stock in your account will be held by the Plan Agent in non-certificated form. Any
proxy you receive will include all shares of Common Stock you have received under the Plan.
There is no brokerage charge for reinvestment of your dividends or distributions in shares of Common Stock. However, all participants will pay
a pro rata share of brokerage commissions incurred by the Plan Agent when it makes open market purchases.
Automatically reinvesting dividends and distributions does not mean that you do not have to pay income taxes due, if any, upon receiving
dividends and distributions.
If you hold your Common Stock with a
brokerage firm that does not participate in the Plan, you will not be able to participate in the Plan and any dividend reinvestment may be effected on different terms than those described above. Consult your financial advisor for more information.
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The Fund reserves the right to amend or terminate the Plan if in the judgment of the Board the
change is warranted. 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. Additional information about the Plan may be obtained
by writing to State Street Bank and Trust Company, Attn: ComputerShare Nuveen Investments, P.O. Box 43071, Providence, Rhode Island 02940-3071 or by calling (800) 257-8787.
PLAN OF DISTRIBUTION
The Fund may sell shares of the Common Stock offered under this
Prospectus directly to one or more purchasers, to or through underwriters, through dealers or agents that the Fund designates from time to time, or through a combination of these methods. In connection with any offering of Common Stock, the Fund
will deliver a prospectus supplement describing such offering, including, as applicable, the names of any underwriters, dealers or agents and information regarding any applicable purchase price, fee, commission or discount arrangements made with
those underwriters, dealers or agents or the basis upon which such amount may be calculated.
The Fund will bear the expenses of the offering, including but not limited to, the expenses of preparation of the Prospectus and SAI for the
offering and the expense of counsel and auditors in connection with the offering.
The distribution of shares of Common Stock may be effected from time to time in one or more transactions at a fixed price or prices, which may
be changed, at prevailing market prices at the time of sale, at prices related to such prevailing market prices, or at negotiated prices. The sale of shares of Common Stock may be made in transactions that are deemed to be “at the market”
as defined in Rule 415 under the 1933 Act, including sales made directly on the NYSE or sales made to or through a market maker other than on an exchange. The minimum price on any day at which shares of Common Stock may be sold will
not be less than the NAV per share of Common Stock at the time of the offering plus the per share amount of any underwriting commission or discount.
The Fund may sell the shares of Common Stock directly to, and solicit offers from, institutional investors or others who may be deemed to be
underwriters as defined in the 1933 Act for any resales of the securities. No underwriters or agents would be involved in such an offering. The Fund may use electronic media, including the Internet, to sell offered securities directly.
In connection with the sale of the shares of Common Stock,
underwriters or agents may receive compensation from the Fund, or from Nuveen Fund Advisors or its affiliates, in the form of discounts, concessions or commissions. Underwriters may sell the shares of Common Stock to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution
of the shares of Common Stock may be deemed to be underwriters under the 1933 Act, and any discounts and commissions they receive from the Fund, Nuveen Fund Advisors or its affiliates, and any profit realized by them on the resale of the shares
of Common Stock may be deemed to be underwriting discounts and commissions under the 1933 Act. Any such underwriter or agent will be identified and any such compensation received from the Fund, Nuveen Fund Advisors or its affiliates will be
described in the applicable prospectus supplement. The maximum amount of compensation to be received by any Financial Industry Regulatory Authority member or independent broker-dealer will not exceed eight percent (8%) for the sale of any securities
being offered pursuant to Rule 415 under the 1933 Act. The Fund will not pay any compensation to any underwriter or agent in the form of warrants, options, consulting or structuring fees or similar arrangements.
If a prospectus supplement so indicates, the Fund may grant the
underwriters an option to purchase additional shares of Common Stock at the public offering price, less the underwriting discounts and commissions, within a certain number of days (often 30 to 45 days) from the date of the prospectus supplement, to
cover any over-allotments.
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Under agreements into which they may enter with the Fund, underwriters, dealers and agents who
participate in the distribution of shares of Common Stock may be entitled to indemnification by the Fund against certain liabilities, including liabilities under the 1933 Act. Underwriters, dealers and agents may engage in transactions with the
Fund, or perform services for the Fund, in the ordinary course of business.
If so indicated in the applicable prospectus supplement, the Fund will authorize underwriters, or other persons acting as its agents, to
solicit offers by certain institutions to purchase shares of Common Stock from the Fund pursuant to contracts providing for payment and delivery on a future date. Institutions with which such contacts may be made must be approved by the Fund and may
include commercial and savings banks, insurance companies, pension funds, investment companies, educational and charitable institutions and others. The obligation of any purchaser under any such contract will be subject to the condition that the
purchase of the shares of Common Stock shall not, at the time of delivery, be prohibited under the laws of the jurisdiction to which such purchaser is subject. The underwriters and such other agents will not have any responsibility in respect of the
validity or performance of such contracts. Such contracts will be subject only to those conditions set forth in the prospectus supplement, and the prospectus supplement will set forth the commission payable for solicitation of such contracts.
To the extent permitted under the 1940 Act, and the rules and
regulations promulgated thereunder, the underwriters may from time to time act as brokers or dealers and receive fees in connection with the execution of the Fund’s portfolio transactions after the underwriters have ceased to be underwriters
and, subject to certain restrictions, each may act as a broker while it is an underwriter.
The Prospectus and accompanying prospectus supplement in electronic form may be made available on the websites maintained by underwriters. The
underwriters may agree to allocate a number of securities for sale to their online brokerage account holders. Such allocations of securities for Internet distributions will be made on the same basis as other allocations. In addition, securities may
be sold by the underwriters to securities dealers who resell securities to online brokerage account holders.
In order to comply with the securities laws of certain states, if applicable, the shares of Common Stock offered hereby will be sold in such
jurisdictions only through registered or licensed brokers or dealers.
DESCRIPTION OF SHARES
Common Stock
The Articles authorize the issuance of 200,000,000 shares of Common Stock. The Common Stock being offered has a par value of $0.01 per share
and has equal rights to the payment of dividends and the distribution of assets upon liquidation of the Fund. The shares of Common Stock being offered will, when issued, be fully paid and, subject to matters discussed under “Certain Provisions
in the Articles of Incorporation and By-Laws,” non-assessable, and will have no preemptive, conversion or exchange rights or rights to cumulative voting. Each whole
share of Common Stock has one vote with respect to matters upon which a shareholder vote is required, and each fractional share shall be entitled to a proportional fractional vote consistent with the requirements of the 1940 Act and the rules
promulgated thereunder, and will vote together as a single class. As previously noted, unless otherwise approved by shareholders, the Fund will not issue senior securities such as preferred shares or debt instruments. However, if the Fund issues
preferred shares, Common Stockholders will not be entitled to receive any cash distributions from the Fund unless all accrued 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 the distributions. See “—Other Shares” below.
The shares of Common Stock are listed on the NYSE and trade under the symbol “NMI.” The Fund intends to hold annual meetings of
shareholders so long as the Common Stock is listed on a national securities exchange and such meetings are required as a condition to such listing. The Fund will not issue share certificates.
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Unlike open-end funds,
closed-end funds like the Fund do not provide daily redemptions. Rather, if a shareholder determines to buy additional shares of Common Stock or sell shares already held, the shareholder may conveniently do so
by trading on the exchange through a broker or otherwise. Shares of closed-end investment companies may frequently trade on the NYSE at prices lower than net asset value. Shares of closed-end investment companies like the Fund have during some periods traded at prices higher than net asset value and, during other periods, have traded at prices lower than net asset value.
Because the market value of the shares of Common Stock may be
influenced by such factors as dividend levels (which are in turn affected by expenses), dividend stability, net asset value, relative demand for and supply of such shares in the market, general market and economic conditions, and other factors
beyond the Fund’s control, the Fund cannot guarantee you that shares of Common Stock will trade at a price equal to or higher than net asset value in the future. The Common Stock is designed primarily for long-term investors, and investors in
the Common Stock should not view the Fund as a vehicle for trading purposes. See “Repurchase of Fund Shares; Conversion to Open-End Fund” below.
Other Shares
As previously noted, as a fundamental investment policy, the Fund will
not issue senior securities such as preferred shares or debt instruments without the approval of Common Stockholders. However, the Articles authorize the issuance of an unlimited number of preferred shares in one or more classes or series, with
rights as determined by the Board, by action of the Board without the approval of the Common Stockholders. For additional information, see the SAI under “Description of Shares—No Preferred Shares.”
CERTAIN PROVISIONS IN THE ARTICLES OF
INCORPORATION AND BY-LAWS
Shareholder and Director Liability. Under the Minnesota Business Corporation Act, a subscriber for shares or a shareholder of a
corporation is under no obligation to the corporation or its creditors with respect to the shares subscribed for or owned, except to pay the corporation the full agreed-upon consideration for the shares. However, a shareholder who receives a
distribution which is made in violation of the Minnesota Business Corporation Act’s limitations on distributions is liable to the corporation to the extent that the distribution exceeded the amount that properly could have been paid.
The Articles provide that the Fund’s obligations are not binding
upon the Fund’s directors individually, but only upon the Fund’s assets and property and provide for the indemnification of directors individually by the Fund for certain liabilities arising out of the performance of their duties to the
Fund to the maximum extent permitted under Minnesota law. Nothing in the Articles, however, protects a director against any liability to which he or she would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office.
Anti-Takeover Provisions. The Articles include provisions that could limit the ability of other entities or persons to acquire control
of the Fund or to convert the Fund to open-end status. The Articles require the Board be divided into three classes with staggered terms. See the SAI under “Management of the Fund.” This provision in
the Articles could delay for up to two years the replacement of a majority of the Board. Additionally, the Articles require a vote by holders of at least two-thirds of the outstanding Common Stock to authorize
(1) a conversion of the Fund from a closed-end to an open-end investment company, (2) a merger or consolidation of the Fund with any corporation or a
reorganization or recapitalization (3) a sale, lease or transfer of all or substantially all of the Fund’s assets (other than in the regular course of the Fund’s investment activities), (4) a liquidation or dissolution of the
Fund, unless such action has previously been approved, adopted or authorized by the affirmative vote of two-thirds of the total number of directors fixed in accordance with the
By-Laws, or (5) a
49
removal of directors by shareholders, and then only for cause,* in which case the affirmative vote of the holders of at least two-thirds of the Fund’s outstanding Common Stock is required. Approval of shareholders is not required, however, for any transaction, whether deemed a merger, consolidation, reorganization or otherwise whereby
the Fund issues shares in connection with the acquisition of assets (including those subject to liabilities) from any other investment company or similar entity. None of the foregoing provisions may be amended except by the vote of at least two-thirds of the outstanding Common Stock. See the SAI under “Certain Provisions in the Articles of Incorporation.”
The provisions of the Articles described above could have the effect of depriving the Common Stockholders of opportunities to sell their shares
of Common Stock at a premium over the then current market price of the shares of Common Stock by discouraging a third party from seeking to obtain control of the Fund in a tender offer or similar transaction. The overall effect of these provisions
is to render more difficult the accomplishment of a merger or the assumption of control by a third party. They provide, however, 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 Fund’s Board has considered the foregoing anti-takeover provisions and concluded that they are in the best interests of the Fund and
its Common Stockholders.
Reference should be made to the Articles
on file with the SEC for the full text of these provisions.
REPURCHASE OF FUND SHARES; CONVERSION TO OPEN-END FUND
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 shares of Common Stock 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, portfolio credit quality, relative demand for and supply of such shares in the market, general market and economic conditions and other
factors. Because shares of closed-end investment companies may frequently trade at prices lower than net asset value, the Fund’s Board has currently determined that, at least annually, it will consider
action that might be taken to reduce or eliminate any material discount from net asset value in respect of shares of Common Stock, 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 at net asset value, or the conversion of the Fund to an open-end investment company. The Fund cannot assure you that its Board will decide to take any of these actions, or that share
repurchases or tender offers will actually reduce market discount.
If the Fund converted to an open-end investment company, the Common Stock would no longer be listed on
the NYSE. In contrast to a closed-end investment company, shareholders of an open-end investment company may require the company to redeem their shares at any time
(except in certain circumstances as authorized by or under the 1940 Act) at their net asset value, less any redemption charge that is in effect at the time of redemption. As a result, conversion to open-end
status may require changes in the management of the Fund’s portfolio in order to meet the liquidity requirements applicable to open-end funds. Because portfolio securities may have to be liquidated to
meet redemptions, conversion could affect the Fund’s ability to meet its investment objective or to use certain investment policies and techniques described above. If converted to an open-end fund, the
Fund expects to pay all redemptions in cash, but intends to reserve the right to pay redemption requests in a combination of cash or securities. If such partial payment in securities were made, investors may incur brokerage costs in converting such
securities to cash. If the Fund were converted to an open-end fund, it is likely that new shares of Common Stock would be sold at net asset value plus a sales load.
| * |
Vacancies caused by the death, resignation, retirement, removal or disqualification of a trustee may be filled
in any manner that is consistent with the Articles and applicable law. |
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Before deciding whether to take any action if the shares of Common Stock trade below net asset
value, the Board would 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 may determine that, in the interest of the Fund and its shareholders, no action should be taken.
TAX MATTERS
The following information is meant as a general summary for U.S.
shareholders. Please see the SAI for additional information. Investors should rely on their own tax adviser for advice about the particular federal, state and local tax consequences to them of investing in the Fund.
The Fund has elected and intends to qualify each year to be treated as
a RIC under Subchapter M of the Internal Revenue Code. In order to qualify for treatment as a RIC, the Fund must satisfy certain requirements regarding the sources of its income, the diversification of its assets and the distribution of its income.
Provided that the Fund timely distributes its income it is not expected to be subject to federal income tax. The Fund primarily invests in municipal securities issued by states, cities and local authorities and certain possessions and territories of
the United States (such as Puerto Rico or Guam) or municipal securities whose income is otherwise exempt from regular federal income taxes. To qualify to pay exempt-interest dividends, which are treated as items of interest excludable from gross
income for federal income tax purposes, at least 50% of the value of the total assets of the Fund must consist of obligations exempt from regular income tax as of the close of each quarter of the Fund’s taxable year. If the proportion of
taxable investments held by the Fund exceeds 50% of the Fund’s total assets as of the close of any quarter of any Fund taxable year, the Fund would not for that taxable year satisfy the general eligibility test that would otherwise permit it to
pay exempt-interest dividends. Substantially all of the Fund’s dividends paid to you are expected to qualify as “exempt-interest dividends.” A shareholder treats an exempt-interest dividend as interest on state and local bonds exempt
from regular federal income tax. Federal income tax law imposes an alternative minimum tax with respect to individuals, trust and estates. Interest on certain municipal securities, such as certain private activity bonds, is included as an item of
tax preference in determining the amount of a taxpayer’s alternative minimum taxable income. To the extent that the Fund receives income from such municipal securities, a portion of the dividends paid by the Fund, although exempt from regular
federal income tax, will be taxable to shareholders whose tax liabilities are determined under the federal alternative minimum tax. The Fund will annually provide a report indicating the percentage of the Fund’s income attributable to municipal
securities and the percentage includable in federal alternative minimum taxable income.
The exemption from federal income tax for exempt-interest dividends does not necessarily result in exemption for such dividends under the
income or other tax laws of any state or local taxing authority. Some states exempt from state income tax that portion of any exempt-interest dividend that is derived from interest received by a RIC on its holdings of securities of that state and
its political subdivisions and instrumentalities. Therefore, the Fund will report annually to its shareholders the percentage of interest income earned by the fund during the preceding year on tax-exempt
obligations indicating, on a state-by-state basis, the source of such income. Shareholders of the Fund are advised to consult with their own tax advisers about state and
local tax matters.
In addition to exempt-interest dividends, the
Fund may also distribute to its shareholders amounts that are treated as long-term capital gain or ordinary income (which may include short-term capital gains). These distributions are generally subject to regular federal income tax, whether or not
reinvested in additional shares. Capital gain distributions are generally taxable at rates applicable to long-term capital gains regardless of how long a shareholder has held its shares. Long-term capital gains are taxable to non-corporate shareholders at rates of up to 20%. The Fund does not expect that any part of its distributions to shareholders from its investments will qualify for the dividends-received deduction available to
corporate shareholders or as “qualified dividend income,” which is taxable to noncorporate shareholders at reduced maximum U.S. federal income tax rates.
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A 3.8% tax generally applies to all or a portion of the net investment income of a shareholder
who is an individual and not a nonresident alien for federal income tax purposes and who has adjusted gross income (subject to certain adjustments) that exceeds a threshold amount ($250,000 if married filing jointly or if considered a
“surviving spouse” for federal income tax purposes, $125,000 if married filing separately, and $200,000 in other cases). This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that
are estates and trusts. For these purposes, interest, dividends and certain capital gains are generally taken into account in computing a shareholder’s net investment income, but exempt-interest dividends are not taken into account.
As a RIC, the Fund will not be subject to federal income tax in any
taxable year provided that it meets certain requirements. As described in “Distributions” above, the Fund might not distribute some (or all) of its net capital gain. If the Fund does not distribute all of its net capital gain and net
investment income, it will be subject to tax at the regular corporate rate on the amount retained. If the Fund retains any net capital gain, it may designate the retained amount as undistributed capital gains in a notice to its shareholders who, if
subject to federal income tax on long-term capital gains, (i) will be required to include in income for federal income tax purposes, as long-term capital gain, their share of such undistributed amount; (ii) will be deemed to have paid
their proportionate shares of the tax paid by the Fund on such undistributed amount and will be entitled to credit that amount of tax against their federal income tax liabilities, if any; and (iii) will be entitled to claim refunds to the
extent the credit exceeds such liabilities. For federal income tax purposes, the tax basis of shares owned by a shareholder of the Fund will be increased by an amount equal to the difference between the amount of undistributed capital gains included
in the shareholder’s gross income and the tax deemed paid by the shareholder.
Dividends declared by the Fund in October, November or December, payable to shareholders of record in such a month, and paid during the
following January will be treated as having been received by shareholders in the year the distributions were declared.
Each shareholder will receive an annual statement summarizing the U.S. federal income tax status of all distributions.
The repurchase, sale or exchange of shares of Common Stock normally
will result in capital gain or loss to holders of Common Stock who hold their shares as capital assets. Generally, a shareholder’s gain or loss will be long-term capital gain or loss if the shares have been held for more than one year even
though the increase in value in such Common Stock may be at least partly attributable to tax-exempt interest income. For non-corporate taxpayers, long-term capital gains
are currently taxed at rates of up to 20%. Short-term capital gains and other ordinary income are taxed to non-corporate taxpayers at ordinary income rates. If a shareholder sells or otherwise disposes of
shares of Common Stock before holding them for six months, any loss on the sale or disposition will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the common shareholder of long-term capital gain
(including any amount credited to the common shareholder as undistributed capital gain). Any loss realized by a shareholder on the disposition of shares held 6 months or less is disallowed to the extent of the amount of exempt-interest dividends
received by the shareholder with respect to Common Stock. Any loss realized on a sale or exchange of shares of the Fund will be disallowed to the extent those shares of the Fund are replaced by substantially identical shares of the Fund (including
shares acquired by reason of participation in the Plan) within a period of 61 days beginning 30 days before and ending 30 days after the date of disposition of the original shares, or to the extent the shareholder enters into a contract or option to
repurchase shares within such period. In that event, the basis of the replacement shares of the Fund will be adjusted to reflect the disallowed loss.
Any interest on indebtedness incurred or continued to purchase or carry the Fund’s shares to which exempt-interest dividends are allocated
is not deductible. Under certain applicable rules, the purchase or ownership of shares may be considered to have been made with borrowed funds even though such funds are not directly used for the purchase or ownership of the shares. In addition, if
you receive social security or certain railroad retirement benefits, you may be subject to U.S. federal income tax on a portion of such benefits as a result of receiving investment income, including exempt-interest dividends and other distributions
paid by the Fund.
52
The Fund may be required to withhold (as “backup withholding”) U.S. federal income tax
for distributions (including exempt-interest dividends) and repurchase proceeds payable to a shareholder if the shareholder fails to provide the Fund with his or her correct taxpayer identification number or to make required certifications, or if
the shareholder has been notified by the IRS that he or she is subject to backup withholding. The backup withholding rate is 24%. Backup withholding is not an additional tax; rather, it is a way in which the IRS ensures it will collect taxes
otherwise due. Any amounts withheld may be credited against a shareholder’s U.S. federal income tax liability.
The Fund may invest a portion of its assets in securities that generate income that is not exempt from federal or state income taxes.
Other State and Local Tax Matters
While exempt-interest dividends are exempt from federal income tax,
they may not be exempt from state or local income or other taxes. Some states exempt from state income tax that portion of any exempt-interest dividend that is derived from interest a RIC receives on its holdings of securities of that state and its
political subdivisions and instrumentalities. Therefore, the Fund will report annually to its shareholders the percentage of interest income the Fund earned during the preceding year on tax-exempt obligations
and the Fund will indicate, on a state-by-state basis, the source of this income. Shareholders are advised to consult with their own tax advisors for more detailed
information concerning tax matters or the tax laws of their state and locality of residence. Please refer to the SAI for more detailed information.
CUSTODIAN AND TRANSFER AGENT
The custodian of the assets of the Fund is State Street Bank and Trust Company, One Congress Street, Suite 1, Boston, Massachusetts 02114-2016
(the “Custodian”). The Custodian performs custodial, fund accounting and portfolio accounting services. The Fund’s transfer, shareholder services and dividend paying agent is Computershare Inc. and Computershare Trust Company, N.A.,
located at 250 Royall Street, Canton, Massachusetts 02021.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP, an independent registered public accounting firm, provides
auditing services to the Fund. The principal business address of KPMG is 200 East Randolph Street, Chicago, Illinois 60601.
LEGAL MATTERS
Certain legal matters in connection with shares of Common Stock will be passed upon for the Fund by Morgan, Lewis & Bockius LLP,
located at 1111 Pennsylvania Avenue, NW, Washington, D.C. Morgan, Lewis & Bockius LLP will rely as to certain matters under Minnesota law on the opinion of Dorsey & Whitney LLP, Minneapolis, Minnesota.
AVAILABLE INFORMATION
The Fund is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) and the 1940 Act and is required to file reports, proxy statements and other information with the SEC. Reports, proxy statements, and other information about the Fund can be inspected
at the offices of the NYSE.
53
This Prospectus does not contain all of the information in the Fund’s Registration
Statement, including amendments, exhibits, and schedules. Statements in this Prospectus about the contents of any contract or other document are not necessarily complete and, in each instance, reference is made to the copy of the contract or other
document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by this reference.
Additional information about the Fund and Common Stock can be found in the Fund’s Registration Statement (including amendments, exhibits,
and schedules) on Form N-2 filed with the SEC. The SEC maintains a web site (http://www.sec.gov) that contains the Fund’s Registration Statement, other documents incorporated by reference, and other
information the Fund has filed electronically with the SEC, including proxy statements and reports filed under the Exchange Act.
INCORPORATION BY REFERENCE
The documents listed below, and any reports and other documents subsequently filed with the SEC pursuant to Section 30(b)(2) of the 1940
Act and Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering will be incorporated by reference into this Prospectus and deemed to be part of this Prospectus from the date of the filing of such reports and
documents:
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The Fund’s SAI, dated [ ], 2023; |
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The Fund’s annual report on Form
N-CSR for the fiscal year ended October 31, 2022; and |
The information incorporated by
reference is considered to be part of this Prospectus, and later information that the Fund files with the SEC will automatically update and supersede this information. Incorporated materials not delivered with the Prospectus may be obtained, without
charge, by calling (800) 257-8787, by writing to the Fund at 333 West Wacker Drive, Chicago, Illinois 60606, or from the Fund’s website (http://www.nuveen.com).
54
STATEMENT OF ADDITIONAL INFORMATION
TABLE OF CONTENTS
55
Until [ ], 2023 (25 days after the date of this prospectus), all dealers that buy, sell or trade shares of the Common Stock, whether
or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments
or subscriptions.
EPR-NMI-0923D
The information in this Statement of Additional Information is not complete and may be
changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Statement of Additional Information is not an offer to sell these securities and is not soliciting an
offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO
COMPLETION, DATED SEPTEMBER 22, 2023
NUVEEN MUNICIPAL INCOME FUND, INC.
333 West Wacker Drive
Chicago,
Illinois 60606
STATEMENT OF ADDITIONAL INFORMATION
[ ], 2023
Nuveen Municipal Income Fund, Inc. (the “Fund”) is a diversified, closed-end management
investment company registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The Fund was incorporated under the laws of the State of Minnesota on February 26, 1988.
This Statement of Additional Information (the “SAI”) relating to shares of common stock of the Fund (“Common Stock”) does
not constitute a prospectus, but should be read in conjunction with the Fund’s prospectus relating thereto dated [ ], 2023 (the “Prospectus”). This SAI does not
include all information that a prospective investor should consider before purchasing such shares. Investors should obtain and read the Prospectus prior to purchasing Common Stock shares. In addition, the Fund’s financial statements and the
independent registered public accounting firm’s report therein included in the Fund’s annual report
dated October 31, 2022, are incorporated herein by reference. The information with respect to the six months ended April
30, 2023 is unaudited and included in the Fund’s 2023 semi-annual report, which is incorporated herein by reference. A copy of the Prospectus may be
obtained without charge by calling (800) 257-8787. You may also obtain a copy of the Prospectus on the U.S. Securities and Exchange Commission’s (the “SEC”) web site (http://www.sec.gov).
Capitalized terms used but not defined in this SAI have the meanings ascribed to them in the Prospectus.
TABLE OF CONTENTS
1
USE OF PROCEEDS
The net proceeds from the issuance of Common Stock hereunder will be invested in accordance with the Fund’s investment objective and
policies as stated below. Pending investment, the timing of which may vary depending on the size of the investment but in no case is expected to exceed 30 days, it is anticipated that the proceeds will be invested in short-term or long-term
securities issued by the U.S. Government and its agencies or instrumentalities or in high quality, short-term money market instruments.
INVESTMENT RESTRICTIONS
Except as described below, the Fund, as a fundamental policy, may not, without the approval of the holders of a majority of the outstanding
Common Stock:
(1) Issue senior securities, as defined in the 1940 Act, except to the extent such issuance might be involved with respect
to borrowings described under subparagraph (2) below or with respect to transactions involving futures contracts or the writing of options within the limits described herein;1
(2) Borrow money, except from banks for temporary or emergency purposes or for repurchase of its shares, and then only in an amount not
exceeding one-third of the value of the Fund’s total assets including the amount borrowed. While any such borrowings exceed 5% of the Fund’s total assets, no additional purchases of investment
securities will be made;1,2
(3)
Underwrite any issue of securities, except to the extent that the purchase of municipal securities in accordance with its investment objective, policies and limitations may be deemed to be an underwriting;
(4) Invest more than 25% of its total assets in securities of issuers in any one industry; provided, however, that such limitations shall not
be applicable to municipal securities issued by governments or political subdivisions of governments, and obligations issued or guaranteed by the United States government, its agencies or instrumentalities;3
(5) Purchase or sell real estate, but this shall not prevent the Fund from investing in
municipal securities secured by real estate or interests therein;
(6) Purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not prevent the Fund from purchasing or selling options, futures contracts or derivative instruments or from investing in securities or other instruments backed by physical
commodities);
1 Section 18(c) of the 1940 Act generally limits a registered closed-end investment company to issuing one class of senior securities representing
indebtedness and one class of senior securities representing stock, except that the class of indebtedness or stock may be issued in one or more series, and promissory notes or other evidences of indebtedness issued in consideration of any loan,
extension, or renewal thereof, made by a bank or other person and privately arranged, and not intended to be publicly distributed, are not deemed a separate class of senior securities.
2 Section 18(a) of the 1940 Act generally prohibits a registered
closed-end fund from incurring borrowings if, immediately thereafter, the aggregate amount of its borrowings exceeds 331/3% of its total assets. The Fund has not applied for, and currently does not intend to apply for, any exemptive relief that would allow it to borrow outside of the limits of the 1940 Act.
3 For purposes of this restriction, governments and their political subdivisions are not members of any
industry.
2
(7) Make loans, except as permitted by the 1940 Act and exemptive orders granted under the 1940
Act;4
(8) Invest more than 5% of its total assets in securities of any one issuer,
except that this limitation shall not apply to securities of the United States government, its agencies and instrumentalities or to the investment of 25% of its total assets;
(9) Pledge, mortgage or hypothecate its assets, except that, to secure borrowings permitted by subparagraph (2) above, it may pledge
securities having a market value at the time of pledge not exceeding 20% of the value of the Fund’s total assets;
(10) Invest more
than 10% of its total assets in repurchase agreements maturing in more than seven days; and
(11) Purchase or retain the securities of any
issuer other than the securities of the Fund if, to the Fund’s knowledge, those directors of the Fund, or those officers and directors of Nuveen Asset Management, LLC (“Nuveen Asset Management”), who individually own beneficially more
than 1/2 of 1% of the outstanding securities of such issuer, together own beneficially more than 5% of such outstanding securities.
In addition to the foregoing investment restrictions, the Fund’s investment objective, the Fund’s policy to invest, under normal
circumstances, at least 80% of its Assets in municipal securities and other related investments, the income from which is exempt from regular federal income tax, and the Fund’s policy not to leverage its capital structure by issuing senior
securities, such as preferred shares or debt instruments, also are considered to be fundamental policies of the Fund. Fundamental policies may not be changed without a vote of a “majority of the outstanding” shares of Common Stock. Under
the 1940 Act, for purposes of the foregoing, a “majority of the outstanding” shares means (i) 67% or more of the shares present at a meeting, if the holders of more than 50% of the shares are present or represented by proxy or
(ii) more than 50% of the shares, whichever is less.
For the purpose of applying the 25% limitation set forth in subparagraph
(4) above, such limitation will apply to tax-exempt municipal securities if the payment of principal and interest for such securities is derived principally from a specific project associated with an
issuer that is not a governmental entity or a political subdivision of a government, and in that situation the Fund will consider such municipal securities to be in an industry associated with the project.
For the purpose of applying the limitation set forth in subparagraph (8) above, an issuer shall be deemed the sole issuer of a security
when its assets and revenues are separate from other governmental entities and its securities are backed only by its assets and revenues. Similarly, in the case of a non-governmental issuer, such as an
industrial corporation or a privately owned or operated hospital, if the security is backed only by the assets and revenues of the non-governmental issuer, then such
non-governmental issuer would be deemed to be the sole issuer. Where a security is also backed by the enforceable obligation of a superior or unrelated governmental or other entity (other than a bond insurer),
it shall also be included in the computation of securities owned that are issued by such governmental or other entity. Where a security is guaranteed by a governmental entity or some other facility, such as a bank guarantee or letter of credit, such
a guarantee or letter of credit would be considered a separate security and would be treated as an issue of such government, other entity or bank. When a municipal bond is insured by bond insurance, it shall not be considered a security that is
issued or guaranteed by the insurer; instead, the issuer of such municipal bond will be determined in accordance with the principles set forth above.
4 Section 21 of the 1940 Act makes it unlawful for a registered investment company, like the Fund, to lend money or other property if (i) the investment company’s policies set forth in
its registration statement do not permit such a loan or (ii) the borrower controls or is under common control with the investment company. The Fund has not applied for, and currently does not intend to apply for, any exemptive relief that would
allow it to make loans outside the limits of the 1940 Act.
3
The foregoing restrictions do not limit the percentage of the Fund’s assets that may be invested in municipal securities insured by any given insurer.
Subject to certain exemptions under the 1940 Act, the Fund may invest only up to 10% of its total assets in the aggregate in shares of other
investment companies and only 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. As a
shareholder in any investment company, the Fund will bear its ratable share of that investment company’s expenses, and will remain subject to payment of the Fund’s management, advisory and administrative fees with respect to assets so
invested. Holders of Common Stock (“Common Stockholders”) 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 be
leveraged and therefore will be subject to the same leverage risks described herein. The Fund will consider the investments of underlying investment companies when determining compliance with Rule 35d-1 under
the 1940 Act and when determining compliance with its own concentration policy, in each case to the extent the Fund has sufficient information about such investments after making a reasonable effort to obtain current information about the
investments of underlying companies.
In addition to the foregoing fundamental policies, the Fund is also subject to the following non-fundamental restrictions and policies, which may be changed by the Board of Directors (the “Board”). The Fund may not:
(1) Sell securities short, unless the Fund owns or has the right to obtain securities equivalent in kind and amount to the securities sold at
no added cost, and provided that transactions in options, futures contracts, options on futures contracts, or other derivative instruments are not deemed to constitute selling securities short;
(2) Purchase securities of open-end or closed-end investment
companies except in compliance with the 1940 Act or any exemptive relief obtained thereunder;
(3) Enter into futures contracts or related
options or forward contracts, if more than 30% of the Fund’s net assets would be represented by futures contracts or more than 5% of the Fund’s net assets would be committed to initial margin deposits and premiums on futures contracts and
related options;
(4) Purchase securities of companies for the purpose of exercising control, except as otherwise permitted in the
Prospectus and this SAI; and
(5) Invest more than 5% of its total assets in unsecured obligations of issuers which, together with their
predecessors, have been in operation less than three years.
Except with respect to the fundamental policy limitation on borrowings, as
set forth in number (2) above, the foregoing restrictions and limitations will apply only at the time of purchase of securities, and the percentage limitations will not be considered violated unless an excess or deficiency occurs or exists
immediately after and as a result of an acquisition of securities, unless otherwise indicated.
The Fund may be subject to certain
restrictions imposed by either guidelines of one or more nationally recognized statistical ratings organizations (“NRSROs”) that may issue ratings for commercial paper or notes, or, if the Fund borrows from a lender, by the lender. These
guidelines may impose asset coverage or portfolio composition requirements that are more stringent than those imposed on the Fund by the 1940 Act. If these restrictions were to apply, it is not anticipated that these covenants or guidelines would
impede Nuveen Fund Advisors, LLC (“Nuveen Fund Advisors”) from managing the Fund’s portfolio in accordance with the Fund’s investment objective and policies.
4
INVESTMENT POLICIES AND TECHNIQUES
The Fund’s investment objective is a high level of current income exempt from federal income tax, which the Fund seeks to achieve by
investing primarily in a diversified portfolio of tax-exempt municipal obligations.
Under normal
circumstances, and as a fundamental policy, the Fund will invest at least 80% of its Assets (as defined below) in municipal securities and other related investments, the income from which is exempt from regular federal income taxes. Under normal
market conditions, the Fund will generally maintain an investment portfolio with an overall weighted average maturity of greater than 10 years.
“Assets” mean the net assets of the Fund plus the amount of any borrowings for investment purposes. “Managed Assets” means
the total assets of the Fund, minus the sum of its accrued liabilities (other than Fund liabilities incurred for the express purpose of creating leverage). Total assets for this purpose shall include assets attributable to the Fund’s use of
leverage (whether or not those assets are reflected in the Fund’s financial statements for purposes of generally accepted accounting principles), and derivatives will be valued at their market value.
The Fund may invest in various municipal securities, including municipal bonds and notes, other securities issued to finance and refinance
public projects, and other related securities and derivative instruments creating exposure to municipal securities that provide for the payment of interest income that is exempt from regular federal income tax (collectively, “municipal
securities”). Municipal securities are often issued by state and local governmental entities to finance or refinance public projects, such as roads, schools, and water supply systems. Municipal securities also may be issued on behalf of private
entities or for private activities, such as housing, medical and educational facility construction, or for privately owned transportation, electric utility and pollution control projects. Municipal securities may be issued on a long-term basis to
provide long-term financing. The repayment of such debt may be secured generally by a pledge of the full faith and credit taxing power of the issuer, a limited or special tax, or any other revenue source, including project revenues, which may
include tolls, fees and other user charges, lease payments, and mortgage payments. Municipal securities also may be issued to finance projects on a short-term interim basis, anticipating repayment with the proceeds of the later issuance of long-term
debt. The Fund may purchase municipal securities in the form of bonds, notes, leases or certificates of participation; structured as callable or non-callable; with payment forms that include fixed coupon,
variable rate, zero coupon, capital appreciation bonds, tender-option bonds and inverse floating rate securities. Such municipal securities may also be acquired through investments in pooled vehicles, partnerships, or other investment companies.
Under normal circumstances:
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The Fund may invest up to 20% of its Managed Assets in municipal securities that pay interest that is taxable
under the federal alternative minimum tax applicable to non-corporate taxpayers (“AMT Bonds”). |
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The Fund will invest at least 80% of its Managed Assets in investment grade quality municipal securities that, at
the time of investment, are rated within the four highest letter grades (Baa or BBB or better) by at least one NRSRO that rates such securities or if it is unrated judged to be of comparable quality by Nuveen Asset Management. A security is
considered investment grade if it is rated within the four highest letter grades by at least one NRSRO that rate such securities (even if rated lower by another), or if it is unrated but judged to be of comparable quality by Nuveen Asset Management
(such securities are commonly referred to as split-rated securities). |
The relative percentages of the value of the
investments attributable to investment grade municipal securities and to below investment grade municipal securities could change over time
5
as a result of rebalancing the Fund’s assets by Nuveen Asset Management, market value fluctuations, issuance of additional shares and other events.
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The Fund may invest up to 20% of its Managed Assets in municipal securities that at the time of investment are
rated below investment grade or are unrated but judged to be of comparable quality by Nuveen Asset Management. No more than 10% of the Fund’s Managed Assets may be invested in municipal securities rated below
B3/B- by all NRSROs that rate the security or that are unrated but judged to be of comparable quality by Nuveen Asset Management. Municipal securities of below investment grade quality are regarded as having
predominantly speculative characteristics with respect to capacity to pay interest and repay principal, and are commonly referred to as junk bonds. |
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The Fund may invest in distressed securities. The Fund may not invest in the securities of an issuer which, at
the time of investment, is in default on its obligations to pay principal or interest thereon when due or that is involved in a bankruptcy proceeding (i.e., rated below C- at the time of investment);
provided, however, that Nuveen Asset Management may determine that it is in the best interest of shareholders in pursuing a workout arrangement with issuers of defaulted securities to make loans to the defaulted issuer or another party, or purchase
a debt, equity or other interest from the defaulted issuer or another party, or take other related or similar steps involving the investment of additional monies, but only if that issuer’s securities are already held by the Fund.
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The Fund may invest up to 25% of its Managed Assets in municipal securities in any one industry or in any one
state of origin. |
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The Fund may invest up to 15% of its Managed Assets in inverse floating rate securities, in order to more
efficiently achieve its desired overall portfolio structure as well as enhance its ability to achieve its investment objective. |
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The Fund may not enter into a futures contract or related options or forward contracts if more than 30% of the
Fund’s Managed Assets would be represented by futures contracts or more than 5% of the Fund’s Managed Assets would be committed to initial margin deposits and premiums on futures contracts or related options. |
The Fund also may invest in certain derivative instruments in pursuit of its investment objective. Such instruments include financial futures
contracts, swap contracts (including interest rate and credit default swaps), options on financial futures, options on swap contracts, or other derivative instruments. Nuveen Asset Management may use derivative instruments to seek to enhance return,
to hedge some of the risk of the Fund’s investments in municipal securities or as a substitute for a position in the underlying asset. These types of strategies may generate taxable income.
With respect to the Fund’s policy to invest at least 80% of its Assets in municipal securities and other related instruments, the income
of which is exempt from regular federal income taxes, for purposes of calculating net assets, the Fund will value eligible derivatives at market value or fair value instead of notional value.
The Fund will consider the investments of underlying investment companies when determining compliance with its own concentration policy and
its policy to invest at least 80% of its Managed Assets (plus any borrowings for investment purposes) in municipal securities, the income of which is exempt from regular federal income taxes, to the extent the Fund has sufficient information about
such investments after making a reasonable effort to obtain current information about the investments of underlying companies.
For
purposes of the Fund’s investment policies, “net assets” includes assets attributable to floating rate securities issued by tender option bond (TOB) trusts of which the Fund owns the inverse floating rate interest and assets
attributable to borrowings for temporary, emergency or other purposes.
6
The credit quality policies noted above apply only at the time a security is purchased, and the
Fund is not required to dispose of a security in the event that a rating agency downgrades its assessment of the credit characteristics of a particular issue. In determining whether to retain or sell such a security, Nuveen Asset Management may
consider such factors as Nuveen Asset Management’s assessment of the credit quality of the issuer of such security, the price at which such security could be sold and the rating, if any, assigned to such security by other rating agencies. A
general description of the ratings of S&P, Moody’s and Fitch of municipal securities is set forth in Appendix A to this SAI.
As
a fundamental policy, the Fund will not leverage its capital structure by issuing senior securities such as preferred stock or debt instruments. However, the Fund may borrow for temporary, emergency or other purposes as permitted by the 1940 Act,
and invest in certain instruments, including inverse floating rate securities, that have the economic effect of financial leverage.
A
more complete description of the Fund’s investment objective and policies is set forth in the Fund’s Prospectus.
In addition to
and supplementing the Prospectus section, “The Fund’s Investments—Portfolio Composition and Other Information,” the Fund’s portfolio will be composed principally of the investments described below.
MUNICIPAL SECURITIES
Municipal
securities are either general obligation or revenue bonds and typically are issued to finance public projects (such as roads or public buildings), to pay general operating expenses or to refinance outstanding debt.
Municipal securities may also be issued on behalf of private entities or for private activities, such as housing, medical and educational
facility construction, or for privately owned industrial development and pollution control projects. General obligation bonds are backed by the full faith and credit, or taxing authority, of the issuer and may be repaid from any revenue source;
revenue bonds may be repaid only from the revenues of a specific facility or source.
The Fund may also purchase municipal securities that
represent lease obligations, municipal notes, pre-refunded municipal bonds, private activity bonds, tender option bonds and other forms of municipal bonds and securities.
Municipal securities of below investment grade quality (Ba/BB or below) are commonly referred to as junk bonds. Issuers of securities rated
Ba/BB or B are regarded as having current capacity to make principal and interest payments but are subject to business, financial or economic conditions which could adversely affect such payment capacity. Municipal securities rated Baa or BBB or
above are considered “investment grade” securities; municipal securities rated Baa are considered medium grade obligations that lack outstanding investment characteristics and have speculative characteristics, while municipal securities
rated BBB are regarded as having adequate capacity to pay principal and interest. Municipal securities rated Aaa or AAA in which the Fund may invest may have been so rated on the basis of the existence of insurance guaranteeing the timely payment,
when due, of all principal and interest. Municipal securities rated below investment grade quality are obligations of issuers that are considered predominately speculative with respect to the issuer’s capacity to pay interest and repay
principal according to the terms of the obligation and, therefore, carry greater investment risk, including the possibility of issuer default and bankruptcy and increased market price volatility. Municipal securities rated below investment grade
tend to be less marketable than higher-quality securities because the market for them is less broad. The market for municipal securities unrated by any NRSRO is even narrower. During periods of thin trading in these markets, the spread between bid
and asked prices is likely to increase significantly and the Fund
7
may have greater difficulty selling its portfolio securities. The Fund will be more dependent on Nuveen Asset Management’s research and analysis when investing in these securities.
The Fund may invest in distressed securities. Distressed securities are securities issued by companies having financial difficulties, such as
being in default on their obligations to pay principal or interest thereon when due or that are involved in bankruptcy or insolvency proceedings. The issuers of such securities may be in transition, out of favor, financially leveraged or troubled,
or potentially troubled, and may be or have recently been involved in major strategic actions, restructurings, bankruptcy, reorganization or liquidation. These characteristics of these issuers can cause their securities to be particularly risky,
although they also may offer the potential for high returns. These issuers’ securities may be considered speculative, and the ability of the issuers to pay their debts on schedule could be affected by adverse interest rate movements, changes in
the general economic climate, economic factors affecting a particular industry or specific developments within the issuers. 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.
Investments in lower rated or unrated securities may present
special tax issues for the Fund to the extent that the issuers of these securities default on their obligations pertaining thereto, and the federal income tax consequences to the Fund as a holder of such distressed securities may not be clear.
A general description of Moody’s, S&P’s and Fitch’s ratings of municipal securities is set forth in Appendix A hereto.
The ratings of Moody’s, S&P and Fitch represent their opinions as to the quality of the municipal securities they rate. It should be emphasized, however, that ratings are general and are not absolute standards of quality. Consequently,
municipal securities with the same maturity, coupon and rating may have different yields while obligations of the same maturity and coupon with different ratings may have the same yield.
Under normal market conditions, the Fund will generally maintain an investment portfolio with an overall weighted average maturity of greater
than 10 years. As of August 31, 2023, the effective maturity of the Fund’s portfolio was 19.60 years.
During temporary
defensive periods (e.g., times when, in Nuveen Asset Management’s opinion, temporary imbalances of supply and demand or other temporary dislocations in the tax-exempt securities market adversely
affect the price at which long-term or intermediate-term municipal securities are available), and in order to keep the Fund’s cash fully invested, including the period during which the net proceeds of an offering are being invested, the Fund
may invest any percentage of its net assets in short-term investments including high quality, short-term securities that may be either tax-exempt or taxable. The Fund intends to invest in taxable short-term
investments only in the event that suitable tax-exempt short-term investments are not available at reasonable prices and yields, as determined by Nuveen Asset Management, and in amounts limited to ensure that
the Fund is eligible to pay exempt-interest dividends (as described in “Tax Matters” below). Tax-exempt short-term investments include various obligations issued by state and local governmental
issuers, such as tax-exempt notes (bond anticipation notes, tax anticipation notes and revenue anticipation notes or other such municipal bonds maturing in three years or less from the date of issuance) and
municipal commercial paper. The Fund will invest only in taxable short-term investments which are U.S. government securities or securities rated within the highest grade by Moody’s, S&P or Fitch, and which mature within one year from the
date of purchase or carry a variable or floating rate of interest. See Appendix A for a general description of Moody’s, S&P’s and Fitch’s ratings of securities in such categories. Taxable short-term investments of the Fund may
include certificates of deposit issued by U.S. banks with assets of at least $1 billion, or commercial paper or corporate notes, bonds or debentures with a remaining maturity of one year or less, or repurchase agreements. To the extent the Fund
invests in taxable investments, the Fund will not at such times be in a position to achieve its investment objective of tax-exempt income.
The foregoing policies as to ratings of portfolio investments will apply only at the time of the purchase of a security, and the Fund will not
be required to dispose of securities in the event Moody’s, S&P or Fitch
8
downgrades its assessment of the credit characteristics of a particular issuer, even if such downgrade causes the portfolio to fall below the 80% threshold. If at any time the Fund falls below
the 80% threshold, the Fund’s future investments will be made in a manner that will bring the Fund’s portfolio back into compliance with this policy. In determining whether to retain or sell such a security, Nuveen Asset Management may
consider such factors as Nuveen Asset Management’s assessment of the credit quality of the issuer of such security, the price at which such security could be sold and the rating, if any, assigned to such security by other rating agencies. See
“—Municipal Securities.” The Fund may also invest in securities of other open- or closed-end investment companies that invest primarily in municipal bonds of the types in which the Fund may
invest directly. See “—Other Investment Companies.”
Obligations of issuers of municipal securities are subject to the
provisions of bankruptcy, insolvency and other laws affecting the rights and remedies of creditors. In addition, the obligations of such issuers may become subject to the laws enacted in the future by Congress, state legislatures or referenda
extending the time for payment of principal or interest, or both, or imposing other constraints upon enforcement of such obligations or upon municipalities to levy taxes. There is also the possibility that, as a result of legislation or other
conditions, the power or ability of any issuer to pay, when due, the principal of, and interest on, its municipal securities may be materially affected.
The Fund may invest up to 25% of its total assets in municipal securities in any one industry or in any one state of origin. In addition,
subject to the concentration limits of the Fund’s investment policies and guidelines, the Fund may invest a significant portion of its total assets in certain sectors of the municipal securities market, such as hospitals and other health care
facilities, charter schools and other private educational facilities, special taxing districts and start-up utility districts and private activity bonds including industrial development bonds on behalf of
transportation companies such as airline companies, whose credit quality and performance may be more susceptible to economic, business, political, regulatory and other developments than other sectors of municipal issuers. If the Fund invests a
significant portion of its total assets in the sectors noted above, the Fund’s performance may be subject to additional risk and variability. To the extent that the Fund focuses its total assets in the hospital and healthcare facilities sector,
for example, the Fund will be subject to risks associated with such sector, including adverse government regulation and reduction in reimbursement rates, as well as government approval of products and services and intense competition. Securities
issued with respect to special taxing districts will be subject to various risks, including real-estate development related risks and taxpayer concentration risk. Further, the fees, special taxes or tax allocations and other revenues established to
secure the obligations of securities issued with respect to special taxing districts are generally limited as to the rate or amount that may be levied or assessed and are not subject to increase pursuant to rate covenants or municipal or corporate
guarantees. Charter schools and other private educational facilities will be subject to various risks, including the reversal of legislation authorizing or funding charter schools, the failure to renew or secure a charter, the failure of a funding
entity to appropriate necessary funds and competition from alternatives such as voucher programs. Issuers of municipal utility securities can be significantly affected by government regulation, financing difficulties, supply and demand of services
or fuel and natural resource conservation. The transportation sector, including airports, airlines, ports and other transportation facilities, can be significantly affected by changes in the economy, fuel prices, labor relations, insurance costs and
government regulation.
Tobacco Settlement Bonds. Included in the general category of municipal securities described in the
Prospectus are “tobacco settlement bonds.” The Fund may invest in tobacco settlement bonds, which are municipal securities that are backed solely by expected revenues to be derived from lawsuits involving tobacco related deaths and
illnesses which were settled between certain states and American tobacco companies. Tobacco settlement bonds are secured by an issuing state’s proportionate share in the Master Settlement Agreement (“MSA”). The MSA is an agreement,
reached out of court in November 1998 between 46 states and nearly all of the U.S. tobacco manufacturers. The MSA provides for annual payments in perpetuity by the manufacturers to the states in exchange for releasing all claims against the
manufacturers and a pledge of no further litigation. Tobacco manufacturers pay into a master escrow trust based on their market share, and each state receives a fixed percentage of the payment as set forth in the MSA. A number of states have
securitized the future flow of
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those payments by selling bonds pursuant to indentures or through distinct governmental entities created for such purpose. The principal and interest payments on the bonds are backed by the
future revenue flow related to the MSA. Annual payments on the bonds, and thus risk to the Fund, are highly dependent on the receipt of future settlement payments to the state or its governmental entity.
The actual amount of future settlement payments is further dependent on many factors, including, but not limited to, annual domestic cigarette
shipments, reduced cigarette consumption, increased taxes on cigarettes, inflation, financial capability of tobacco companies, continuing litigation and the possibility of tobacco manufacturer bankruptcy. The initial and annual payments made by the
tobacco companies will be adjusted based on a number of factors, the most important of which is domestic cigarette consumption. If the volume of cigarettes shipped in the U.S. by manufacturers participating in the settlement decreases significantly,
payments due from them will also decrease. Demand for cigarettes in the U.S. could continue to decline due to price increases needed to recoup the cost of payments by tobacco companies. Demand could also be affected by: anti-smoking campaigns, tax
increases, reduced advertising, enforcement of laws prohibiting sales to minors; elimination of certain sales venues such as vending machines; and the spread of local ordinances restricting smoking in public places. As a result, payments made by
tobacco manufacturers could be negatively impacted if the decrease in tobacco consumption is significantly greater than the forecasted decline. A market share loss by the MSA companies to non-MSA participating
tobacco manufacturers would cause a downward adjustment in the payment amounts. A participating manufacturer filing for bankruptcy also could cause delays or reductions in bond payments. The MSA itself has been subject to legal challenges and has,
to date, withstood those challenges.
Municipal Leases and Certificates of Participation. Also included within the general
category of municipal securities described in the Prospectus are municipal leases, certificates of participation in such lease obligations or installment purchase contract obligations (hereinafter collectively called “Municipal Lease
Obligations”) of municipal authorities or entities. Although a Municipal Lease Obligation does not constitute a general obligation of the municipality for which the municipality’s taxing power is pledged, a Municipal Lease Obligation is
ordinarily backed by the municipality’s covenant to budget for, appropriate and make the payments due under the Municipal Lease Obligation. However, certain Municipal Lease Obligations contain “nonappropriation” clauses which provide
that the municipality has no obligation to make lease or installment purchase payments in future years unless money is appropriated for such purpose on a yearly basis. In the case of a
“non-appropriation” lease, the Fund’s ability to recover under the lease in the event of non-appropriation or default will be limited solely to the
repossession of the leased property, without recourse to the general credit of the lessee, and disposition or releasing of the property might prove difficult. To the extent that the Fund invests in unrated municipal leases or participates in such
leases, the credit quality rating and risk of cancellation of such unrated leases will be monitored on an ongoing basis. In order to reduce this risk, the Fund will only purchase Municipal Lease Obligations where Nuveen Asset Management believes the
issuer has a strong incentive to continue making appropriations until maturity.
USES OF DERIVATIVES; HEDGING STRATEGIES
The Fund may periodically engage in hedging transactions, and otherwise use various types of derivative instruments, described below, to
reduce risk, to effectively gain particular market exposures, to seek to enhance returns, and to reduce transaction costs, among other reasons.
“Hedging” is a term used for various methods of seeking to preserve portfolio capital value by offsetting price changes in one
investment through making another investment whose price should tend to move in the opposite direction.
A “derivative” is a
financial contract whose value is based on (or “derived” from) a traditional security (such as a stock or a bond), an asset (such as a commodity like gold), or a market index (such as the Lehman Municipal Bond Index). Some forms of
derivatives may trade on exchanges, while non-standardized derivatives,
10
which tend to be more specialized and complex, trade in “over-the-counter” or a one-on-one basis. It may be desirable and possible in various market environments to partially hedge the portfolio against fluctuations in market value due to market interest
rate or credit quality fluctuations, or instead to gain a desired investment exposure, by entering into various types of derivative transactions, including financial futures and index futures as well as related put and call options on such
instruments, structured notes, or interest rate swaps on taxable or tax-exempt securities or indexes (which may be “forward-starting”), credit default swaps, and options on interest rate swaps, among
others.
These transactions present certain risks. In particular, the imperfect correlation between price movements in the futures
contract and price movements in the securities being hedged creates the possibility that losses on the hedge by the Fund may be greater than gains in the value of the securities in the Fund’s portfolio. In addition, futures and options markets
may not be liquid in all circumstances. As a result, in volatile markets, the Fund may not be able to close out the transaction without incurring losses substantially greater than the initial deposit. Finally, the potential deposit requirements in
futures contracts create an ongoing greater potential financial risk than do options transactions, where the exposure is limited to the cost of the initial premium. Losses due to hedging transactions will reduce yield. Net gains, if any, from
hedging and other portfolio transactions will be distributed as taxable distributions to stockholders. The Fund will invest in these instruments only in markets believed by Nuveen Asset Management to be active and sufficiently liquid.
The Fund will invest in these instruments only in markets believed by Nuveen Asset Management to be active and sufficiently liquid. Successful
implementation of most hedging strategies will generate taxable income.
In October 2020, the SEC adopted Rule 18f-4 under the 1940 Act governing the use of derivatives by registered investment companies. Under Rule 18f-4, the Fund may enter into Derivatives Transactions (as defined
below) and certain other transactions notwithstanding the restrictions on the issuance of “senior securities” under Section 18 of the 1940 Act. Section 18, among other things,
prohibits closed-end funds, including the Fund, from issuing or selling any “senior security” representing indebtedness (unless the fund maintains 300% “asset coverage”) or any
senior security representing stock (unless the fund maintains 200% “asset coverage”).
Under
Rule 18f-4, “Derivatives Transactions” include the following: (1) any swap, security-based swap (including a contract for differences), futures contract, forward contract, option
(excluding purchased options), any combination of the foregoing, or any similar instrument, under which the Fund is or may be required to make any payment or delivery of cash or other assets during the life of the instrument or at maturity or early
termination, whether as margin or settlement payment or otherwise; (2) any short sale borrowing; (3) reverse repurchase agreements and similar financing transactions (e.g., recourse
and non-recourse tender option bonds, and borrowed bonds), if the Fund elects to treat these transactions as Derivatives Transactions under
Rule 18f-4; and (4) when-issued or forward-settling securities (e.g., firm and standby commitments,
including to-be-announced (“TBA”) commitments, and dollar rolls) and non-standard settlement cycle
securities, unless such transactions meet the Delayed-Settlement Securities Provision.
Rule 18f-4, among other things, requires certain funds that invest in Derivatives
Transactions to adopt and implement a comprehensive written derivatives risk management program (“DRMP”) and comply with a relative or absolute limit on fund leverage risk calculated based on value-at-risk (“VaR”). The DRMP is administered by a “derivatives risk manager,” who is appointed by the Fund’s Board, including a majority of the Trustees who are not
“interested persons” (as defined in the 1940 Act) (the “Independent Trustees”), and periodically reviews the DRMP and reports to the Board.
However, Rule 18f-4 provides an exception from the DRMP, VaR limit and certain other
requirements if the Fund’s “derivatives exposure” is limited to 10% of its net assets (as calculated in accordance with
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Rule 18f-4) and the Fund adopts and implements written policies and procedures reasonably designed to manage its derivatives risks (the
“Limited Derivatives User Exception”). The Fund relies on the Limited Derivatives User Exception.
Swap
Transactions. The Fund may enter into total return, interest rate and credit default swap agreements and interest rate caps, floors and collars. The Fund may also enter into options on the foregoing types of swap agreements
(“swap options”).
The Fund may enter into swap transactions for any purpose consistent with its investment objective, such as
for the purpose of attempting to obtain or preserve a particular return or spread at a lower cost than obtaining a return or spread through purchases and/or sales of instruments in other markets, as a duration management technique, to reduce risk
arising from the ownership of a particular instrument, or to gain exposure to certain sectors or markets in the most economical way possible.
Swap agreements are two party contracts entered into primarily by institutional investors for a specified period of time. In a standard swap
transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on a particular predetermined asset, reference rate or index. The gross returns to be exchanged or swapped between the parties are
generally calculated with respect to a notional amount, e.g., the return on or increase in value of a particular dollar amount invested at a particular interest rate or in a basket of securities representing a particular index. The notional
amount of the swap agreement generally is only used as a basis upon which to calculate the obligations that the parties to the swap agreement have agreed to exchange. The Fund’s current obligations under a net swap agreement will be accrued
daily (offset against any amounts owed to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by assets determined to be liquid by Nuveen Asset Management. The Fund will not enter into swap transactions
having a notional amount that exceeds the outstanding amount of the Fund’s leverage. See “Use of Leverage” and “Risk Factors—Leverage Risk” in the Prospectus.
Some, but not all, swaps may be cleared, in which case a central clearing counterparty stands between each buyer and seller and effectively
guarantees performance of each contract, to the extent of its available resources for such purpose. Uncleared swaps have no such protection; each party bears the risk that its direct counterparty will default.
Interest Rate Swaps, Caps, Collars and Floors. Interest rate swaps are bilateral contracts in which each party agrees to
make periodic payments to the other party based on different referenced interest rates (e.g., a fixed rate and a floating rate) applied to a specified notional amount. The purchase of an interest rate floor entitles the purchaser, to the
extent that a specified index falls below a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate floor. The purchase of an interest rate cap entitles the purchaser, to
the extent that a specified index rises above a predetermined interest rate, to receive payments of interest on a notional principal amount from the party selling such interest rate cap. Interest rate collars involve selling a cap and purchasing a
floor or vice versa to protect the Fund against interest rate movements exceeding given minimum or maximum levels.
Depending on the state
of interest rates in general, the Fund’s use of interest rate swaps could enhance or harm the overall performance of the Common Stock. To the extent interest rates decline, the value of the interest rate swap could decline, and could result in
a decline in the net asset value of the Common Stock. In addition, if the counterparty to an interest rate swap defaults, the Fund would not be able to use the anticipated net receipts under the swap to offset the interest payments on Borrowings or
the dividend payments on any outstanding preferred shares. Depending on whether the Fund would be entitled to receive net payments from the counterparty on the swap, 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 Stock. In addition, at the time an interest rate swap 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
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on the expiring transaction. If this occurs, it could have a negative impact on the performance of the Common Stock. The Fund could be required to prepay the principal amount of any Borrowings.
Such redemption or prepayment would likely result in the Fund seeking to terminate early all or a portion of any swap transaction. Early termination of a swap could result in a termination payment by or to the Fund.
Total Return Swaps. In a total return swap, one party agrees to pay the other the “total return” of a defined
underlying asset during a specified period, in return for periodic payments based on a fixed or variable interest rate or the total return from other underlying assets. A total return swap may be applied to any underlying asset but is most commonly
used with equity indices, single stocks, bonds and defined baskets of loans and mortgages. The Fund might enter into a total return swap involving an underlying index or basket of securities to create exposure to a potentially widely-diversified
range of securities in a single trade. An index total return swap can be used by Nuveen Asset Management to assume risk, without the complications of buying the component securities from what may not always be the most liquid of markets.
Credit Default Swaps. A credit default swap is a bilateral contract that enables an investor to buy or sell protection
against a defined-issuer credit event. The Fund may enter into credit default swap agreements either as a buyer or a seller. The Fund may buy protection to attempt to mitigate the risk of default or credit quality deterioration in an individual
security or a segment of the fixed income securities market to which it has exposure, or to take a “short” position in individual bonds or market segments which it does not own. The Fund may sell protection in an attempt to gain exposure
to the credit quality characteristics of particular bonds or market segments without investing directly in those bonds or market segments.
As the buyer of protection in a credit default swap, the Fund would pay a premium (by means of an upfront payment or a periodic stream of
payments over the term of the agreement) in return for the right to deliver a referenced bond or group of bonds to the protection seller and receive the full notional or par value (or other agreed upon value) upon a default (or similar event) by the
issuer(s) of the underlying referenced obligation(s). If no default occurs, the protection seller would keep the stream of payments and would have no further obligation to the Fund. Thus, the cost to the Fund would be the premium paid with respect
to the agreement. If a credit event occurs, however, the Fund may elect to receive the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. The Fund
bears the risk that the protection seller may fail to satisfy its payment obligations.
If the Fund is a seller of protection in a credit
default swap and no credit event occurs, the Fund would generally receive an up-front payment or a periodic stream of payments over the term of the swap. If a credit event occurs, however, generally the Fund
would have to pay the buyer the full notional value of the swap in exchange for an equal face amount of deliverable obligations of the reference entity that may have little or no value. As the protection seller, the Fund effectively adds economic
leverage to its portfolio because, in addition to being subject to investment exposure on its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. Thus, the Fund bears the same risk as it would by buying
the reference obligations directly, plus the additional risks related to obtaining investment exposure through a derivative instrument discussed below under “—Risks Associated with Swap Transactions.”
Swap Options. A swap option is a contract that gives a counterparty the right (but not the obligation), in return for
payment of a premium, to enter into a new swap agreement or to shorten, extend, cancel, or otherwise modify an existing swap agreement at some designated future time on specified terms. A cash-settled option on a swap gives the purchaser the right,
in return for the premium paid, to receive an amount of cash equal to the value of the underlying swap as of the exercise date. The Fund may write (sell) and purchase put and call swap options. Depending on the terms of the particular option
agreement, the Fund generally would incur a greater degree of risk when it writes a swap option than when it purchases a swap option. When the Fund purchases a swap option, it risks losing only the amount of the premium it has paid should it decide
to let the option expire unexercised. However, when the Fund writes a swap option, upon exercise of the option the Fund would become obligated according to the terms of the underlying agreement.
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Risks Associated with Swap Transactions. The use of swap transactions is a highly
specialized activity which involves strategies and risks different from those associated with ordinary portfolio security transactions. If Nuveen Asset Management is incorrect in its forecasts of default risks, market spreads or other applicable
factors or events, the investment performance of the Fund would diminish compared with what it would have been if these techniques were not used. As the protection seller in a credit default swap, the Fund effectively adds economic leverage to its
portfolio because, in addition to being subject to investment exposure on its total net assets, the Fund is subject to investment exposure on the notional amount of the swap. The Fund generally may only close out a swap, cap, floor, collar or other two-party contract with its particular counterparty, and generally may only transfer a position with the consent of that counterparty. In addition, the price at which the Fund may close out such a two party contract
may not correlate with the price change in the underlying reference asset. If the counterparty defaults, the Fund will have contractual remedies, but there can be no assurance that the counterparty will be able to meet its contractual obligations or
that the Fund will succeed in enforcing its rights. It also is possible that developments in the derivatives market, including changes in government regulation, could adversely affect the Fund’s ability to terminate existing swap or other
agreements or to realize amounts to be received under such agreements.
Futures and Options on Futures. The Fund may
attempt to hedge all or a portion of its investment portfolio against market risk by engaging in transactions in financial futures contracts, options on financial futures or options that either are based on an index of long-term municipal securities
(i.e., those with remaining maturities averaging 20-30 years) or relate to debt securities whose prices Nuveen Asset Management anticipates to correlate with the prices of the municipal securities the
Fund owns. To accomplish such hedging, the Fund may take an investment position in a futures contract or in an option which is expected to move in the opposite direction from the position being hedged. Hedging may be utilized to reduce the risk that
the value of securities the Fund owns may decline on account of an increase in interest rates and to hedge against increases in the cost of the securities the Fund intends to purchase as a result of a decline in interest rates. The use of futures
and options for hedging purposes can be expected to result in taxable income or gain.
If futures are used for hedging purposes, there can
be no guarantee that there will be a correlation between price movements in the futures contract and in the underlying financial instruments that are being hedged. This could result from differences between the financial instruments being hedged and
the financial instruments underlying the standard contracts available for trading (e.g., differences in interest rate levels, maturities and the creditworthiness of issuers) among other factors. In addition, price movements of futures
contracts may not correlate perfectly with price movements of the financial instruments underlying the futures contracts due to certain market distortions.
A futures contract is an agreement between two parties to buy and sell a security, index or interest rate (each a “financial
instrument”) for a set price on a future date. Certain futures contracts, such as futures contracts relating to individual securities, call for making or taking delivery of the underlying financial instrument. However, these contracts generally
are closed out before delivery by entering into an offsetting purchase or sale of a matching futures contract (same exchange, underlying financial instrument, and delivery month). Other futures contracts, such as futures contracts on interest rates
and indices, do not call for making or taking delivery of the underlying financial instrument, but rather are agreements 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 financial instrument at the close of the last trading day of the contract and the price at which the contract was originally written. These contracts also may be settled by entering into an offsetting futures contract.
Successful use of futures by the Fund also is subject to Nuveen Asset Management’s ability to predict correctly movements in the
direction of the relevant market. For example, if the Fund uses futures to hedge against the possibility of a decline in the market value of securities held in its portfolio and the prices of such securities increase instead, the Fund will lose part
or all of the benefit of the increased value of the securities which it has hedged because it will have offsetting losses in its futures positions. Furthermore, if in such circumstances the Fund has insufficient cash, it may have to sell securities
to meet daily variation margin
14
requirements. The Fund may have to sell such securities at a time when it may be disadvantageous to do so. The sale of financial futures or the purchase of put options on financial futures or on
debt securities or indexes is a means of hedging against the risk of rising interest rates, whereas the purchase of financial futures or of call options on financial futures or on debt securities or indexes is a means of hedging the Fund’s
portfolio against an increase in the price of securities such Fund intends to purchase. Writing a call option on a futures contract or on debt securities or indexes may serve as a hedge against a modest decline in prices of municipal securities held
in the Fund’s portfolio, and writing a put option on a futures contract or on debt securities or indexes may serve as a partial hedge against an increase in the value of municipal securities the Fund intends to acquire. The writing of these
options provides a hedge to the extent of the premium received in the writing transaction.
Unlike when the Fund purchases or sells a
security, no price is paid or received by the Fund upon the purchase or sale of a futures contract. Initially, the Fund will be required to deposit with the futures broker, known as a futures commission merchant (“FCM”), an amount of cash
or securities equal to a varying specified percentage of the contract amount. This amount is known as initial margin. The margin deposit is intended to ensure completion of the contract. Minimum initial margin requirements are established by the
futures exchanges and may be revised. In addition, FCMs may establish margin deposit requirements that are higher than the exchange minimums. Cash held in the margin account generally is not income producing. However, coupon-bearing securities, such
as Treasury securities, held in margin accounts generally will earn income. Subsequent payments to and from the FCM, called variation margin, will be made on a daily basis as the price of the underlying financial instrument fluctuates, making the
futures contract more or less valuable, a process known as marking the contract to market. Changes in variation margin are recorded by the Fund as unrealized gains or losses. At any time prior to expiration of the futures contract, the Fund may
elect to close the position by taking an opposite position that will operate to terminate its position in the futures contract. A final determination of variation margin is then made, additional cash is required to be paid by or released to the
Fund, and the Fund realizes a gain or loss. In the event of the bankruptcy or insolvency of an FCM that holds margin on behalf of the Fund, the Fund may be entitled to the return of margin owed to it only in proportion to the amount received by the
FCM’s other customers, potentially resulting in losses to the Fund. Futures transactions also involve brokerage costs.
A futures
option gives the purchaser of such option 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 purchaser acquires a long position in the futures contract and the writer is assigned the opposite short position. Upon the exercise of a put option, the opposite is true.
There are certain risks associated with the use of financial futures and options to hedge investment portfolios. There may be an imperfect
correlation between price movements of the futures and options and price movements of the portfolio securities being hedged. Losses may be incurred in hedging transactions, which could reduce the portfolio gains that might have been realized if the
hedging transactions had not been entered into.
If the Fund engages in futures transactions or in the writing of options on futures, it
will be required to maintain initial margin and maintenance margin and may be required to make daily variation margin payments in accordance with applicable rules of the exchanges and the Commodity Futures Trading Commission (“CFTC”). If
the Fund purchases a financial futures contract or a call option or writes a put option in order to hedge the anticipated purchase of municipal securities, and if the Fund fails to complete the anticipated purchase transaction, the Fund may have a
loss or a gain on the futures or options transaction that will not be offset by price movements in the municipal securities that were the subject of the anticipatory hedge. The cost of put options on debt securities or indexes effectively increases
the cost of the securities subject to them, thereby reducing the yield otherwise available from these securities. If the Fund decides to use futures contracts or options on futures contracts for hedging purposes, the Fund will be required to
establish an account for such purposes with one or more CFTC-registered futures commission merchants. A futures commission merchant could establish initial and maintenance margin requirements for the Fund that are greater than those which would
otherwise apply to the Fund under applicable rules of the exchanges and the CFTC.
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There can be no assurance that a liquid market will exist at a time when the Fund seeks to close
out a derivatives or futures or a futures option position, and the Fund would remain obligated to meet margin requirements until the position is closed. 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.
The requirements for
qualification as a regulated investment company (“RIC”) may also limit the extent to which the Fund may invest in futures, options on futures and swaps. See “Tax Matters.”
Nuveen Fund Advisors may use derivative instruments to seek to enhance return, to hedge some of the risk of the Fund’s investments in
municipal securities or as a substitute for a position in the underlying asset. These types of strategies may generate taxable income. With respect to the Fund’s investment policies, for purposes of calculating net assets, the Fund will value
eligible derivatives at fair value or market value instead of notional value.
There is no assurance that these derivative strategies will
be available at any time or that, if used, that the strategies will be successful.
For further information regarding these investment
strategies and risks presented thereby, see Appendix B to this SAI.
REPURCHASE AGREEMENTS
The Fund may enter into repurchase agreements (the purchase of a security coupled with an agreement to resell that security at a higher price)
with respect to its permitted investments. The Fund’s repurchase agreements will provide that the value of the collateral underlying the repurchase agreement will always be at least equal to the repurchase price, including any accrued interest
earned on the agreement, and will be marked-to-market daily. The agreed-upon repurchase price determines the yield during the Fund’s holding period.
Repurchase agreements are considered to be loans collateralized by the underlying security that is the subject of the repurchase contract. The
Fund will only enter into repurchase agreements with registered securities dealers or domestic banks that, in Nuveen Asset Management’s opinion, present minimal credit risk. The risk to the Fund is limited to the ability of the issuer to pay
the agreed-upon repurchase price on the delivery date; however, although the value of the underlying collateral at the time the transaction is entered into always equals or exceeds the agreed-upon repurchase price, if the value of the collateral
declines there is a risk of loss of both principal and interest. In the event of default, the collateral may be sold but the Fund might incur a loss if the value of the collateral declines, and might incur disposition costs or experience delays in
connection with liquidating the collateral. In addition, if bankruptcy proceedings are commenced with respect to the seller of the security, realization upon the collateral by the Fund may be delayed or limited. Nuveen Asset Management will monitor
the value of the collateral at the time the transaction is entered into and at all times subsequent during the term of the repurchase agreement in an effort to determine that such value always equals or exceeds the agreed-upon repurchase price. In
the event the value of the collateral declines below the repurchase price, Nuveen Asset Management will demand additional collateral from the issuer to increase the value of the collateral to at least that of the repurchase price, including
interest.
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SHORT-TERM INVESTMENTS
Short-Term Taxable Fixed Income Securities. For temporary defensive purposes or to keep cash on hand fully invested, the Fund may
invest up to 100% of its net assets in cash equivalents and short-term taxable fixed-income securities, although the Fund intends to invest in taxable short-term investments only in the event that suitable
tax-exempt short-term investments are not available at reasonable prices and yields. Short-term taxable fixed income investments are defined to include, without limitation, the following:
(1) U.S. government securities, including bills, notes and bonds differing as to maturity and rates of interest that are either issued or
guaranteed by the U.S. Treasury or by U.S. government agencies or instrumentalities. U.S. government agency securities include securities issued by (a) the Federal Housing Administration, Farmers Home Administration, Export-Import Bank of the
United States, Small Business Administration, and the Government National Mortgage Association, whose securities are supported by the full faith and credit of the United States; (b) the Federal Home Loan Banks,1 Federal Intermediate Credit Banks, and the Tennessee Valley Authority, whose securities are supported by the right of the agency to borrow from the U.S. Treasury; (c) the Federal National
Mortgage Association, whose securities are supported by the discretionary authority of the U.S. government to purchase certain obligations of the agency or instrumentality; and (d) the Student Loan Marketing Association, whose securities are
supported only by its credit. While the U.S. government provides financial support to such U.S. government-sponsored agencies or instrumentalities, no assurance can be given that it always will do so since it is not so obligated by law. The U.S.
government, its agencies, and instrumentalities do not guarantee the market value of their securities. Consequently, the value of such securities may fluctuate.
(2) Certificates of Deposit issued against funds deposited in a bank or a savings and loan association. Such certificates are for a definite
period of time, earn a specified rate of return, and are normally negotiable. The issuer of a certificate of deposit agrees to pay the amount deposited plus interest to the bearer of the certificate on the date specified thereon. Under current
Federal Deposit Insurance Company regulations, the maximum insurance payable as to any one certificate of deposit is $250,000; therefore, certificates of deposit purchased by the Fund may not be fully insured.
(3) Repurchase agreements, which involve purchases of debt securities. At the time the Fund purchases securities pursuant to a repurchase
agreement, it simultaneously agrees to resell and redeliver such securities to the seller, who also simultaneously agrees to buy back the securities at a fixed price and time. This assures a predetermined yield for the Fund during its holding
period, since the resale price is always greater than the purchase price and reflects an agreed-upon market rate. Such actions afford an opportunity for the Fund to invest temporarily available cash. The Fund may enter into repurchase agreements
only with respect to obligations of the U.S. government, its agencies or instrumentalities; certificates of deposit; or bankers’ acceptances in which the Fund may invest. Repurchase agreements may be considered loans to the seller,
collateralized by the underlying securities. The risk to the Fund is limited to the ability of the seller to pay the agreed-upon sum on the repurchase date; in the event of default, the repurchase agreement provides that the Fund is entitled to sell
the underlying collateral. If the value of the collateral declines after the agreement is entered into, and if the seller defaults under a repurchase agreement when the value of the underlying collateral is less than the repurchase price, the Fund
could incur a loss of both principal and interest. Nuveen Fund Advisors monitors the value of the collateral at the time the action is entered into and at all times during the term of the repurchase agreement. Nuveen Fund Advisors does so in an
effort to determine that the value of the collateral always equals or exceeds the agreed-upon repurchase price to be paid to the Fund. If the seller were to be subject to a federal bankruptcy proceeding, the ability of the Fund to liquidate the
collateral could be delayed or impaired because of certain provisions of the bankruptcy laws.
(4) Commercial paper, which consists of
short-term unsecured promissory notes, including variable rate master demand notes issued by corporations to finance their current operations. Master demand notes are direct
1 These securities are not backed by the full faith and credit of the United States government.
17
lending arrangements between the Fund and a corporation. There is no secondary market for such notes. However, they are redeemable by the Fund at any time. Nuveen Asset Management will consider
the financial condition of the corporation (e.g., earning power, cash flow, and other liquidity measures) and will continuously monitor the corporation’s ability to meet all of its financial obligations, because the Fund’s liquidity
might be impaired if the corporation were unable to pay principal and interest on demand. Investments in commercial paper will be limited to commercial paper rated in the highest categories by a major rating agency and which mature within one year
of the date of purchase or carry a variable or floating rate of interest.
Short-Term
Tax-Exempt Municipal Securities. Short-term tax-exempt municipal securities are securities that are exempt from regular federal income tax and mature within
three years or less from the date of issuance. Short-term tax-exempt municipal income securities are defined to include, without limitation, the following:
Bond Anticipation Notes (“BANs”) are usually general obligations of state and local governmental issuers which are sold to obtain
interim financing for projects that will eventually be funded through the sale of long-term debt obligations or bonds. The ability of an issuer to meet its obligations on its BANs is primarily dependent on the issuer’s access to the long-term
municipal bond market and the likelihood that the proceeds of such bond sales will be used to pay the principal and interest on the BANs.
Tax Anticipation Notes (“TANs”) are issued by state and local governments to finance the current operations of such governments.
Repayment is generally to be derived from specific future tax revenues. TANs are usually general obligations of the issuer. A weakness in an issuer’s capacity to raise taxes due to, among other things, a decline in its tax base or a rise in
delinquencies, could adversely affect the issuer’s ability to meet its obligations on outstanding TANs.
Revenue Anticipation Notes
(“RANs”) are issued by governments or governmental bodies with the expectation that future revenues from a designated source will be used to repay the notes. In general, they also constitute general obligations of the issuer. A decline in
the receipt of projected revenues, such as anticipated revenues from another level of government, could adversely affect an issuer’s ability to meet its obligations on outstanding RANs. In addition, the possibility that the revenues would, when
received, be used to meet other obligations could affect the ability of the issuer to pay the principal and interest on RANs.
Construction Loan Notes are issued to provide construction financing for specific projects. Frequently, these notes are redeemed with funds
obtained from the Federal Housing Administration.
Bank Notes are notes issued by local government bodies and agencies, such as those
described above to commercial banks as evidence of borrowings. The purposes for which the notes are issued are varied but they are frequently issued to meet short-term working capital or capital-project needs. These notes may have risks similar to
the risks associated with TANs and RANs.
Tax-Exempt Commercial Paper (“Municipal
Paper”) represents very short-term unsecured, negotiable promissory notes issued by states, municipalities and their agencies. Payment of principal and interest on issues of municipal paper may be made from various sources, to the extent the
funds are available therefrom. Maturities of municipal paper generally will be shorter than the maturities of TANs, BANs or RANs. There is a limited secondary market for issues of Municipal Paper.
Certain municipal securities may carry variable or floating rates of interest whereby the rate of interest is not fixed but varies with
changes in specified market rates or indices, such as a bank prime rate or a tax-exempt money market index.
While the various types of notes described above as a group represent the major portion of the short-term
tax-exempt note market, other types of notes are available in the marketplace and the Fund may invest in such other types of notes to the extent permitted under its investment objective, policies and
limitations. Such notes may be issued for different purposes and may be secured differently from those mentioned above.
18
ILLIQUID SECURITIES
The Fund may invest in municipal securities that, at the time of investment, are illiquid (i.e., securities that are not readily
marketable), including, but not limited to, restricted securities (securities the disposition of which is restricted under the federal securities laws), securities that may be resold only pursuant to Rule 144A under the Securities Act of 1933, as
amended (the “1933 Act”), that are deemed to be illiquid, and certain repurchase agreements.
Restricted securities may be sold
only in privately negotiated transactions or in a public offering with respect to which a registration statement is in effect under the 1933 Act. Where registration is required, the Fund may be obligated to pay all or part of the registration
expenses and a considerable period may elapse between the time of the decision to sell and the time the Fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to
develop, the Fund might obtain a less favorable price than that which prevailed when it decided to sell. To the extent that the Board or its delegate determines that the price of any illiquid security provided by the pricing service is
inappropriate, such security will be priced at a fair value as determined in good faith by Nuveen Funds Advisors, the Fund’s valuation designee.
INVERSE FLOATING RATE SECURITIES AND FLOATING RATE SECURITIES
Inverse Floating Rate Securities. Inverse floating rate securities (sometimes referred to as “inverse floaters”) are
securities whose interest rates bear an inverse relationship to the interest rate on another security or the value of an index. Generally, inverse floating rate securities represent beneficial interests in a special purpose trust formed by a third
party sponsor for the purpose of holding municipal bonds. The special purpose trust typically sells two classes of beneficial interests or securities: floating rate securities (sometimes referred to as short-term floaters or tender option bonds) and
inverse floating rate securities (sometimes referred to as inverse floaters). Both classes of beneficial interests are represented by certificates. The short-term floating rate securities have first priority on the cash flow from the municipal bonds
held by the special purpose trust. Typically, a third party, such as a bank, broker-dealer or other financial institution, grants the floating rate security holders the option, at periodic intervals, to tender their securities to the institution and
receive the face value thereof. As consideration for providing the option, the financial institution receives periodic fees. The holder of the short-term floater effectively holds a demand obligation that bears interest at the prevailing short-term,
tax-exempt rate. However, the institution granting the tender option will not be obligated to accept tendered short-term floaters in the event of certain defaults or a significant downgrade in the credit
rating assigned to the bond issuer. For its inverse floating rate investment, the Fund receives the residual cash flow from the special purpose trust. Because the holder of the short-term floater is generally assured liquidity at the face value of
the security, the Fund as the holder of the inverse floater assumes the interest rate cash flow risk and the market value risk associated with the municipal security deposited into the special purpose trust. The volatility of the interest cash flow
and the residual market value will vary with the degree to which the trust is leveraged. This is expressed in the ratio of the total face value of the short-term floaters in relation to the value of the residual inverse floaters that are issued by
the special purpose trust. In addition, all voting rights and decisions to be made with respect to any other rights relating to the municipal bonds held in the special purpose trust are passed through to the Fund, as the holder of the residual
inverse floating rate securities.
Because increases in the interest rate on the short-term floaters reduce the residual interest paid on
inverse floaters, and because fluctuations in the value of the municipal bond deposited in the special purpose trust affect the value of the inverse floater only, and not the value of the short-term floater issued by the trust, inverse
floaters’ value is generally more volatile than that of fixed rate bonds. The market price of inverse floating rate securities is generally more volatile than the underlying securities due to the leveraging effect of this ownership structure.
These securities generally will underperform the market of fixed rate bonds in a rising interest rate environment (i.e., when bond values are falling), but tend to outperform the market of fixed rate bonds when interest rates decline or
remain relatively stable. Although volatile, inverse floaters typically offer the potential
19
for yields exceeding the yields available on fixed rate bonds with comparable credit quality, coupon, call provisions and maturity. Inverse floaters have varying degrees of liquidity based upon,
among other things, the liquidity of the underlying securities deposited in a special purpose trust.
The Fund may invest in inverse
floating rate securities issued by special purpose trusts that have recourse to the Fund. In Nuveen Asset Management’s discretion, the Fund may enter into a separate shortfall and forbearance agreement with the third party sponsor of a special
purpose trust. The Fund may enter into such recourse agreements (i) when the liquidity provider to the special purpose trust requires such an agreement because the level of leverage in the trust exceeds the level that the liquidity provider is
willing to support absent such an agreement; and/or (ii) to seek to prevent the liquidity provider from collapsing the trust in the event that the municipal obligation held in the trust has declined in value. Such an agreement may expose the
Fund to a risk of loss that exceeds its investment in the inverse floating rate securities. The shortfall and forbearance agreement would require the Fund to reimburse the third party sponsor of such inverse floater, upon termination of the trust
issuing the inverse floater, the difference between the liquidation value of the bonds held in the trust and the principal amount due to the holders of floating rate interests. Absent a shortfall and forbearance agreement, the Fund would not be
required to make such a reimbursement. If the Fund chooses not to enter into such a shortfall and forbearance agreement, the special purpose trust could be liquidated and the Fund could incur a loss.
The Fund may invest in both inverse floating rate securities and floating rate securities (as discussed below) issued by the same special
purpose trust.
Investments in inverse floating rate securities have the economic effect of financial leverage. The use of leverage
creates special risks for shareholders of Common Stock. See the Prospectus under “Risk Factors—Inverse Floating Rate Securities Risk/Leverage Risk.”
Floating Rate Securities. The Fund may also invest in floating rate securities, as described above, issued by special purpose
trusts. Floating rate securities may take the form of short-term floating rate securities or the option period may be substantially longer. Generally, the interest rate earned will be based upon the market rates for municipal securities with
maturities or remarketing provisions that are comparable in duration to the periodic interval of the tender option, which may vary from weekly, to monthly, to extended periods of one year or multiple years. Since the option feature has a shorter
term than the final maturity or first call date of the underlying bond deposited in the trust, the Fund as the holder of the floating rate security relies upon the terms of the agreement with the financial institution furnishing the option as well
as the credit strength of that institution. As further assurance of liquidity, the terms of the trust provide for a liquidation of the municipal security deposited in the trust and the application of the proceeds to pay off the floating rate
security. The trusts that are organized to issue both short-term floating rate securities and inverse floaters generally include liquidation triggers to protect the investor in the floating rate security.
AUCTION RATE SECURITIES
Municipal
securities also include auction rate municipal securities and auction rate preferred securities issued by closed-end investment companies that invest primarily in municipal securities (collectively,
“auction rate securities”). In recent market environments, auctions have failed, which adversely affects the liquidity and price of auction rate securities, and are unlikely to resume. Provided that the auction mechanism is successful,
auction rate securities usually permit the holder to sell the securities in an auction at par value at specified intervals. The dividend is reset by “Dutch” auction in which bids are made by broker-dealers and other institutions for a
certain amount of securities at a specified minimum yield. The dividend rate set by the auction is the lowest interest or dividend rate that covers all securities offered for sale. While this process is designed to permit auction rate securities to
be traded at par value, there is a risk that an auction will fail due to insufficient demand for the securities. Moreover, between auctions, there may be no secondary market for these securities, and sales conducted on a secondary market may not be
on terms favorable to the seller. Auction rate securities may be called by the issuer. Thus, with respect to liquidity and price stability, auction rate securities may differ
20
substantially from cash equivalents, notwithstanding the frequency of auctions and the credit quality of the security. The Fund’s investments in auction rate securities of closed-end funds are subject to the limitations prescribed by the 1940 Act. The Fund will indirectly bear its proportionate share of any management and other fees paid by such
closed-end funds in addition to the advisory fees payable directly by the Fund.
WHEN-ISSUED AND DELAYED
DELIVERY TRANSACTIONS
The Fund may buy and sell municipal securities on a when-issued or delayed delivery basis, making payment or
taking delivery at a later date, normally within 15 to 45 days of the trade date. On such transactions, the payment obligation and the interest rate are fixed at the time the purchaser enters into the commitment. Beginning on the date the Fund
enters into a commitment to purchase securities on a when-issued or delayed delivery basis, the Fund is required under the rules of the SEC to maintain in a separate account liquid assets, consisting of cash, cash equivalents or liquid securities
having a market value at all times of at least equal to the amount of any delayed payment commitment. Income generated by any such assets which provide taxable income for federal income tax purposes is includable in the taxable income of the Fund
and, to the extent distributed, will be taxable distributions to shareholders. The Fund may enter into contracts to purchase securities on a forward basis (i.e., where settlement will occur more than 60 days from the date of the
transaction) only to the extent that the Fund specifically collateralizes such obligations with a security that is expected to be called or mature within 60 days before or after the settlement date of the forward transaction. The commitment to
purchase securities on a when-issued, delayed delivery or forward basis may involve an element of risk because no interest accrues on the bonds prior to settlement and at the time of delivery the market value may be less than their cost.
OTHER INVESTMENTS
Zero Coupon
Bonds. A zero coupon bond is a bond that typically does not pay interest either for the entire life of the obligation or for an initial period after the issuance of the obligation. When held to its maturity, the holder receives the par
value of the zero coupon bond, which generates a return equal to the difference between the purchase price and its maturity value. A zero coupon bond is normally issued and traded at a deep discount from face value. This original issue discount
(“OID”) approximates the total amount of interest the security will accrue and compound prior to its maturity and reflects the payment deferral and credit risk associated with the instrument. Because zero coupon securities and other OID
instruments do not pay cash interest at regular intervals, the instruments’ ongoing accruals require ongoing judgments concerning the collectability of deferred payments and the value of any associated collateral. As a result, these securities
may be subject to greater value fluctuations and less liquidity in the event of adverse market conditions than comparably rated securities that pay cash on a current basis. Because zero coupon bonds, and OID instruments generally, allow an issuer to
avoid or delay the need to generate cash to meet current interest payments, they may involve greater payment deferral and credit risk than coupon loans and bonds that pay interest currently or in cash. The Fund generally will be required to
distribute dividends to shareholders representing the income of these instruments as it accrues, even though the Fund will not receive all of the income on a current basis or in cash. Thus, the Fund may have to sell other investments, including when
it may not be advisable to do so, and use the cash proceeds to make income distributions to its shareholders. For accounting purposes, these cash distributions to shareholders will not be treated as a return of capital.
Further, Nuveen Fund Advisors collects management fees on the value of a zero coupon bond or OID instrument attributable to the ongoing non-cash accrual of interest over the life of the bond or other instrument. As a result, Nuveen Fund Advisors receives non-refundable cash payments based on such non-cash accruals while investors incur the risk that such non-cash accruals ultimately may not be realized.
Structured Notes. The Fund may utilize structured notes and similar instruments for investment purposes and also for hedging
purposes. Structured notes are privately negotiated debt obligations where the principal and/or interest is determined by reference to the performance of a benchmark asset, market or interest rate (an “embedded index”), such as selected
securities, an index of securities or specified interest rates, or the
21
differential performance of two assets or markets. The terms of such structured instruments normally provide that their principal and/or interest payments are to be adjusted upwards or downwards
(but not ordinarily below zero) to reflect changes in the embedded index while the structured instruments are outstanding. As a result, the interest and/or principal payments that may be made on a structured product may vary widely, depending upon a
variety of factors, including the volatility of the embedded index and the effect of changes in the embedded index on principal and/or interest payments. The rate of return on structured notes may be determined by applying a multiplier to the
performance or differential performance of the referenced index or indices or other assets. Application of a multiplier involves leverage that will serve to magnify the potential for gain and the risk of loss. These types of investments may generate
taxable income.
OTHER INVESTMENT COMPANIES
The Fund may invest in securities of other open- or closed-end investment companies (including
exchange-traded funds) that invest primarily in municipal securities of the types in which the Fund may invest directly. The Fund generally expects that it may invest in other investment companies either during periods when it has large amounts of
uninvested cash, such as the period shortly after the Fund receives the proceeds of the offering of its Common Stock, or during periods when there is a shortage of attractive municipal securities available in the market. The Fund may invest in
investment companies that are advised by Nuveen Fund Advisors, Nuveen Asset Management or their respective affiliates to the extent permitted by applicable law and/or pursuant to exemptive relief from the SEC. As a shareholder in an 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 and administrative fees with respect to assets so invested. Shareholders of Common Stock would
therefore be subject to duplicative expenses to the extent the Fund invests in other investment companies. The Fund will consider its investment in underlying investment companies when determining its compliance with its policy to invest at least
80% of its net assets in municipal securities, the income from which is exempt from regular federal income taxes.
Nuveen Asset Management
will take expenses into account when evaluating the investment merits of an investment in the investment company relative to available municipal security instruments. In addition, because the securities of other investment companies may be leveraged
and subject to the same leverage risk, the Fund may indirectly be subject to those risks described in the Prospectus. Market value will tend to fluctuate more than the yield generated by unleveraged shares.
PORTFOLIO TRADING AND TURNOVER RATE
Portfolio trading may be undertaken to accomplish the Fund’s investment objective. In addition, a security may be sold and another of
comparable quality purchased at approximately the same time to take advantage of what Nuveen Asset Management believes to be a temporary price disparity between the two securities. Temporary price disparities between two comparable securities may
result from supply and demand imbalances where, for example, a temporary oversupply of certain securities may cause a temporarily low price for such securities, as compared with other securities of like quality and characteristics. The Fund may also
engage to a limited extent in short-term trading consistent with its investment objective. Securities may be sold in anticipation of a market decline (a rise in interest rates) or purchased in anticipation of a market rise (a decline in interest
rates) and later sold, but the Fund will not engage in trading solely to recognize a gain.
The Fund may engage in portfolio trading when
considered appropriate, but short-term trading will not be used as the primary means of achieving the Fund’s investment objective. Although the Fund cannot accurately predict its annual portfolio turnover rate, it is generally not expected to
exceed 25% under normal circumstances. For the fiscal year ended October 31, 2022, the Fund’s portfolio turnover rate was 61%. For the six months ended April 30, 2023, the Fund’s portfolio turnover rate was 9%. However, there are
no limits on the Fund’s rate of portfolio turnover, and investments may be sold without regard to length of time held when, in Nuveen Asset Management’s opinion, investment considerations warrant such action. A higher portfolio turnover
rate would
22
result in correspondingly greater brokerage commissions and other transactional expenses that are borne by the Fund. Although these commissions and expenses are not reflected in the Fund’s
“Total Annual Expenses” in the Prospectus, they will be reflected in the Fund’s total return. In addition, high portfolio turnover may result in the realization of net short-term capital gains by the Fund which, when distributed to
shareholders, will be taxable as ordinary income. See “Tax Matters.”
NO PREFERRED SHARES
Unless otherwise approved by shareholders, the Fund will not leverage its capital structure by issuing senior securities such as preferred
shares or debt instruments. However, the Fund may borrow for temporary, emergency or other purposes as permitted by the 1940 Act and invest in certain instruments, including inverse floating rate securities, that have the economic effect of
financial leverage.
23
MANAGEMENT OF THE FUND
DIRECTORS AND OFFICERS
The management
of the Fund, including general supervision of the duties performed for the Fund under the Investment Management Agreement (as defined under “Investment Adviser, Sub-Adviser and Portfolio
Manager—Investment Management Agreement and Related Fees”), is the responsibility of the Board. The number of directors of the Fund is nine, all of whom are not interested persons (referred to herein as “independent directors”).
None of the independent directors has ever been a director, trustee or employee of, or consultant to, Nuveen LLC (“Nuveen”), Nuveen Fund Advisors, Nuveen Asset Management, or their affiliates. The Board is divided into three classes,
Class I, Class II and Class III, the Class I directors serving until the 2026 annual meeting, the Class II directors serving until the 2024 annual meeting and the Class III directors serving until the 2025 annual
meeting, in each case until their respective successors are elected and qualified, as described below. Currently, Amy B. R. Lancellotta, John K. Nelson and Terence J. Toth are slated in Class I, Jack B. Evans, Joanne T. Medero, Albin F.
Moschner and Matthew Thornton III are slated in Class II, and William C. Hunter, Margaret L. Wolff and Robert L. Young are slated in Class III. As each director’s term expires, stockholders will be asked to elect directors and such
directors shall be elected for a term expiring at the time of the third succeeding annual meeting subsequent to their election or thereafter in each case when their respective successors are duly elected and qualified. These provisions could delay
for up to two years the replacement of a majority of the Board. See “Certain Provisions in the Articles of Incorporation and By-Laws” in the prospectus.
The officers of the Fund serve annual terms through August of each year and are elected on an annual basis. The names, business addresses and
years of birth of the directors and officers of the Fund, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below. Except as noted in
the table below, the directors of the Fund are directors or trustees, as the case may be, of 135 Nuveen-sponsored registered investment companies (the “Nuveen Funds”), which includes 67 open-end
mutual funds (the “Nuveen Mutual Funds”), 49 closed-end funds and 19 Nuveen-sponsored exchange-traded funds.
24
|
|
|
|
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the Fund
Complex |
|
Principal Occupation(s)
During Past Five Years |
|
Number of
Portfolios
in Fund
Complex
Overseen By
Director |
|
Other
Directorships
Held by
Director
During
Past
Five Years |
| Terence J. Toth c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1959) |
|
Chair of
the Board;
Director |
|
Term—Class I
Length of
Service—Since
2008, Chair of
the Board since
July 2018 |
|
Formerly, Co-Founding Partner, Promus Capital (investment advisory firm) (2008-2017); formerly, Director of Quality Control Corporation (manufacturing) (2012-2021); formerly, Director of
Fulcrum IT Services LLC (information technology services firm to government entities) (2010-2019); formerly, Director, LogicMark LLC (health services) (2012-2016); formerly, Director, Legal & General Investment Management America, Inc.
(asset management) (2008-2013); formerly, CEO and President, Northern Trust Global Investments (financial services) (2004-2007); Executive Vice President, Quantitative Management & Securities Lending (2000-2004); prior thereto, various
positions with Northern Trust Company (financial services) (since 1994); Chair of the Board of Kehrein Center for the Arts (philanthropy) (since 2021); Member of Catalyst Schools of Chicago Board (since 2008) and Mather Foundation Board
(philanthropy) (since 2012), formerly, Chair of its Investment Committee (2017-2022); formerly, Member, Chicago Fellowship Board (philanthropy) (2005-2016); formerly, Member, Northern Trust Mutual Funds Board (2005-2007), Northern Trust Global
Investments Board (2004-2007), Northern Trust Japan Board (2004-2007), Northern Trust Securities Inc. Board (2003-2007) and Northern Trust Hong Kong Board (1997-2004) |
|
135 |
|
None |
25
|
|
|
|
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the Fund
Complex |
|
Principal Occupation(s)
During Past Five Years |
|
Number of
Portfolios
in Fund
Complex
Overseen By
Director |
|
Other
Directorships
Held by
Director
During
Past
Five Years |
|
|
|
|
|
|
| Jack B. Evans c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1948) |
|
Director |
|
Term—Class II
Length of
Service—
Since 1999 |
|
Chairman (since 2019), formerly, President (1996-2019), The Hall-Perrine Foundation (private philanthropic corporation); Life Trustee of Coe College; formerly, Director, Public Member, American Board of Orthapaedic Surgery
(2015-2020); Director (1997-2003), Federal Reserve Bank of Chicago; President and Chief Operating Officer (1972-1995), SCI Financial Group, Inc., (regional financial services firm); Member and President Pro Tem of the Board of Regents for the State
of Iowa University System (2007-2013); Director (1996-2015), The Gazette Company (media and publishing) |
|
135 |
|
Formerly, Director and Chairman (2009-2021), United Fire Group, a publicly held company; Director (2000-2004), Alliant Energy |
|
|
|
|
|
|
| William C. Hunter c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1948) |
|
Director |
|
Term—Class III
Length of
Service—
Since 2004 |
|
Dean Emeritus, formerly, Dean (2006-2012), Tippie College of Business, University of Iowa; past Director (2005-2015) and past President (2010-2014) of Beta Gamma Sigma, Inc., The International Business Honor Society; formerly,
Director (1997-2007), Credit Research Center at Georgetown University; formerly, Dean and Distinguished Professor of Finance (2003-2006), School of Business at the University of Connecticut; previously, Senior Vice President and Director of Research
(1995-2003) at the Federal Reserve Bank of Chicago |
|
135 |
|
Director (since 2009) of Wellmark, Inc.; formerly, Director (2004-2018) of Xerox Corporation |
26
|
|
|
|
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the Fund
Complex |
|
Principal Occupation(s)
During Past Five Years |
|
Number of
Portfolios
in Fund
Complex
Overseen By
Director |
|
Other
Directorships
Held by
Director
During
Past
Five Years |
|
|
|
|
|
|
| Amy B. R. Lancellotta c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1959) |
|
Director |
|
Term—Class I
Length of
Service—
Since 2021 |
|
Formerly, Managing Director, Independent Directors Council (IDC) (supports the fund independent director community and is part of the Investment Company Institute (ICI), which represents regulated investment companies) (2006-2019);
formerly, various positions with ICI (1989-2006); Member of the Board of Directors, Jewish Coalition Against Domestic Abuse (JCADA) (since 2020) |
|
135 |
|
None |
27
|
|
|
|
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the Fund
Complex |
|
Principal Occupation(s)
During Past Five Years |
|
Number of
Portfolios
in Fund
Complex
Overseen By
Director |
|
Other
Directorships
Held by
Director
During
Past
Five Years |
|
|
|
|
|
|
| Joanne T. Medero c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1954) |
|
Director |
|
Term—Class II
Length of
Service—
Since 2021 |
|
Formerly, Managing Director, Government Relations and Public Policy (2009-2020) and Senior Advisor to the Vice Chairman (2018-2020), BlackRock, Inc. (global investment management firm); formerly, Managing Director, Global Head of
Government Relations and Public Policy, Barclays Group (IBIM) (investment banking, investment management and wealth management businesses) (2006-2009); formerly, Managing Director, Global General Counsel and Corporate Secretary, Barclays Global
Investors (global investment management firm) (1996-2006); formerly, Partner, Orrick, Herrington & Sutcliffe LLP (law firm) (1993-1995); formerly, General Counsel, Commodity Futures Trading Commission (government agency overseeing U.S.
derivatives markets) (1989-1993); formerly, Deputy Associate Director/Associate Director for Legal and Financial Affairs, Office of Presidential Personnel, The White House (1986-1989); Member of the Board of Directors, Baltic-American Freedom
Foundation (seeks to provide opportunities for citizens of the Baltic states to gain education and professional development through exchanges in the U.S.) (since 2019) |
|
135 |
|
None |
28
|
|
|
|
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the Fund
Complex |
|
Principal Occupation(s)
During Past Five Years |
|
Number of
Portfolios
in Fund
Complex
Overseen By
Director |
|
Other
Directorships
Held by
Director
During
Past
Five Years |
|
|
|
|
|
|
| Albin F. Moschner c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1952) |
|
Director |
|
Term—Class III
Length of
Service—
Since 2016 |
|
Founder and Chief Executive Officer, Northcroft Partners, LLC (management consulting firm) (since 2012); previously, held positions at Leap Wireless International, Inc. (consumer wireless services), including Consultant (2011-2012),
Chief Operating Officer (2008-2011) and Chief Marketing Officer (2004-2008); formerly, President, Verizon Card Services division of Verizon Communications, Inc. (telecommunication services) (2000-2003); formerly, President, One Point Services at One
Point Communications (telecommunication services) (1999-2000); formerly, Vice Chairman of the Board, Diba, Incorporated (internet technology provider) (1996-1997); formerly, various executive positions (1991-1996), including Chief Executive Officer
(1995-1996), with Zenith Electronics Corporation (consumer electronics) |
|
135 |
|
Former Chairman (2019) and Director (2012-2019), USA Technologies, Inc., a provider of solutions and services to facilitate electronic payment transactions; formerly, Director, Wintrust
Financial Corporation (1996-2016) |
29
|
|
|
|
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the Fund
Complex |
|
Principal Occupation(s)
During Past Five Years |
|
Number of
Portfolios
in Fund
Complex
Overseen By
Director |
|
Other
Directorships
Held by
Director
During
Past
Five Years |
|
|
|
|
|
|
| John K. Nelson c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1962) |
|
Director |
|
Term—Class I
Length of
Service—
Since 2013 |
|
Member of Board of Directors of Core12 LLC. (private firm which develops branding, marketing and communications strategies for clients) (since 2008); served The President’s Council of Fordham University (2010-2019) and
previously a Director of the Curran Center for Catholic American Studies (2009-2018); formerly, senior external advisor to the Financial Services practice of Deloitte Consulting LLP. (2012-2014); former Chair of the Board of Trustees of Marian
University (2010-2014 as trustee, 2011-2014 as Chair); formerly Chief Executive Officer of ABN AMRO Bank N.V., North America, and Global Head of the Financial Markets Division (2007-2008), with various executive leadership roles in ABN AMRO Bank
N.V. between 1996 and 2007 |
|
135 |
|
None |
|
|
|
|
|
|
| Matthew Thornton III c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1958) |
|
Director |
|
Term—Class II
Length of
Service—
Since 2020 |
|
Formerly, Executive Vice President and Chief Operating Officer (2018-2019), FedEx Freight Corporation, a subsidiary of FedEx Corporation (“FedEx”) (provider of transportation,
e-commerce and business services through its portfolio of companies); formerly, Senior Vice President, U.S. Operations (2006-2018), Federal Express Corporation, a subsidiary of FedEx; formerly, Member of the
Board of Directors (2012-2018), Safe Kids Worldwide® (non-profit organization dedicated to preventing childhood injuries) |
|
135 |
|
Member of the Board of Directors (since 2014), The Sherwin-Williams Company (develops, manufactures, distributes and sells paints, coatings and related products); Member of the Board of Directors (since 2020), Crown Castle
International (provider of communications infrastructure) |
30
|
|
|
|
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the Fund
Complex |
|
Principal Occupation(s)
During Past Five Years |
|
Number of
Portfolios
in Fund
Complex
Overseen By
Director |
|
Other
Directorships
Held by
Director
During
Past
Five Years |
| Margaret L. Wolff c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1955) |
|
Director |
|
Term—Class III
Length of
Service—
Since 2016 |
|
Formerly, Of Counsel (2005-2014), Skadden, Arps, Slate, Meagher & Flom LLP (Mergers & Acquisitions Group) (legal services); Member of the Board of Trustees of New York-Presbyterian Hospital (since 2005);
Member (since 2004), formerly, Chair (2015-2022) of the Board of Trustees of The John A. Hartford Foundation (philanthropy dedicated to improving the care of older adults); formerly, Member (2005-2015) and Vice Chair (2011-2015) of the Board of
Trustees of Mt. Holyoke College |
|
135 |
|
Formerly Member of the Board of Directors (2013-2017) of Travelers Insurance Company of Canada and The Dominion of Canada General Insurance Company (each, a part of Travelers Canada, the Canadian operation of The Travelers
Companies, Inc.) |
|
|
|
|
|
|
| Robert L. Young c/o Nuveen
333 West Wacker Drive Chicago, IL 60606
(1963) |
|
Director |
|
Term—Class III
Length of
Service—
Since 2017 |
|
Formerly, Chief Operating Officer and Director, J.P. Morgan Investment Management Inc. (financial services) (2010-2016); formerly, President and Principal Executive Officer (2013-2016), and Senior Vice President and Chief
Operating Officer (2005-2010), of J.P. Morgan Funds; formerly, Director and various officer positions for J.P. Morgan Investment Management Inc. (formerly, JPMorgan Funds Management, Inc. and formerly, One Group Administrative Services) and
JPMorgan Distribution Services, Inc. (financial services) (formerly, One Group Dealer Services, Inc.) (1999-2017) |
|
135 |
|
None |
31
OFFICERS INFORMATION
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the
Fund Complex |
|
Principal Occupation(s)
During Past Five Years |
| David J. Lamb 333 West Wacker Drive
Chicago, IL 60606 (1963) |
|
Chief
Administrative
Officer |
|
Term—Indefinite
Length of
Service—
Since 2015 |
|
Managing Director of Nuveen Fund Advisors, LLC (since 2019); Senior Managing Director (since 2021), formerly, Managing Director (2020-2021) of Nuveen Securities, LLC; Senior Managing Director (since 2021), formerly, Managing
Director (2017-2021), Senior Vice President (2006-2017) of Nuveen |
|
|
|
|
| Brett E. Black 333 West Wacker Drive
Chicago, IL 60606 (1972) |
|
Vice President
and Chief
ComplianceOfficer |
|
Term—Indefinite
Length of
Service—
Since 2022 |
|
Managing Director, Chief Compliance Officer of Nuveen (since 2022); formerly, Vice President (2014-2022), Chief Compliance Officer and Anti-Money Laundering Compliance Officer (2017-2022), Deputy Chief Compliance Officer (2014-2017)
of BMO Funds Inc. |
|
|
|
|
| Mark J. Czarniecki 901 Marquette Avenue
Minneapolis, MN 55402 (1979) |
|
Vice President
and Assistant
Secretary |
|
Term—Indefinite
Length of
Service—
Since 2013 |
|
Managing Director (since 2022), formerly, Vice President (2016-2022), and Assistant Secretary (since 2016) of Nuveen Securities, LLC; Managing Director (since 2022), formerly, Vice President (2017-2022) and Assistant Secretary
(since 2017) of Nuveen Fund Advisors, LLC; Managing Director (since 2022), formerly, Vice President (2018-2022), Associate General Counsel and Assistant Secretary (since 2018) of Nuveen Asset Management, LLC; Managing Director and Associate General
Counsel (since 2022), formerly, Vice President and Associate General Counsel of Nuveen (2013-2021); Managing Director, Associate General Counsel and Assistant Secretary of Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC (since
2023) |
32
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the
Fund Complex |
|
Principal Occupation(s)
During Past Five Years |
|
|
|
|
| Diana R. Gonzalez 333 West Wacker Drive
Chicago, IL 60606 (1978) |
|
Vice President
and Assistant
Secretary |
|
Term—Indefinite
Length of
Service—
Since 2017 |
|
Vice President and Assistant Secretary of Nuveen Fund Advisors, LLC (since 2017); Vice President, Associate General Counsel and Assistant Secretary of Nuveen Asset Management, LLC (since 2022); Vice President, Associate General
Counsel and Assistant Secretary of Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC (since 2023); Vice President and Associate General Counsel of Nuveen (since 2017); formerly, Associate General Counsel of Jackson National Asset
Management (2012-2017) |
|
|
|
|
| Nathaniel T. Jones
333 West Wacker Drive Chicago, IL 60606
(1979) |
|
Vice President
and Treasurer |
|
Term—Indefinite
Length of
Service—
Since 2016 |
|
Senior Managing Director (since 2021), formerly, Managing Director (2017-2021), Senior Vice President (2016-2017) of Nuveen; Managing Director (since 2015) of Nuveen Fund Advisors, LLC; Chartered Financial Analyst |
|
|
|
|
| Brian H. Lawrence 8500 Andrew Carnegie
Blvd. Charlotte, NC 28262 (1982) |
|
Vice President
and Assistant
Secretary |
|
Term—Indefinite
Length of
Service—
Since 2023 |
|
Vice President and Associate General Counsel of Nuveen (since 2023); Vice President, Associate General Counsel and Assistant Secretary (since 2023) of Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC; formerly
Corporate Counsel of Franklin Templeton (2018-2022) |
|
|
|
|
| Tina M. Lazar 333 West Wacker Drive
Chicago, IL 60606 (1961) |
|
Vice President |
|
Term—Indefinite
Length of
Service—
Since 2002 |
|
Managing Director (since 2017), formerly, Senior Vice President (2014-2017) of Nuveen Securities, LLC |
|
|
|
|
| Brian J. Lockhart
333 West Wacker Drive Chicago, IL 60606
(1974) |
|
Vice President |
|
Term—Indefinite
Length of
Service—
Since 2019 |
|
Managing Director (since 2019) of Nuveen Fund Advisors, LLC; Senior Managing Director (since 2021), formerly, Managing Director (2017- 2021), Vice President (2010-2017) of Nuveen; Head of Investment Oversight (since 2017), formerly,
Team Leader of Manager Oversight (2015-2017); Chartered Financial Analyst and Certified Financial Risk Manager |
33
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the
Fund Complex |
|
Principal Occupation(s)
During Past Five Years |
|
|
|
|
| John M. McCann 8500 Andrew Carnegie
Blvd. Charlotte, NC 28262
(1975) |
|
Vice President
and Assistant
Secretary |
|
Term—Indefinite
Length of
Service—
Since 2022 |
|
Managing Director (since 2021), General Counsel and Secretary (since 2023), formerly, Assistant Secretary (2021-2023), of Nuveen Fund Advisors, LLC; Managing Director, Associate General Counsel and Assistant Secretary of Nuveen
Asset Management, LLC (since 2021); Managing Director (since 2021) and Assistant Secretary (since 2016) of TIAA SMA Strategies LLC; Managing Director (since 2019), formerly, Vice President and Director, Associate General Counsel and Assistant
Secretary of the College Retirement Equities Fund, TIAA Separate Account VA-1, TIAA-CREF Funds and TIAA-CREF Life Funds; Managing Director (since 2018), formerly, Vice President and Director, Associate General
Counsel and Assistant Secretary of Teachers Insurance and Annuity Association of America, Teacher Advisors LLC and TIAA-CREF Investment Management, LLC; Managing Director (since 2022), formerly, Vice President (2017-2022), Associate General Counsel
and Assistant Secretary (since 2011) of Nuveen Alternative Advisors LLC; General Counsel and Assistant Secretary of Covariance Capital Management, Inc. (2014-2017) |
34
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the
Fund Complex |
|
Principal Occupation(s)
During Past Five Years |
|
|
|
|
| Kevin J. McCarthy 333 West Wacker Drive
Chicago, IL 60606 (1966) |
|
Vice
President
and
Assistant
Secretary |
|
Term—Indefinite
Length of
Service—
Since 2007 |
|
Executive Vice President (since 2022) and Secretary and General Counsel (since 2016) of Nuveen Investments, Inc., formerly, Senior Managing Director (2017-2022); Executive Vice President (since 2023) and Assistant Secretary (since
2008) of Nuveen Securities, LLC, formerly, Senior Managing Director (2017-2023); Executive Vice President and Assistant Secretary (since 2023) of Nuveen Fund Advisors, LLC, formerly, Senior Managing Director (2017-2023), Secretary (2016-2023) and Co-General Counsel (2011-2020); Executive Vice President (since 2023) and Secretary (since 2016) of Nuveen Asset Management, LLC, formerly, Senior Managing Director (2017-2023) and Associate General Counsel
(2011-2020); Executive Vice President (since 2021) and Secretary (since 2023) of Teachers Advisors, LLC, formerly, General Counsel and Assistant Secretary (2021-2023); Executive Vice President (since 2017) and Secretary (since 2023) of TIAA-CREF
Investment Management, LLC, formerly, General Counsel and Assistant Secretary (2017-2023); formerly, Vice President (2007-2021) and Secretary (2016-2021) of NWQ Investment Management Company, LLC and Santa Barbara Asset Management, LLC; Vice
President and Secretary of Winslow Capital Management, LLC (since 2010); Executive Vice President (since 2023) and Secretary (since 2016) of Nuveen Alternative Investments, LLC, formerly, Senior Managing Director
(2017-2023) |
35
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the
Fund Complex |
|
Principal Occupation(s)
During Past Five Years |
|
|
|
|
| Jon Scott Meissner 8500 Andrew Carnegie
Blvd. Charlotte, NC 28262 (1973) |
|
Vice President
and Assistant
Secretary |
|
Term—Indefinite
Length of
Service—
Since 2019 |
|
Managing Director, Mutual Fund Tax and Expense Administration (since 2022), formerly, Managing Director of Mutual Fund Tax and Financial Reporting groups (2017-2022),at Nuveen; Managing Director (since 2019) of Nuveen Fund Advisors,
LLC; Managing Director (since 2021), formerly, Senior Director (2016-2021), of Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC; Managing Director, Mutual Fund and Tax Expense Administration (since 2022), formerly, Senior Director,
Mutual Fund Taxation (2015-2022) to the TIAA-CREF Funds, the TIAA-CREF Life Funds, the TIAA Separate Account VA-1 and the CREF Accounts; has held various positions with TIAA since 2004 |
|
|
|
|
| William A. Siffermann 333 West Wacker Drive
Chicago, IL 60606 (1975) |
|
Vice President |
|
Term—Indefinite
Length of
Service—
Since 2017 |
|
Managing Director (since 2017), formerly, Senior Vice President (2016-2017) of Nuveen |
|
|
|
|
| Trey S. Stenersen 8500 Andrew Carnegie
Blvd. Charlotte, NC 28262 (1965) |
|
Vice President |
|
Term—Indefinite
Length of
Service—
Since 2022 |
|
Senior Managing Director of Teacher Advisors LLC and TIAA-CREF Investment Management, LLC (since 2018); Senior Managing Director (since 2019) and Chief Risk Officer (since 2022), formerly Head of Investment Risk Management
(2017-2022) of Nuveen; Senior Managing Director (since 2018) of Nuveen Alternative Advisors LLC |
36
|
|
|
|
|
|
|
| Name, Business Address
and Year of Birth |
|
Position(s)
Held with
Fund |
|
Term of Office
and Length of
Time Served with
Funds in the
Fund Complex |
|
Principal Occupation(s)
During Past Five Years |
|
|
|
|
| E. Scott Wickerham 8500 Andrew Carnegie
Boulevard Charlotte, NC 28262
(1973) |
|
Vice President
and Controller |
|
Term—Indefinite
Length of
Service—
Since 2019 |
|
Senior Managing Director, Head of Public Investment Finance at Nuveen (since 2019), formerly, Managing Director, Senior Managing Director (since 2019) of Nuveen Fund Advisors, LLC; Senior Managing Director (since 2022) of Nuveen
Asset Management, LLC; Principal Financial Officer, Principal Accounting Officer and Treasurer (since 2017) of the TIAA-CREF Funds, the TIAA-CREF Life Funds, the TIAA Separate Account VA-1 and
Principal Financial Officer, Principal Accounting Officer (since 2020) and Treasurer (since 2017) to the CREF Accounts; has held various positions with TIAA since 2006 |
|
|
|
|
| Mark L. Winget 333 West Wacker Drive
Chicago, IL 60606 (1968) |
|
Vice President
and Secretary |
|
Term—Indefinite
Length of
Service—
Since 2008 |
|
Vice President and Assistant Secretary of Nuveen Securities, LLC (since 2008); Vice President and Assistant Secretary of Nuveen Fund Advisors, LLC (since 2019); Vice President, Associate General Counsel and Assistant Secretary of
Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC (since 2023) and Nuveen Asset Management, LLC (since 2020); Vice President (since 2010) and Associate General Counsel (since 2019) of Nuveen |
|
|
|
|
| Rachael Zufall 8500 Andrew Carnegie Blvd.
Charlotte, NC 28262 1973 |
|
Vice President
and Assistant
Secretary |
|
Term—Indefinite
Length of
Service—
Since 2022 |
|
Managing Director and Assistant Secretary (since 2023) of Nuveen Fund Advisors, LLC; Managing Director (since 2017), Associate General Counsel and Assistant Secretary (since 2014) of the CREF Accounts, TIAA Separate Account VA-1, TIAA-CREF Funds and TIAA-CREF Life Funds; Managing Director (since 2017), Associate General Counsel and Assistant Secretary (since 2011) of Teacher Advisors, LLC and TIAA-CREF Investment Management, LLC;
Managing Director of Nuveen, LLC and of TIAA (since 2017) |
37
Board Leadership Structure and Risk Oversight
The Board of Directors or the Board of Trustees (as the case may be, each is referred to hereafter as the “Board” and the trustees
or directors of the Nuveen Funds, as applicable, are referred to herein as “Directors”) oversees the operations and management of the Nuveen Funds, including the duties performed for the Nuveen Funds by Nuveen Fund Advisors and each Nuveen
Fund’s sub-adviser(s), as applicable. The Board has adopted a unitary board structure. A unitary board consists of one group of directors who serve on the board of every Nuveen Fund in the fund complex.
In adopting a unitary board structure, the Directors seek to provide effective governance through establishing a board, the overall composition of which, will, as a body, possess the appropriate skills, diversity (including, among other things,
gender, race and ethnicity), independence and experience to oversee the Fund’s business. With this overall framework in mind, when the Board, through its Nominating and Governance Committee discussed below, seeks nominees for the Board, the
Directors consider, not only the candidate’s particular background, skills and experience, among other things, but also whether such background, skills and experience enhance the Board’s diversity and at the same time complement the Board
given its current composition and the mix of skills and experiences of the incumbent Directors. The Nominating and Governance Committee believes that the Board generally benefits from diversity of background (including, among other things, gender,
race and ethnicity), skills, experience and views among its members, and considers this a factor in evaluating the composition of the Board, but has not adopted any specific policy on diversity or any particular definition of diversity.
The Board believes the unitary board structure enhances good and effective governance, particularly given the nature of the structure of the
investment company complex. Funds in the same complex generally are served by the same service providers and personnel and are governed by the same regulatory scheme which raises common issues that must be addressed by the Directors across the fund
complex (such as compliance, valuation, liquidity, brokerage, trade allocation or risk management). The Board believes it is more efficient to have a single board review and oversee common policies and procedures which increases the Board’s
knowledge and expertise with respect to the many aspects of fund operations that are complex-wide in nature. The unitary structure also enhances the Board’s influence and oversight over Nuveen Fund Advisors and other service providers.
In an effort to enhance the independence of the Board, the Board also has a Chair that is an independent director. The Board recognizes that a
chair can perform an important role in setting the agenda for the Board, establishing the boardroom culture, establishing a point person on behalf of the Board for fund management, and reinforcing the Board’s focus on the long-term interests of
shareholders. The Board recognizes that a chair may be able to better perform these functions without any conflicts of interests arising from a position with fund management. Accordingly, the Directors have elected Terence J. Toth as the independent
chair of the Board. Pursuant to the Fund’s By-Laws, the Chair shall perform all duties incident to the office of Chair of the Board and such other duties as from time to time may be assigned to him or her by the Directors or the By-Laws.
Although the Board has direct responsibility over various matters (such as advisory contracts
and underwriting contracts), the Board also exercises certain of its oversight responsibilities through several committees that it has established and which report back to the full Board. The Board believes that a committee structure is an effective
means to permit Directors to focus on particular operations or issues affecting the Nuveen Funds, including risk oversight. More specifically, with respect to risk oversight, the Board has delegated matters relating to valuation, compliance and
investment risk to certain committees (as summarized below). In addition, the Board believes that the periodic rotation of Directors among the different committees allows the Directors to gain additional and different perspectives of the Fund’s
operations. The Board has established seven standing committees: the Executive Committee, the Dividend Committee, the Closed-End Funds Committee, the Audit Committee, the Compliance, Risk Management and
Regulatory Oversight Committee, the Nominating and Governance Committee, and the Investment Committee. The Board also may from time to time create ad hoc committees to focus on particular issues as the need arises. The membership and functions of
the standing committees are summarized below. For more information on the Board, please visit https://www.nuveen.com/en-us/investments/fund-governance.
38
The Executive Committee, which meets between regular meetings of the Board, is authorized to
exercise all of the powers of the Board. Mr. Toth, Chair, Mr. Nelson and Mr. Young serve as the current members of the Executive Committee of the Board. During the fiscal year ended October 31, 2022, the Executive Committee did
not meet.
The Dividend Committee is authorized to declare distributions on each Nuveen Fund’s shares including, but not limited to,
regular and special dividends, capital gains and ordinary income distributions. The members of the Dividend Committee are Mr. Young, Chair, Ms. Lancellotta, Mr. Nelson and Mr. Thornton. During the fiscal year ended
October 31, 2022, the Dividend Committee met seven (7) times.
The Board has an Audit Committee, in accordance with
Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “1934 Act”), that is composed of Independent Board Members who are also “independent” as that term is defined in the listing standards of the NYSE
pertaining to closed-end funds. The Audit Committee assists the Board in the oversight and monitoring of the accounting and reporting policies, processes and practices of the Nuveen Funds, and the audits of
the financial statements of the Nuveen Funds; the quality and integrity of the financial statements of the Nuveen Funds; the Nuveen Funds’ compliance with legal and regulatory requirements relating to the Nuveen Funds’ financial
statements; the independent auditors’ qualifications, performance and independence; and the pricing procedures of the Nuveen Funds and the internal valuation group of Nuveen. It is the responsibility of the Audit Committee to select, evaluate
and replace any independent auditors (subject only to Board and, if applicable, shareholder ratification) and to determine their compensation. The Audit Committee is also responsible for, among other things, overseeing the valuation of securities
comprising the Nuveen Funds’ portfolios. Subject to the Adviser’s general supervision of such actions through its role as valuation designee, the Audit Committee addresses any valuation issues, oversees the Nuveen Funds’ pricing
procedures and actions taken by Nuveen’s internal valuation group which provides regular reports to the committee, reviews any issues relating to the valuation of the Nuveen Funds’ securities brought to its attention and considers the
risks to the Nuveen Funds in assessing the possible resolutions to these matters. The Audit Committee also may consider any financial risk exposures for the Nuveen Funds in conjunction with performing its functions.
To fulfill its oversight duties, the Audit Committee receives annual and semi-annual reports and has regular meetings with the external
auditors for the Nuveen Funds and Nuveen Fund Advisors’ internal audit group at Nuveen Investments. The Audit Committee also may review in a general manner the processes the Board or other Board committees have in place with respect to risk
assessment and risk management as well as compliance with legal and regulatory matters relating to the Nuveen Funds’ financial statements. The committee operates under a written charter adopted and approved by the Board. Members of the Audit
Committee shall be independent (as set forth in the charter) and free of any relationship that, in the opinion of the directors, would interfere with their exercise of independent judgment as an Audit Committee member. The members of the Audit
Committee are Mr. Nelson, Chair, Mr. Evans, Mr. Moschner, Ms. Wolff and Mr. Young, each of whom is an Independent Director of the Nuveen Funds. During the fiscal year ended October 31, 2022, the Audit Committee met four
(4) times.
The Compliance, Risk Management and Regulatory Oversight Committee (the “Compliance Committee”) is responsible
for the oversight of compliance issues, risk management and other regulatory matters affecting the Fund that are not otherwise under or within the jurisdiction of the other committees. The Board has adopted and periodically reviews policies and
procedures designed to address the Fund’s compliance and risk matters. As part of its duties, the Compliance Committee reviews the policies and procedures relating to compliance matters and recommends modifications thereto as necessary or
appropriate to the full Board; develops new policies and procedures as new regulatory matters affecting the Fund arise from time to time; evaluates or considers any comments or reports from examinations from regulatory authorities and responses
thereto; and performs any special reviews, investigations or other oversight responsibilities relating to risk management, compliance and/or regulatory matters as requested by the Board.
39
In addition, the Compliance Committee is responsible for risk oversight, including, but not
limited to, the oversight of general risks related to investments which are not reviewed by other committees, such as liquidity and derivatives usage; risks related to product structure elements, such as leverage; techniques that may be used to
address the foregoing risks, such as hedging and swaps; and Fund operational risk and risks related to the overall operation of the Nuveen enterprise and, in each case, the controls designed to address or mitigate such risks. In assessing issues
brought to the Compliance Committee’s attention or in reviewing a particular policy, procedure, investment technique or strategy, the Compliance Committee evaluates the risks to the Fund in adopting a particular approach or resolution compared
to the anticipated benefits to the Fund and its shareholders. In fulfilling its obligations, the Compliance Committee meets on a quarterly basis, and at least once a year in person. The Compliance Committee receives written and oral reports from the
Fund’s Chief Compliance Officer (“CCO”) and meets privately with the CCO at each of its quarterly meetings. The CCO also provides an annual report to the full Board regarding the operations of the Fund’s and other service
providers’ compliance programs as well as any recommendations for modifications thereto. Matters not addressed at the committee level are addressed directly by the full Board. The Compliance Committee operates under a written charter adopted
and approved by the Board. The members of the Compliance Committee are Ms. Wolff, Chair, Dr. Hunter, Ms. Lancellotta, Ms. Medero, Mr. Thornton and Mr. Toth. During the fiscal year ended October 31, 2022, the
Compliance Committee met four (4) times.
The Nominating and Governance Committee is responsible for seeking, identifying and
recommending to the Board qualified candidates for election or appointment to the Board. In addition, the Nominating and Governance Committee oversees matters of corporate governance, including the evaluation of Board performance and processes, the
assignment and rotation of committee members, and the establishment of corporate governance guidelines and procedures, to the extent necessary or desirable, and matters related thereto. Although the unitary and committee structure has been developed
over the years and the Nominating and Governance Committee believes the structure has provided efficient and effective governance, the Nominating and Governance Committee recognizes that as demands on the Board evolve over time (such as through an
increase in the number of funds overseen or an increase in the complexity of the issues raised), the committee must continue to evaluate the Board and committee structures and their processes and modify the foregoing as may be necessary or
appropriate to continue to provide effective governance. Accordingly, the Nominating and Governance Committee has a separate meeting each year to, among other things, review the Board and committee structures, their performance and functions, and
recommend any modifications thereto or alternative structures or processes that would enhance the Board’s governance over the Fund’s business.
In addition, the Nominating and Governance Committee, among other things, makes recommendations concerning the continuing education of
directors; monitors performance of legal counsel and other service providers; establishes and monitors a process by which security holders are able to communicate in writing with members of the Board; and periodically reviews and makes
recommendations about any appropriate changes to Director compensation. In the event of a vacancy on the Board, the Nominating and Governance Committee receives suggestions from various sources, including suggestions from fund security holders, as
to suitable candidates. Suggestions should be sent in writing to William Siffermann, Manager of Fund Board Relations, Nuveen LLC, 333 West Wacker Drive, Chicago, Illinois 60606. The Nominating and Governance Committee sets appropriate standards
and requirements for nominations for new Directors and reserves the right to interview any and all candidates and to make the final selection of any new Directors. In considering a candidate’s qualifications, each candidate must meet certain
basic requirements, including relevant skills and experience, time availability (including the time requirements for due diligence site visits to internal and external sub-advisers and service providers) and,
if qualifying as an Independent Director candidate, independence from Nuveen Fund Advisors, sub-advisers, underwriters or other service providers, including any affiliates of these entities. These skill and
experience requirements may vary depending on the current composition of the Board, since the goal is to ensure an appropriate range of skills, diversity and experience, in the aggregate. Accordingly, the particular factors considered and weight
given to these factors will depend on the composition of the Board and the skills and backgrounds of the incumbent Directors at the time of consideration of the nominees. All candidates, however, must meet high expectations of personal integrity,
independence, governance experience
40
and professional competence. All candidates must be willing to be critical within the Board and with management and yet maintain a collegial and collaborative manner toward other Board members.
The committee operates under a written charter adopted and approved by the Board. This committee is composed of the Independent Directors of the Nuveen Funds. Accordingly, the members of the Nominating and Governance Committee are Mr. Toth,
Chair, Mr. Evans, Dr. Hunter, Ms. Lancellotta, Ms. Medero, Mr. Moschner, Mr. Nelson, Mr. Thornton, Ms. Wolff and Mr. Young. During the fiscal year ended October 31, 2022, the Nominating and
Governance Committee met six (6) times.
The Investment Committee is responsible for the oversight of Fund performance, investment
risk management and other portfolio-related matters affecting the Fund which are not otherwise the jurisdiction of the other Board committees. As part of such oversight, the Investment Committee reviews the Fund’s investment performance and
investment risks, which may include, but is not limited to, an evaluation of Fund performance relative to investment objectives, benchmarks and peer group; a review of risks related to portfolio investments, such as exposures to particular issuers,
market sectors, or types of securities, as well as consideration of other factors that could impact or are related to Fund performance; and an assessment of Fund objectives, policies and practices as such may relate to Fund performance. In assessing
issues brought to the committee’s attention or in reviewing an investment policy, technique or strategy, the Investment Committee evaluates the risks to the Fund in adopting or recommending a particular approach or resolution compared to the
anticipated benefits to the Fund and its holders of Common Stock.
In fulfilling its obligations, the Investment Committee receives
quarterly reports from the investment oversight and the investment risk groups at Nuveen. Such groups also report to the full Board on a quarterly basis and the full Board participates in further discussions with fund management at its quarterly
meetings regarding matters relating to Fund performance and investment risks, including with respect to the various drivers of performance and Fund use of leverage and hedging. Accordingly, the Board directly and/or in conjunction with the
Investment Committee oversees the investment performance and investment risk management of the Fund. The Investment Committee operates under a written charter adopted and approved by the Board. This committee is composed of the independent Trustees
of the Fund. Accordingly, the members of the Investment Committee are Dr. Hunter, Chair, Mr. Evans, Ms. Lancellotta, Ms. Medero, Mr. Moschner, Mr. Nelson, Ms. Stockdale, Ms. Stone, Mr. Thornton,
Mr. Toth, Ms. Wolff and Mr. Young. During the fiscal year ended October 31, 2022, the Investment Committee did not meet.
The Closed-End Funds Committee receives updates on the secondary
closed-end fund market and evaluates the premiums and discounts of the Nuveen closed-end funds, including the Fund, at each quarterly meeting. The Closed-End Funds Committee reviews, among other things, the premium and discount trends in the broader closed-end fund market, by asset category and by closed-end fund; the historical total return performance data for the Nuveen closed-end funds, including the Fund, based on net asset value and price over various periods; the
volatility trends in the market; the use of leverage by the Nuveen closed-end funds, including the Fund; the distribution data of the Nuveen closed-end funds, including
the Fund, and as compared to peer averages; and a summary of common share issuances, if any, and share repurchases, if any, during the applicable quarter by the Nuveen closed-end funds, including the Fund. The
Closed-End Funds Committee regularly engages in more in-depth discussions of premiums and discounts of the Nuveen closed-end
funds. Additionally, the Closed-End Funds Committee members participate in workshops to explore, among other things, actions to address discounts of the Nuveen
closed-end funds, potential share repurchases and available leverage strategies and their use. The committee operates under a written charter adopted and approved by the Board. The members of the Closed-End Funds Committee are Mr. Evans, Chair, Dr. Hunter, Ms. Lancellotta, Mr. Nelson, Mr. Toth and Ms. Wolff. During the fiscal year ended October 31, 2022, the Closed-End Funds Committee met four (4) times.
41
Board Diversification and Director Qualifications
Listed below for each current Board member are the experiences, qualifications, attributes and skills that led to the conclusion, as of the
date of this document, that each current trustee should serve as a trustee of the Fund.
Jack B. Evans. Mr. Evans
has served as Chairman (since 2019), formerly, President from 1996-2019 of the Hall-Perrine Foundation, a private philanthropic corporation. Mr. Evans was formerly President and Chief Operating Officer (1972-1995) of the SCI Financial Group,
Inc., a regional financial services firm headquartered in Cedar Rapids, Iowa. Formerly, he was a member of the Board of the Federal Reserve Bank of Chicago from 1997 to 2003 as well as a Director of Alliant Energy from 2000 to 2004 and Member and
President Pro Tem of the Board of Regents for the State of Iowa University System from 2007 to 2013. Mr. Evans is a Life Trustee of Coe College and formerly served as Chairman of the Board of United Fire Group from 2009 to 2021, served as a
Director and Public Member of the American Board of Orthopaedic Surgery from 2015 to 2020 and served on the Board of The Gazette Company from 1996 to 2015. He has a Bachelor of Arts from Coe College and an M.B.A. from the University of Iowa.
Mr. Evans joined the Board in 1999.
William C. Hunter. Dr. Hunter became Dean Emeritus of the Henry B.
Tippie College of Business at the University of Iowa in 2012, after having served as Dean of the College since July 2006. He had been Dean and Distinguished Professor of Finance at the University of Connecticut School of Business from 2003 to 2006.
From 1995 to 2003, he was the Senior Vice President and Director of Research at the Federal Reserve Bank of Chicago. He has held faculty positions at Emory University, Atlanta University, the University of Georgia and Northwestern University. He has
consulted with numerous foreign central banks and official agencies in Europe, Asia, Central America and South America. He has been a Director of Wellmark, Inc. since 2009. He is a past Director (2005-2015) and a past President (2010-2014) of Beta
Gamma Sigma, Inc., The International Business Honor Society, and a past Director (2004-2018) of the Xerox Corporation. Dr. Hunter received his PhD (1978) and MBA (1970) from Northwestern University and his BS from Hampton University
(1970). Dr. Hunter joined the Board in 2004.
Amy B. R. Lancellotta. After 30 years of service,
Ms. Lancellotta retired at the end of 2019 from the Investment Company Institute (ICI), which represents regulated investment companies on regulatory, legislative and securities industry initiatives that affect funds and their shareholders.
From November 2006 until her retirement, Ms. Lancellotta served as Managing Director of ICI’s Independent Directors Council (IDC), which supports fund independent directors in fulfilling their responsibilities to promote and protect the
interests of fund shareholders. At IDC, Ms. Lancellotta was responsible for all ICI and IDC activities relating to the fund independent director community. In conjunction with her responsibilities, Ms. Lancellotta advised and represented
IDC, ICI, independent directors and the investment company industry on issues relating to fund governance and the role of fund directors. She also directed and coordinated IDC’s education, communication, governance and policy initiatives. Prior
to serving as Managing Director of IDC, Ms. Lancellotta held various other positions with ICI beginning in 1989. Before joining ICI, Ms. Lancellotta was an associate at two Washington, D.C. law firms. In addition, since 2020, she has been
a member of the Board of Directors of the Jewish Coalition Against Domestic Abuse (JCADA), an organization that seeks to end power-based violence, empower survivors and ensure safe communities. Ms. Lancellotta received a B.A. degree from
Pennsylvania State University in 1981 and a J.D. degree from the National Law Center, George Washington University (currently known as George Washington University Law School) in 1984. Ms. Lancellotta joined the Board in 2021.
Joanne T. Medero. Ms. Medero has over 30 years of financial services experience and, most recently, from December
2009 until her retirement in July 2020, she was a Managing Director in the Government Relations and Public Policy Group at BlackRock, Inc. (BlackRock). From July 2018 to July 2020, she was also Senior Advisor to BlackRock’s Vice Chairman,
focusing on public policy and corporate governance issues. In 1996, Ms. Medero joined Barclays Global Investors (BGI), which merged with BlackRock in 2009. At BGI, she
42
was a Managing Director and served as Global General Counsel and Corporate Secretary until 2006. Then, from 2006 to 2009, Ms. Medero was a Managing Director and Global Head of Government
Relations and Public Policy at Barclays Group (IBIM), where she provided policy guidance and directed legislative and regulatory advocacy programs for the investment banking, investment management and wealth management businesses. Before joining
BGI, Ms. Medero was a Partner at Orrick, Herrington & Sutcliffe LLP from 1993 to 1995, where she specialized in derivatives and financial markets regulation issues. Additionally, she served as General Counsel of the Commodity Futures
Trading Commission (the “CFTC”) from 1989 to 1993 and, from 1986 to 1989, she was Deputy Associate Director/Associate Director for Legal and Financial Affairs at The White House Office of Presidential Personnel. Further, from 2006 to 2010,
Ms. Medero was a member of the CFTC Global Markets Advisory Committee and she has been actively involved in financial industry associations, serving as Chair of the Steering Committee of the SIFMA (Securities Industry and Financial Markets
Association) Asset Management Group (2016-2018) and Chair of the CTA (Commodity Trading Advisor), CPO (Commodity Pool Operator) and Futures Committee of the Managed Funds Association (2010-2012). Ms. Medero also chaired the Corporations,
Antitrust and Securities Practice Group of The Federalist Society for Law and Public Policy (from 2010-2022 and 2000-2002). In addition, since 2019, she has been a member of the Board of Directors of the Baltic-American Freedom Foundation, which
seeks to provide opportunities for citizens of the Baltic states to gain education and professional development through exchanges in the United States. Ms. Medero received a B.A. degree from St. Lawrence University in 1975 and a J.D. degree
from the National Law Center, George Washington University (currently known as George Washington University Law School) in 1978. Ms. Medero joined the Board in 2021.
Albin F. Moschner. Mr. Moschner is a consultant in the wireless industry and, in July 2012, founded Northcroft
Partners, LLC, a management consulting firm that provides operational, management and governance solutions. Prior to founding Northcroft Partners, LLC, Mr. Moschner held various positions at Leap Wireless International, Inc., a provider of
wireless services, where he was a consultant from February 2011 to July 2012, Chief Operating Officer from July 2008 to February 2011, and Chief Marketing Officer from August 2004 to June 2008. Before he joined Leap Wireless International, Inc.,
Mr. Moschner was President of the Verizon Card Services division of Verizon Communications, Inc. from 2000 to 2003, and President of One Point Services at One Point Communications from 1999 to 2000. Mr. Moschner also served at Zenith
Electronics Corporation as Director, President and Chief Executive Officer from 1995 to 1996, and as Director, President and Chief Operating Officer from 1994 to 1995. Mr. Moschner was formerly Chairman (2019) and a member of the Board of
Directors (2012-2019) of USA Technologies, Inc. and, from 1996 until 2016, he was a member of the Board of Directors of Wintrust Financial Corporation. In addition, he is emeritus (since 2018) of the Advisory Boards of the Kellogg School of
Management (1995-2018) and the Archdiocese of Chicago Financial Council (2012-2018). Mr. Moschner received a Bachelor of Engineering degree in Electrical Engineering from The City College of New York in 1974 and a Master of Science degree in
Electrical Engineering from Syracuse University in 1979. Mr. Moschner joined the Board in 2016.
John K.
Nelson. Mr. Nelson is on the Board of Directors of Core12, LLC (since 2008), a private firm which develops branding, marketing, and communications strategies for clients. Mr. Nelson has extensive experience in global banking
and markets, having served in several senior executive positions with ABN AMRO Holdings N.V. and its affiliated entities and predecessors, including LaSalle Bank Corporation from 1996 to 2008, ultimately serving as Chief Executive Officer of ABN
AMRO N.V. North America. During his tenure at the bank, he also served as Global Head of its Financial Markets Division, which encompassed the bank’s Currency, Commodity, Fixed Income, Emerging Markets, and Derivatives businesses. He was a
member of the Foreign Exchange Committee of the Federal Reserve Bank of the United States and during his tenure with ABN AMRO served as the bank’s representative on various committees of The Bank of Canada, European Central Bank, and The Bank
of England. Mr. Nelson previously served as a senior, external advisor to the financial services practice of Deloitte Consulting LLP (2012-2014). At Fordham University, he served as a director of The President’s Council (2010-2019) and
previously served as a director of The Curran Center for Catholic American Studies (2009-2018). He served as a trustee and Chairman of The Board of Trustees of Marian University (2011-
43
2013). Mr. Nelson is a graduate of Fordham University, holding a BA in Economics and an MBA in Finance. Mr. Nelson joined the Board in 2013.
Matthew Thornton III. Mr. Thornton has over 40 years of broad leadership and operating experience from his career
with FedEx Corporation (“FedEx”), which, through its portfolio of companies, provides transportation, e-commerce and business services. In November 2019, Mr. Thornton retired as Executive Vice
President and Chief Operating Officer of FedEx Freight Corporation (FedEx Freight), a subsidiary of FedEx, where, from May 2018 until his retirement, he had been responsible for
day-to-day operations, strategic guidance, modernization of freight operations and delivering innovative customer solutions. From September 2006 to May 2018,
Mr. Thornton served as Senior Vice President, U.S. Operations at Federal Express Corporation (FedEx Express), a subsidiary of FedEx. Prior to September 2006, Mr. Thornton held a range of positions of increasing responsibility with FedEx,
including various management positions. In addition, Mr. Thornton currently (since 2014) serves on the Board of Directors of The Sherwin-Williams Company, where he is a member of the Audit Committee and the Nominating and Corporate Governance
Committee, and the Board of Directors of Crown Castle International (since 2020), where he is a member of the Strategy Committee and the Compensation Committee. Formerly (2012-2018), he was a member of the Board of Directors of Safe Kids Worldwide®, a non-profit organization dedicated to the prevention of childhood injuries. Mr. Thornton is a member (since 2014) of the Executive Leadership
Council (ELC), the nation’s premier organization of global black senior executives. He is also a member of the National Association of Corporate Directors (NACD). Mr. Thornton has been recognized by Black Enterprise on its 2017 list of the
Most Powerful Executives in Corporate America and by Ebony on its 2016 Power 100 list of the world’s most influential and inspiring African Americans. Mr. Thornton received a B.B.A. degree from the University of Memphis in 1980 and an
M.B.A. from the University of Tennessee in 2001. Mr. Thornton joined the Board in 2020.
Terence J.
Toth. Mr. Toth, the Nuveen Funds’ Independent Chair, was a Co-Founding Partner of Promus Capital (2008-2017). From 2012 to 2021, he was a Director of Quality Control Corporation, from
2008 to 2013, he was a Director of Legal & General Investment Management America, Inc. From 2004 to 2007, he was Chief Executive Officer and President of Northern Trust Global Investments, and Executive Vice President of Quantitative
Management & Securities Lending from 2000 to 2004. He also formerly served on the Board of the Northern Trust Mutual Funds. He joined Northern Trust in 1994 after serving as Managing Director and Head of Global Securities Lending at Bankers
Trust (1986 to 1994) and Head of Government Trading and Cash Collateral Investment at Northern Trust from 1982 to 1986. He currently serves as Chair of the Board of the Kehrein Center for the Arts (since 2021) and is on the Board of Catalyst Schools
of Chicago since 2008. He is on the Mather Foundation Board since 2012 and was Chair of its Investment Committee from 2017 to 2022 and previously served as a Director of LogicMark LLC (2012-2016) and of Fulcrum IT Service LLC (2010-2019).
Mr. Toth graduated with a Bachelor of Science degree from the University of Illinois, and received his MBA from New York University. In 2005, he graduated from the CEO Perspectives Program at Northwestern University. Mr. Toth joined the
Board in 2008.
Margaret L. Wolff. Ms. Wolff retired from Skadden, Arps, Slate, Meagher & Flom LLP in
2014 after more than 30 years of providing client service in the Mergers & Acquisitions Group. During her legal career, Ms. Wolff devoted significant time to advising boards and senior management on U.S. and international corporate,
securities, regulatory and strategic matters, including governance, shareholder, fiduciary, operational and management issues. Ms. Wolff has been a trustee of New York-Presbyterian Hospital since 2005 and, since 2004, she has served as a
trustee of The John A. Hartford Foundation (a philanthropy dedicated to improving the care of older adults) where she formerly served as Chair from 2015 to 2022. From 2013 to 2017, she was a Board member of Travelers Insurance Company of Canada and
The Dominion of Canada General Insurance Company (each of which is a part of Travelers Canada, the Canadian operation of The Travelers Companies, Inc.). From 2005 to 2015, she was a trustee of Mt. Holyoke College and served as Vice Chair of the
Board from 2011 to 2015. Ms. Wolff received her Bachelor of Arts from Mt. Holyoke College and her Juris Doctor from Case Western Reserve University School of Law. Ms. Wolff joined the Board in 2016.
44
Robert L. Young. Mr. Young has more than 30 years of experience in the
investment management industry. From 1997 to 2017, he held various positions with J.P. Morgan Investment Management Inc. (“J.P. Morgan Investment”) and its affiliates (collectively, “J.P. Morgan”). Most recently, he served as
Chief Operating Officer and Director of J.P. Morgan Investment (from 2010 to 2016) and as President and Principal Executive Officer of the J.P. Morgan Funds (from 2013 to 2016). As Chief Operating Officer of J.P. Morgan Investment, Mr. Young
led service, administration and business platform support activities for J.P. Morgan’s domestic retail mutual fund and institutional commingled and separate account businesses, and co-led these
activities for J.P. Morgan’s global retail and institutional investment management businesses. As President of the J.P. Morgan Funds, Mr. Young interacted with various service providers to these funds, facilitated the relationship between
such funds and their boards, and was directly involved in establishing board agendas, addressing regulatory matters, and establishing policies and procedures. Before joining J.P. Morgan, Mr. Young, a former Certified Public Accountant (CPA),
was a Senior Manager (Audit) with Deloitte & Touche LLP (formerly, Touche Ross LLP), where he was employed from 1985 to 1996. During his tenure there, he actively participated in creating, and ultimately led, the firm’s midwestern
mutual fund practice. Mr. Young holds a Bachelor of Business Administration degree in Accounting from the University of Dayton and, from 2008 to 2011, he served on the investment committee of its board of trustees. Mr. Young joined the
Board in 2017.
Independent Chairman
Terence J. Toth currently serves as the independent Chairman of the Board. Specific responsibilities of the Chairman include
(a) presiding at all meetings of the Board and of the shareholders; (b) seeing that all orders and resolutions of the directors are carried into effect; and (c) maintaining records of and, whenever necessary, certifying all
proceedings of the directors and the shareholders.
SHARE OWNERSHIP
The following table sets forth the dollar range of equity securities beneficially owned by each Director as of June 30, 2023:
|
|
|
|
|
|
|
| Independent Directors |
|
Dollar Range
of Equity
Securities
in the Fund |
|
|
Aggregate Dollar Range
of Equity Securities in
All Registered
Investment Companies
Overseen by
Trustees in
Nuveen Family of Investment
Companies |
| Jack B. Evans |
|
|
None |
|
|
Over $100,000 |
|
|
|
| William C. Hunter |
|
|
None |
|
|
Over $100,000 |
|
|
|
| Amy B. R. Lancellotta |
|
|
None |
|
|
$50,001-$100,000 |
|
|
|
| Joanne T. Medero |
|
|
None |
|
|
Over $100,000 |
|
|
|
| Albin F. Moschner |
|
|
None |
|
|
Over $100,000 |
|
|
|
| John K. Nelson |
|
|
None |
|
|
Over $100,000 |
|
|
|
| Matthew Thornton III |
|
|
None |
|
|
Over $100,000 |
|
|
|
| Terence J. Toth |
|
|
None |
|
|
Over $100,000 |
|
|
|
| Margaret L. Wolff |
|
|
None |
|
|
Over $100,000 |
|
|
|
| Robert L. Young |
|
|
None |
|
|
Over $100,000 |
As of September 1, 2023, the officers and Directors as a group beneficially owned less than 1% of any
class of the Fund’s outstanding securities. Additionally, no disinterested director of the Fund or his or her
45
immediate family member owned beneficially or of record any security of Nuveen Fund Advisors, Nuveen Asset Management or Nuveen Investments (or any entity controlled by or under common control
with Nuveen Fund Advisors, Nuveen Asset Management or Nuveen Investments).
Control Persons and Principal Holders of Shares of Common Stock
As of August 31, 2023, no shareholders owned of record, or were known by the Fund to own of record or beneficially, five percent or more
of any class of shares of the Fund.
COMPENSATION
The following table shows, for each Independent Director, (1) the aggregate compensation paid by the Fund for its fiscal year ended
October 31, 2022, (2) the amount of total compensation paid by the Fund that has been deferred and (3) the total compensation paid to each Director by the Nuveen Funds during the calendar year ended December 31, 2022. The Fund does
not have a retirement or pension plan. The officers and Directors affiliated with Nuveen Investments serve without any compensation from the Fund. Certain of the Nuveen Funds have a deferred compensation plan (the “Compensation Plan”) that
permits any Director who is not an “interested person” of certain Nuveen Funds to elect to defer receipt of all or a portion of his or her compensation as a Director. The deferred compensation of a participating Director is credited to the
book reserve account of a Nuveen Fund when the compensation would otherwise have been paid to the Director. The value of the Director’s deferral account at any time is equal to the value that the account would have had if contributions to the
account had been invested and reinvested in shares of one or more of the eligible Nuveen Funds. At the time for commencing distributions from a Director’s deferral account, the Director may elect to receive distributions in a lump sum or over a
period of five years. The Fund will not be liable for any other Nuveen Fund’s obligations to make distributions under the Compensation Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
| Independent Trustees |
|
Aggregate
Compensation from Fund(1) |
|
|
Amount of Total
Compensation
From the Fund
That
Has
Been Deferred(2) |
|
|
Total Compensation from
Fund and Fund Complex(3) |
|
| Jack B. Evans |
|
$ |
266 |
|
|
$ |
18 |
|
|
$ |
412,281 |
|
|
|
|
|
| William C. Hunter |
|
|
249 |
|
|
|
— |
|
|
|
382,750 |
|
|
|
|
|
| Amy B.R. Lancellotta |
|
|
237 |
|
|
|
54 |
|
|
|
368,508 |
|
|
|
|
|
| Joanne T. Medero |
|
|
235 |
|
|
|
82 |
|
|
|
366,323 |
|
|
|
|
|
| Albin F. Moschner |
|
|
290 |
|
|
|
— |
|
|
|
443,950 |
|
|
|
|
|
| John K. Nelson |
|
|
277 |
|
|
|
— |
|
|
|
429,000 |
|
|
|
|
|
| Matthew Thornton III |
|
|
252 |
|
|
|
— |
|
|
|
390,250 |
|
|
|
|
|
| Terence J. Toth |
|
|
343 |
|
|
|
— |
|
|
|
526,950 |
|
|
|
|
|
| Margaret L. Wolff |
|
|
259 |
|
|
|
89 |
|
|
|
396,076 |
|
|
|
|
|
| Robert L. Young |
|
|
278 |
|
|
|
151 |
|
|
|
416,325 |
|
| (1) |
The compensation paid, including deferred amounts, to the independent Directors for the fiscal year ended
October 31, 2022 for services to the Fund. |
| (2) |
Pursuant to a deferred compensation agreement with certain of the Nuveen Funds, deferred amounts are treated as
though an equivalent dollar amount has been invested in shares of one or more eligible Nuveen Funds. Total deferred fees for the Fund (including the return from the assumed investment in the eligible Nuveen Funds) payable are stated above.
|
| (3) |
Based on the compensation paid (including any amounts deferred) for the calendar year ended December 31,
2022 for services to the Nuveen open-end and closed-end funds. Because the funds in the |
46
| |
Fund Complex have different fiscal year ends, the amounts shown in this column are presented on a calendar year basis. |
Prior to January 1, 2023, Independent Board Members received a $205,000 annual retainer, plus they received (a) a fee of $7,000 per
day for attendance in person or by telephone at regularly scheduled meetings of the Board; (b) a fee of $3,000 per meeting for attendance in person or by telephone at special, non-regularly scheduled
Board meetings where in-person attendance was required and $3,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance was
not required; (c) a fee of $2,500 per meeting for attendance in person or by telephone at Audit Committee meetings where in-person attendance was required and $2,250 per meeting for attendance by
telephone or in person at such meetings where in-person attendance was not required; (d) a fee of $5,000 per meeting for attendance in person or by telephone at Compliance, Risk Management and Regulatory
Oversight Committee meetings where in-person attendance was required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person
attendance was not required; (e) a fee of $1,250 per meeting for attendance in person or by telephone at Dividend Committee meetings; (f) a fee of $500 per meeting for attendance in person or by telephone at all other committee meetings
($1,000 for shareholder meetings) where in-person attendance was required and $250 per meeting for attendance by telephone or in person at such committee meetings (excluding shareholder meetings) where in-person attendance was not required, and $100 per meeting when the Executive Committee acted as pricing committee for IPOs, plus, in each case, expenses incurred in attending such meetings, provided that no fees
were received for meetings held on days on which regularly scheduled Board meetings were held; and (g) a fee of $2,500 per meeting for attendance in person or by telephone at Closed-End Funds Committee
meetings where in-person attendance was required and $2,000 per meeting for attendance by telephone or in person at such meetings where in-person attendance was not
required; provided that no fees were received for meetings held on days on which regularly scheduled Board meetings were held. In addition to the payments described above, the Chair of the Board received $125,000, and the chairpersons of the Audit
Committee, the Dividend Committee, the Compliance, Risk Management and Regulatory Oversight Committee, the Nominating and Governance Committee and the Closed-End Funds Committee received $20,000 each as
additional retainers. Independent Board Members also received a fee of $3,500 per day for site visits to entities that provide services to the Nuveen Funds on days on which no Board meeting was held. When ad hoc committees are organized, the
Nominating and Governance Committee at the time of formation determined compensation to be paid to the members of such committee; however, in general, such fees were $1,000 per meeting for attendance in person or by telephone at ad hoc committee
meetings where in-person attendance was required and $500 per meeting for attendance by telephone or in person at such meetings where in-person attendance was not
required. Any compensation paid to the Independent Board Members as members of ad hoc committees is temporary in nature and not expected to be long-term, ongoing compensation. The annual retainer, fees and expenses were allocated among the Nuveen
Funds on the basis of relative net assets, although management may have, in its discretion, established a minimum amount to be allocated to each fund. In certain instances, fees and expenses were allocated only to those Nuveen Funds that were
discussed at a given meeting. In certain circumstances, such as during the COVID-19 pandemic, the Board may have held in-person meetings by telephonic or videographic
means and were compensated at the in-person rate.
Effective January 1, 2023, Independent
Board Members receive a $210,000 annual retainer, plus they receive (a) a fee of $7,250 per day for attendance at regularly scheduled meetings of the Board; (b) a fee of $4,000 per meeting for attendance at special, non-regularly scheduled Board meetings; (c) a fee of $2,500 per meeting for attendance at Audit Committee meetings, Closed-End Fund Committee meetings and Investment
Committee Meetings; (d) a fee of $5,000 per meeting for attendance at Compliance, Risk Management and Regulatory Oversight Committee meetings; (e) a fee of $1,250 per meeting for attendance at Dividend Committee meetings; and (f) a
fee of $500 per meeting for attendance at all other committee meetings, and $100 per meeting when the Executive Committee acts as pricing committee for IPOs, plus, in each case, expenses incurred in attending such meetings, provided that no fees are
received for meetings held on days on which regularly scheduled Board meetings are held. In addition to the payments described above, the Chair of the Board receives $140,000, and the chairpersons of the Audit Committee, the Dividend Committee, the
Compliance, Risk Management and Regulatory Oversight Committee, the Nominating and
47
Governance Committee, the Closed-End Funds Committee and the Investment Committee receive $20,000 each as additional retainers. Independent Board Members
also receive a fee of $5,000 per day for site visits to entities that provide services to the Nuveen Funds on days on which no Board meeting is held. Per meeting fees for unscheduled Committee meetings or meetings of Ad Hoc or Special Assignment
Committees will be determined by the Chair of such Committee based on the complexity or time commitment associated with the particular meeting. The annual retainer, fees and expenses are allocated among the Nuveen Funds on the basis of relative net
assets, although management may, in its discretion, establish a minimum amount to be allocated to each fund. In certain instances, fees and expenses will be allocated only to those Nuveen Funds that are discussed at a given meeting.
INVESTMENT ADVISER, SUB-ADVISER AND PORTFOLIO MANAGER
Investment Adviser. Nuveen Fund Advisors, LLC, the Fund’s investment adviser, is responsible for overseeing the Fund’s
overall investment strategy and implementation. Nuveen Fund Advisors offers advisory and investment management services to a broad range of investment company clients. Nuveen Fund Advisors has overall responsibility for management of the Fund,
oversees the management of the Fund’s portfolio, manages the Fund’s business affairs and provides certain clerical, bookkeeping and other administrative services. Nuveen Fund Advisors is located at 333 West Wacker Drive, Chicago, Illinois
60606. Nuveen Fund Advisors is an indirect subsidiary of Nuveen, LLC (“Nuveen”), the investment management arm of Teachers Insurance and Annuity Association of America (“TIAA”). TIAA is a life insurance company founded in 1918 by
the Carnegie Foundation for the Advancement of Teaching and is the companion organization of College Retirement Equities Fund. As of June 30, 2023, Nuveen managed approximately $1.2 trillion in assets, of which approximately $140.9 billion
was managed by Nuveen Fund Advisors.
Investment Management Agreement and Related Fees. Pursuant to an investment management
agreement between Nuveen Fund Advisors and the Fund (the “Investment Management Agreement”), the Fund has agreed to pay an annual management fee for the overall advisory and administrative services and general office facilities provided by
Nuveen Fund Advisors. The Fund’s management fee is separated into two components—a complex-level component, based on the aggregate amount of all fund assets managed by Nuveen Fund Advisors, and a specific fund-level component, based only
on the amount of assets within the Fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by Nuveen Fund
Advisors.
Fund-Level Fee. The annual fund-level fee for the Fund, payable monthly, is calculated according to the following
schedule:
|
|
|
|
|
| Average Daily Net Assets |
|
Fund-Level Fee Rate |
|
| For the first $125 million |
|
|
0.4500 |
% |
| For the next $125 million |
|
|
0.4375 |
% |
| For the next $250 million |
|
|
0.4250 |
% |
| For the next $500 million |
|
|
0.4125 |
% |
| For the next $1 billion |
|
|
0.4000 |
% |
| For the next $3 billion |
|
|
0.3750 |
% |
| For net assets over $5 billion |
|
|
0.3625 |
% |
48
Complex-Level Fee. The annual complex-level fee for the Fund, payable monthly, is
calculated by multiplying the current complex-wide fee rate, determined according to the following schedule by the Fund’s daily net assets:
|
|
|
|
|
| Complex-Level Eligible
Asset Breakpoint Level* |
|
Effective Complex-Level
Fee Rate at
Breakpoint Level |
|
| $55 billion |
|
|
0.2000 |
% |
| $56 billion |
|
|
0.1996 |
% |
| $57 billion |
|
|
0.1989 |
% |
| $60 billion |
|
|
0.1961 |
% |
| $63 billion |
|
|
0.1931 |
% |
| $66 billion |
|
|
0.1900 |
% |
| $71 billion |
|
|
0.1851 |
% |
| $76 billion |
|
|
0.1806 |
% |
| $80 billion |
|
|
0.1773 |
% |
| $91 billion |
|
|
0.1691 |
% |
| $125 billion |
|
|
0.1599 |
% |
| $200 billion |
|
|
0.1505 |
% |
| $250 billion |
|
|
0.1469 |
% |
| $300 billion |
|
|
0.1445 |
% |
| * |
The complex-level fee is calculated based upon the aggregate daily “eligible assets” of all Nuveen open-end and closed-end funds. Eligible assets do not include assets attributable to investments in other Nuveen funds or assets in excess of a determined amount (originally
$2 billion) added to the Nuveen fund complex in connection with Nuveen Fund Advisors’ assumption of the management of the former First American Funds effective January 1, 2011, but do include certain assets of certain Nuveen funds that
were reorganized into funds advised by an affiliate of Nuveen Fund Advisors during the 2019 calendar year. Eligible assets include closed-end fund assets managed by Nuveen Fund Advisors that are attributable
to certain types of leverage. For these purposes, leverage includes the closed-end funds’ use of preferred stock and borrowings and certain investments in the residual interest certificates (also called
inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by the TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by
Nuveen Fund Advisors as to certain funds to limit the amount of such assets for determining eligible assets in certain circumstances. As of August 31, 2023, the complex-level fee rate for the Fund was 0.1600%. |
The following table sets forth the management fee paid by the Fund for the last three fiscal years:
|
|
|
|
|
|
|
|
|
| |
|
Management Fee Net of Expense
Reimbursement
|
|
|
Expense
Reimbursement
|
|
| Fiscal year ended October 31, 2020 |
|
$ |
612,036 |
|
|
$ |
— |
|
| Fiscal year ended October 31, 2021 |
|
$ |
657,423 |
|
|
$ |
— |
|
| Fiscal year ended October 31, 2022 |
|
$ |
633,371 |
|
|
$ |
— |
|
In addition to the fee of Nuveen Fund Advisors, the Fund pays all other costs and expenses of its operations,
including compensation of its Directors (other than those affiliated with Nuveen Fund Advisors and Nuveen Asset Management), custodian, transfer agency and dividend disbursing expenses, legal fees, expenses of independent auditors, expenses of
repurchasing shares, expenses of preparing, printing and distributing shareholder reports, notices, proxy statements and reports to governmental agencies and taxes, if any. All fees and expenses are accrued daily and deducted before payment of
dividends to investors.
A discussion regarding the basis for the Board’s most recent approval of the Investment Management Agreement
for the Fund may be found in the Fund’s annual report to shareholders dated October 31 of each year.
49
Investment Sub-Adviser. Pursuant to a sub-advisory agreement between Nuveen Fund Advisors and Nuveen Asset Management (the “Sub-Advisory Agreement”), Nuveen Asset Management, LLC, 333 West Wacker
Drive, Chicago, Illinois 60606, serves as the Fund’s sub-adviser. Nuveen Asset Management, a registered investment adviser, is a wholly-owned subsidiary of Nuveen Fund Advisors. Nuveen Asset Management
oversees day-to-day operations and provides portfolio management services to the Fund. Pursuant to the Sub-Advisory Agreement,
Nuveen Asset Management is compensated for the services it provides to the Fund with a portion of the management fee Nuveen Fund Advisors receives from the Fund. Nuveen Fund Advisors and Nuveen Asset Management retain the right to reallocate
investment advisory responsibilities and fees between themselves in the future.
Sub-Advisory
Agreement and Related Fees. Pursuant to the Sub-Advisory Agreement, Nuveen Asset Management receives from Nuveen Fund Advisors a management fee equal to 71.4286% of Nuveen Fund Advisors’ net
management fee from the Fund. Nuveen Fund Advisors and Nuveen Asset Management retain the right to reallocate investment advisory responsibilities and fees between themselves in the future.
The following table sets forth the management fee paid by Nuveen Fund Advisors to Nuveen Asset Management for the last three fiscal years:
|
|
|
|
|
| |
|
Sub-Advisory Fee Paid by
Nuveen Fund Advisors
to Nuveen
Asset
Management |
|
| Fiscal year ended October 31, 2020 |
|
$ |
437,169 |
|
| Fiscal year ended October 31, 2021 |
|
$ |
469,588 |
|
| Fiscal year ended October 31, 2022 |
|
$ |
452,408 |
|
A discussion regarding the basis for the Board’s most recent approval of the Sub-Advisory Agreement for the Fund may be found in the Fund’s annual report to shareholders dated October 31 of each year.
Portfolio Manager. Unless otherwise indicated, the information below is provided as of the date of this SAI.
Portfolio Management. Christopher L. Drahn, CFA (“Portfolio Manager”) manages
tax-exempt fixed income portfolios as well as mutual funds and closed-end funds. He began working in the investment industry when he joined the firm in 1980. Chris
became a portfolio manager in 1988. He received a B.A. from Wartburg College and an M.B.A. in finance from the University of Minnesota. Chris holds the Chartered Financial Analyst designation and is a member of the CFA Institute, the Minnesota
Society of Municipal Analysts and the CFA Society of Minnesota.
Other Accounts Managed. The Portfolio Manager also has
responsibility for the day-to-day management of accounts other than the Fund. Information regarding these other accounts is set forth below.
|
|
|
|
|
|
|
|
|
| Portfolio Manager |
|
Type of
Account Managed |
|
Number
of
Accounts |
|
|
Assets* |
| Christopher L. Drahn |
|
Registered Investment Companies |
|
|
12 |
|
|
$21.65 billion |
|
|
|
|
|
|
Other Pooled Investment Vehicles |
|
|
0 |
|
|
$0 |
|
|
|
|
|
|
Other Accounts |
|
|
7 |
|
|
$805 million |
| * |
Assets as of October 31, 2022. None of the assets in these accounts are subject to an advisory fee based
on performance. |
As shown in the above table, the Portfolio Manager may manage accounts in addition to the Fund. The
potential for conflicts of interest exists when a portfolio manager manages other accounts with similar investment
50
objectives and strategies to the Fund (“Similar Accounts”). Potential conflicts may include, for example, conflicts between investment strategies and conflicts in the allocation of
investment opportunities.
Responsibility for managing Nuveen Fund Advisors’ clients’ portfolios is organized according to
investment strategies. Generally, client portfolios with similar strategies are managed using the same objectives, approach and philosophy. Therefore, portfolio holdings, relative position sizes and sector exposures tend to be similar across similar
portfolios which minimizes the potential for conflicts of interest.
Nuveen Fund Advisors may receive more compensation with respect to
certain Similar Accounts than that received with respect to the Fund or may receive compensation based in part on the performance of certain Similar Accounts. This may create a potential conflict of interest for the Portfolio Manager by providing an
incentive to favor these Similar Accounts when, for example, placing securities transactions. Potential conflicts of interest may arise with both the aggregation and allocation of securities transactions and allocation of limited investment
opportunities. Allocations of aggregated trades, particularly trade orders that were only partially completed due to limited availability, and allocation of investment opportunities generally, could raise a potential conflict of interest.
Nuveen Asset Management has policies and procedures designed to manage these conflicts described above such as allocation of investment
opportunities to achieve fair and equitable allocation of investment opportunities among its clients over time. For example, orders for the same equity security are aggregated on a continual basis throughout each trading day consistent with Nuveen
Asset Management’s duty of best execution for its clients. If aggregated trades are fully executed, accounts participating in the trade will be allocated their pro rata share on an average price basis. Partially completed orders will be
allocated among the participating accounts on a pro-rata average price basis as well.
Compensation. Portfolio managers are compensated through a combination of base salary and variable components consisting of (i) a
cash bonus; (ii) a long-term performance award; and (iii) participation in a profits interest plan.
Base salary.
A portfolio manager’s base salary is determined based upon an analysis of the portfolio manager’s general performance, experience and market levels of base pay for such position.
Cash bonus. A portfolio manager is eligible to receive an annual cash bonus that is based on three variables: risk-adjusted investment
performance relative to benchmark generally measured over the most recent one, three and five year periods (unless the portfolio manager’s tenure is shorter), ranking versus Morningstar peer funds generally measured over the most recent one,
three and five year periods (unless the portfolio manager’s tenure is shorter), and management and peer reviews.
Long-term
performance award. A portfolio manager is eligible to receive a long-term performance award that vests after three years. The amount of the award when granted is based on the same factors used in determining the cash bonus. The value of the
award at the completion of the three-year vesting period is adjusted based on the risk-adjusted investment performance of Fund(s) managed by the portfolio manager during the vesting period and the performance of the TIAA organization as a whole.
Profits interest plan. Portfolio managers are eligible to receive profits interests in Nuveen Asset Management and its
affiliate, Teachers Advisors, LLC, which vest over time and entitle their holders to a percentage of the firms’ annual profits. Profits interests are allocated to each portfolio manager based on such person’s overall contribution to the
firms.
There are generally no differences between the methods used to determine compensation with respect to the Fund and the Other
Accounts shown in the table above.
51
Material conflicts of interest. Actual or apparent conflicts of interest may arise when a
portfolio manager has day-to-day management responsibilities with respect to more than one account. More specifically, portfolio managers who manage multiple accounts
are presented a number of potential conflicts, including, among others, those discussed below.
The management of multiple accounts may
result in a portfolio manager devoting unequal time and attention to the management of each account. Nuveen Asset Management seeks to manage such competing interests for the time and attention of portfolio managers by having portfolio managers focus
on a particular investment discipline. Most accounts managed by a portfolio manager in a particular investment strategy are managed using the same investment models.
If a portfolio manager identifies a limited investment opportunity which may be suitable for more than one account, an account may not be able
to take full advantage of that opportunity due to an allocation of filled purchase or sale orders across all eligible accounts. To deal with these situations, Nuveen Asset Management has adopted procedures for allocating limited opportunities across
multiple accounts.
With respect to many of its clients’ accounts, Nuveen Asset Management determines which broker to use to execute
transaction orders, consistent with its duty to seek best execution of the transaction. However, with respect to certain other accounts, Nuveen Asset Management may be limited by the client with respect to the selection of brokers or may be
instructed to direct trades through a particular broker. In these cases, Nuveen Asset Management may place separate, non-simultaneous, transactions for the Fund and other accounts which may temporarily affect
the market price of the security or the execution of the transaction, or both, to the detriment of the Fund or the other accounts.
Some
clients are subject to different regulations. As a consequence of this difference in regulatory requirements, some clients may not be permitted to engage in all the investment techniques or transactions or to engage in these transactions to the same
extent as the other accounts managed by the portfolio manager. Finally, the appearance of a conflict of interest may arise where Nuveen Asset Management has an incentive, such as a performance-based management fee, which relates to the management of
some accounts, with respect to which a portfolio manager has day-to-day management responsibilities.
Conflicts of interest may also arise when the sub-adviser invests one or more of its client accounts
in different or multiple parts of the same issuer’s capital structure, including investments in public versus private securities, debt versus equity, or senior versus junior/subordinated debt, or otherwise where there are different or
inconsistent rights or benefits. Decisions or actions such as investing, trading, proxy voting, exercising, waiving or amending rights or covenants, workout activity, or serving on a board, committee or other involvement in governance may result in
conflicts of interest between clients holding different securities or investments. Generally, individual portfolio managers will seek to act in a manner that they believe serves the best interest of the accounts they manage. In cases where a
portfolio manager or team faces a conflict among its client accounts, it will seek to act in a manner that it believes best reflects its overall fiduciary duty, which may result in relative advantages or disadvantages for particular accounts.
Nuveen Asset Management has adopted certain compliance procedures which are designed to address these types of conflicts common among
investment managers. However, there is no guarantee that such procedures will detect each and every situation in which a conflict arises.
Nuveen Asset Management or its affiliates, including TIAA, sponsor an array of financial products for retirement and other investment goals,
and provide services worldwide to a diverse customer base. Accordingly, from time to time, the Fund may be restricted from purchasing or selling securities, or from engaging in other investment activities because of regulatory, legal or contractual
restrictions that arise due to another client account’s investments and/or the internal policies of Nuveen Asset Management, TIAA or its affiliates designed to comply with such restrictions. As a result, there may be periods, for example, when
Nuveen Asset
52
Management will not initiate or recommend certain types of transactions in certain securities or instruments with respect to which investment limits have been reached.
The investment activities of Nuveen Asset Management or its affiliates may also limit the investment strategies and rights of the Fund. For
example, in certain circumstances where the Fund invests in securities issued by companies that operate in certain regulated industries, in certain emerging or international markets, or are subject to corporate or regulatory ownership definitions,
or invest in certain futures and derivative transactions, there may be limits on the aggregate amount invested by Nuveen Asset Management or its affiliates for the Fund and other client accounts that may not be exceeded without the grant of a
license or other regulatory or corporate consent. If certain aggregate ownership thresholds are reached or certain transactions undertaken, the ability of Nuveen Asset Management, on behalf of the Fund or other client accounts, to purchase or
dispose of investments or exercise rights or undertake business transactions may be restricted by regulation or otherwise impaired. As a result, Nuveen Asset Management, on behalf of the Fund or other client accounts, may limit purchases, sell
existing investments, or otherwise restrict or limit the exercise of rights (including voting rights) when Nuveen Asset Management, in its sole discretion, deems it appropriate in light of potential regulatory or other restrictions on ownership or
other consequences resulting from reaching investment thresholds.
Fund shares owned by the Portfolio Manager. As of
October 31, 2022, the Portfolio Manager beneficially owned (as determined pursuant to Rule 16a-1(a)(2) under the 1934 Act) shares of the Fund having values within the indicated dollar range.
|
|
|
|
|
| Portfolio Manager |
|
Dollar Range of Equity Securities
Beneficially Owned in the Fund |
|
| Christopher L. Drahn |
|
|
None |
|
CODE OF ETHICS
The Fund, Nuveen Fund Advisors, Nuveen Asset Management, Nuveen Securities and other related entities have adopted a combined code of ethics
(the “Code of Ethics”) that essentially prohibits certain of their personnel, including the Portfolio Manager, from engaging in personal investments that compete or interfere with, or attempt to take advantage of a client’s, including
the Fund’s, anticipated or actual portfolio transactions, and are designed to assure that the interests of clients, including Fund shareholders, are placed before the interests of personnel in connection with personal investment transactions.
Personnel subject to the Code of Ethics may purchase shares of the Fund subject to the restriction set forth in the Code of Ethics. While personnel subject to the Code of Ethics may generally invest in securities in which the Fund may also invest,
portfolio managers of municipal bond funds, such as the Fund, may not do so. Text-only versions of the Code of Ethics can be viewed online or downloaded from the EDGAR Database on the SEC’s internet website at www.sec.gov. In addition, a copy
of the Code of Ethics may be obtained, after paying the appropriate duplicating fee, by e-mail request at publicinfo@sec.gov.
PROXY VOTING POLICIES
The Fund invests its assets generally in municipal securities. On rare occasions the Fund may acquire, directly or through a special purpose
vehicle, equity securities of certain issuers whose securities the Fund already owns when such securities have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity securities generally
will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuer’s credit problem. In the course of exercising control of a
distressed municipal issuer, Nuveen Asset Management may pursue the Fund’s interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the management of the
issuer. Nuveen Asset Management does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended, but nevertheless provides reports to the
Fund’s Board on its control activities on a quarterly basis.
53
Your Fund has delegated authority to the Adviser to vote proxies for securities held by the Fund,
and the Adviser has in turn delegated that responsibility to the Sub-Adviser. The Adviser’s proxy voting policy establishes minimum standards for the exercise of proxy voting authority by the Sub-Adviser.
In the rare event that a municipal issuer held by the Fund were to issue a proxy, or that
the Fund were to receive a proxy issued by a cash management security, the Sub-Adviser will vote proxies in accordance with the Nuveen Proxy Voting Guidelines, which are attached, along with the Nuveen Proxy
Voting Policy and Nuveen Proxy Voting Conflicts of Interest Policy and Procedures, as Appendix C to this SAI.
Voted Proxies.
Information regarding how your Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available without charge by accessing the Fund’s Proxy
Voting Report on Form N-PX, which is available through both Nuveen’s website at
http://www.nuveen.com/en-us/closed-end-funds or the SEC’s website at http://www.sec.gov.
PORTFOLIO TRANSACTIONS AND BROKERAGE
Subject to the supervision of the Board, Nuveen Asset Management is responsible for decisions to purchase and sell securities for the Fund,
the negotiation of the prices to be paid and the allocation of transactions among various dealer firms. Transactions on stock exchanges involve the payment by the Fund of brokerage commissions. There generally is no stated commission in the case of
securities traded in the over-the-counter (“OTC”) market but the price paid by the Fund usually includes an undisclosed dealer commission or mark-up. Transactions in the OTC market can also be placed with broker-dealers who act as agents and charge brokerage commissions for effecting OTC transactions. The Fund may place its OTC transactions either
directly with principal market makers, or with broker-dealers if that is consistent with Nuveen Asset Management’s obligation to obtain best qualitative execution. In certain instances, the Fund may make purchases of underwritten issues at
prices that include underwriting fees.
Portfolio securities may be purchased directly from an underwriter or in the OTC market from the
principal dealers in such securities, unless it appears that a better price or execution may be obtained through other means. Portfolio securities will not be purchased from Nuveen Investments or its affiliates or affiliates of Nuveen Fund Advisors
except in compliance with the 1940 Act.
It is Nuveen Asset Management’s policy to seek the best execution under the circumstances of
each trade. Nuveen Asset Management will evaluate price as the primary consideration, with the financial condition, reputation and responsiveness of the dealer considered secondary in determining best execution. Given the best execution obtainable,
it will be Nuveen Asset Management’s practice to select dealers that, in addition, furnish research information (primarily credit analyses of issuers and general economic reports) and statistical and other services to Nuveen Asset Management.
It is not possible to place a dollar value on information and statistical and other services received from dealers. Since it is only supplementary to Nuveen Asset Management’s own research efforts, the receipt of research information is not
expected to reduce significantly Nuveen Asset Management’s expenses. While Nuveen Asset Management will be primarily responsible for the placement of the business of the Fund, Nuveen Asset Management’s policies and practices in this regard
must be consistent with the foregoing and will, at all times, be subject to review by the Board of the Fund.
Nuveen Asset Management may
manage other investment accounts and investment companies for other clients that may invest in the same types of securities as the Fund and that may have investment objectives similar to those of the Fund. Nuveen Asset Management seeks to allocate
portfolio transactions equitably whenever concurrent decisions are made to purchase or sell assets or securities by the Fund and another advisory account. If an aggregated order cannot be filled completely, allocations will generally be made on a
pro rata basis. An order may not be allocated on a pro rata basis where, for example (i) consideration is given to portfolio managers who have been instrumental in developing or negotiating a particular investment; (ii) consideration is
given to an account with specialized investment policies that coincide with the particulars of a specific
54
investment; (iii) pro rata allocation would result in odd-lot or de minimis amounts being allocated to a portfolio or other client; or (iv) where
Nuveen Asset Management reasonably determines that departure from a pro rata allocation is advisable. There may also be instances where the Fund will not participate at all in a transaction that is allocated among other accounts. While these
allocation procedures could have a detrimental effect on the price or amount of the securities available to the Fund from time to time, it is the opinion of the Board that the benefits available from Nuveen Asset Management’s management
outweigh any disadvantage that may arise from Nuveen Asset Management’s larger management activities and its need to allocate securities.
Substantially all of the Fund’s trades are effected on a principal basis. The following table sets forth the aggregate amount of
brokerage commissions paid by the Fund for the last three fiscal years:
|
|
|
|
|
| |
|
Brokerage Commissions Paid |
|
| Fiscal year ended October 31, 2020 |
|
$ |
— |
|
| Fiscal year ended October 31, 2021 |
|
$ |
— |
|
| Fiscal year ended October 31, 2022 |
|
$ |
— |
|
During the fiscal year ended October 31, 2022, the Fund did not pay commissions to brokers in return for
research services or hold any securities of its regular broker-dealers.
NET ASSET VALUE
The Fund’s NAV per share of Common Stock is determined as of the close of regular session trading (normally 4:00 p.m., Eastern time)
on each day the NYSE is open for business. NAV is calculated by taking the market value of the Fund’s total assets, including interest or dividends accrued but not yet collected, less all liabilities, and dividing by the total number of
shares of Common Stock outstanding. The result, rounded to the nearest cent, is the NAV per share. All valuations are subject to review by the Fund’s Board.
The Fund utilizes independent pricing services approved by the Board to value portfolio instruments at their market value. Independent pricing
services typically value non-equity portfolio instruments utilizing a range of market-based inputs and assumptions, including readily available market quotations obtained from broker-dealers making markets in
such instruments, cash flows and transactions for comparable instruments. In valuing municipal securities, the pricing services may also consider, among other factors, the yields or prices of municipal securities of comparable quality, type of
issue, coupon, maturity and rating and the obligor’s credit characteristics considered relevant by the pricing service or Nuveen Fund Advisors. In pricing certain securities, particularly less liquid and lower quality securities, the pricing
services may consider information about a security, its issuer or market activity provided by Nuveen Fund Advisors or Nuveen Asset Management.
If a price cannot be obtained from a pricing service or other pre-approved source, or if the
Fund’s valuation designee, deems such price to be unreliable, or if a significant event occurs after the close of the local market but prior to the time at which the Fund’s NAV is calculated, a portfolio instrument will be valued at its
fair value as determined in good faith by the Fund’s valuation designee. The Fund’s valuation designee may determine that a price is unreliable in various circumstances. For example, a price may be deemed unreliable if it has not changed
for an identified period of time, or has changed from the previous day’s price by more than a threshold amount, and recent transactions and/or broker dealer price quotations differ materially from the price in question.
TAX MATTERS
The following is intended to be a general summary of certain US federal income tax consequences of investing, holding and disposing of Common
Stock of the Fund. It is not intended to be a complete discussion of all such federal income tax consequences, nor does it purport to deal with all categories of investors (including investors in Common Stock with large positions in the Fund).
Investors are advised to consult with their own tax advisors before investing in the Fund.
55
The Fund has elected, and intends to qualify each year, as a RIC under Subchapter M of the
Internal Revenue Code of 1986, as amended (the “Code”) and to satisfy conditions under which dividends on Common Stock attributable to interest on municipal securities (as defined above) are exempt from federal income tax in the hands of
owners of such stock, subject to the possible application of the federal alternative minimum tax.
To qualify under Subchapter M of the
Code for treatment as a RIC, the Fund must, among other things: (a) distribute to its shareholders each year at least 90% of the sum of (i) its investment company taxable income (as that term is defined in the Code, determined without
regard to the deduction for dividends paid) and (ii) its net tax-exempt income (the excess of its gross tax-exempt interest income over certain disallowed
deductions), (b) derive at least 90% of its gross income (including income on municipal securities exempt from regular federal income tax) for each taxable year from dividends, interest (including interest income on municipal securities exempt
from regular federal income tax), payments with respect to certain securities loans, gains from the sale or other disposition of stock, securities or foreign currencies, or 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 net income derived from an interest in a qualified publicly traded partnership (as defined in the Code), and (c) diversify its holdings so that, at
the end of each quarter of the Fund’s taxable year (i) at least 50% of the market value of the Fund’s assets is represented by cash, cash items, U.S. government securities, securities of other RICs, and other securities, with these
other securities limited, with respect to any one issuer, to an amount not greater in value than 5% 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
market value of the Fund’s assets is invested, including through corporations in which the Fund owns a 20% or more voting stock interest, in the securities of any one issuer (other than U.S. government securities or securities of other RICs),
the securities of two or more issuers (other than securities of other RICs) controlled by the Fund and engaged in the same, similar or related trades or businesses, or the securities of one or more qualified publicly traded partnerships. To meet
these requirements, the Fund may need to restrict its use of certain of the investment techniques described under “Investment Objective and Policies” above.
If the Fund fails to satisfy the qualifying income or diversification requirements in any taxable year, the Fund may be eligible for relief
provisions if the failures are due to reasonable cause and not willful neglect and if a penalty tax is paid with respect to each failure to satisfy the applicable requirements. Additionally, relief is provided for certain de minimis failures of the
diversification requirements where the Fund corrects the failure within a specified period of time. In order to be eligible for the relief provisions with respect to a failure to meet the diversification requirements, the Fund may be required to
dispose of certain assets. If these relief provisions are not available to the Fund and it fails to qualify for treatment as a RIC for a taxable year, the Fund will be subject to tax at the 21% regular corporate tax rate. In such an event, all
distributions (including capital gains distributions and distributions derived from interest on municipal securities) will be taxable as ordinary dividends to the extent of the Fund’s current and accumulated earnings and profits, subject to
certain limitations the dividends-received deduction for corporate shareholders and to the lower tax rates applicable to qualified dividend income distributed to non-corporate shareholders. Distributions in
excess of the Fund’s current and accumulated earnings and profits would be treated first as a tax-free return of capital to the extent of the holder’s adjusted tax basis in the shares (reducing that
basis accordingly), and any remaining distributions would generally be treated as a capital gain. To requalify for treatment as a RIC in a subsequent taxable year, the Fund would be required to satisfy the RIC qualification requirements for that
year and to distribute any earnings and profits from any year in which the Fund failed to qualify for tax treatment as a RIC. If the Fund failed to qualify as a RIC for a period greater than two taxable years, it would generally be required to pay a
Fund-level tax on certain net built-in gains recognized with respect to certain of its assets upon a disposition of such assets within five years of qualifying as a RIC in a subsequent year.
A RIC that fails to distribute, by the close of each calendar year, an amount at least equal to the sum of 98% of its ordinary taxable income
for such year and 98.2% of its capital gain net income for the one-year period ending October 31 in such year, plus any shortfalls from the prior year’s required distribution, is liable for a
nondeductible 4% federal excise tax on the excess of the required distribution for such calendar year over the
56
distributed amount for such calendar year. To avoid the imposition of this excise tax, the Fund generally intends, but makes no assurances, to make the required distributions of its ordinary
taxable income, if any, and its capital gain net income.
If preferred shares are issued, certain minimum net asset value coverage
limitations on distributions made with respect to Common Stock may under certain circumstances impair the ability of the Fund to maintain its qualification for treatment as a RIC or to pay distributions sufficient to avoid the imposition of the 4%
federal excise tax.
As described in “Distributions” above, the Fund may retain for investment or otherwise use some (or all) of
its net capital gain. If the Fund retains any net capital gain or investment company taxable income, it will be subject to tax at the regular corporate rates on the amount retained. If the Fund retains any net capital gain, it may designate the
retained amount as undistributed capital gains in a notice to its shareholders who, if subject to federal income tax on long-term capital gains, (i) will be required to include in income for federal income tax purposes, as long-term capital
gain, their share of such undistributed amount; (ii) will be deemed to have paid their proportionate share of the tax paid by the Fund on such undistributed amount and will be entitled to credit that amount of tax against their federal income
tax liabilities, if any; and (iii) will be entitled to claim refunds to the extent the credit exceeds such liabilities. For federal income tax purposes, the tax basis of shares owned by a shareholder of the Fund will be increased by an amount
equal to the difference between the amount of undistributed capital gains included in the shareholder’s gross income and the tax deemed paid by the shareholder.
The Fund intends to qualify to pay “exempt-interest” dividends, as defined in the Code, to its Common Stock by satisfying the
requirement that, at the close of each quarter of its taxable year, at least 50% of the value of its total assets consists of municipal securities. Exempt-interest dividends are dividends or any part thereof (other than a capital gain dividend) paid
by the Fund which are attributable to interest on municipal securities and which are so reported by the Fund. Exempt-interest dividends will be exempt from federal income tax, subject to the possible application of the federal alternative minimum
tax applicable to non-corporate taxpayers. Interest paid on a municipal bond issued after December 31, 2017 to advance refund another municipal bond is subject to federal income tax. Insurance proceeds
received by the Fund under any insurance policies in respect of scheduled interest payments on defaulted municipal bonds, as described herein, will generally be correspondingly excludable from federal gross income. In the case of non-appropriation by a political subdivision, however, there can be no assurance that payments made by the issuer representing interest on municipal lease obligations will be excludable from gross income for federal
income tax purposes. Any gains of the Fund that are attributable to market discount on municipal securities are treated as ordinary income to the extent of accrued market discount on those securities.
A 3.8% tax generally applies to all or a portion of the net investment income of a shareholder who is an individual and not a nonresident
alien for federal income tax purposes and who has adjusted gross income (subject to certain adjustments) that exceeds a threshold amount ($250,000 if married filing jointly or if considered a “surviving spouse” for federal income tax
purposes, $125,000 if married filing separately, and $200,000 in other cases). This 3.8% tax also applies to all or a portion of the undistributed net investment income of certain shareholders that are estates and trusts. For these purposes,
interest, dividends and certain capital gains are generally taken into account in computing a shareholder’s net investment income, but exempt-interest dividends are not taken into account.
A portion of the Fund’s expenditures that would otherwise be deductible may not be allowed as deductions by reason of the Fund’s
investment in municipal securities (such disallowed portion, in general, being the same percentage of the Fund’s aggregate expenses as the percentage of the Fund’s aggregate gross income that constitutes exempt interest income from
municipal securities). A similar disallowance rule also applies to interest expense paid or incurred by the Fund, if any. Any such disallowed deductions will offset the Fund’s gross exempt-interest income for purposes of calculating the
dividends that the Fund can report as exempt-
57
interest dividends. Interest on indebtedness incurred or continued to purchase or carry the Fund’s shares is not deductible to the extent the interest relates to exempt-interest dividends.
Under rules used by the Internal Revenue Service (“IRS”) for determining when borrowed funds are considered used for the purpose of purchasing or carrying particular assets, the purchase or ownership of shares may be considered to have
been made with borrowed funds even though such funds are not directly used for the purchase or ownership of such shares.
Distributions to
shareholders of net investment income received by the Fund from taxable investments, if any, including temporary taxable investments, and of net short-term capital gains realized by the Fund, if any, will be taxable to its shareholders as ordinary
income. Distributions by the Fund of net capital gain (i.e., the excess of net long-term capital gain over net short-term capital loss), if any, are taxable as long-term capital gain, regardless of the length of time the shareholder has owned
the shares with respect to which such distributions are made. The amount of taxable income allocable to the Fund’s shares will depend upon the amount of such income realized by the Fund. Distributions, if any, in excess of the Fund’s
earnings and profits will first reduce the adjusted tax basis of a shareholder’s shares and, after that basis has been reduced to zero, will constitute capital gain to the shareholder (assuming the shares are held as a capital asset). As long
as the Fund qualifies as a RIC under the Code, it is not expected that any part of its distributions to shareholders from its investments will qualify for the dividends-received deduction available to corporate shareholders or as “qualified
dividend income” taxable to non-corporate shareholders at reduced rates.
The interest on
private activity bonds in most instances is not federally tax-exempt to a person who is a “substantial user” of a facility financed by such bonds or a “related person” of such
“substantial user.” As a result, the Fund may not be an appropriate investment for a shareholder who is considered either a “substantial user” or a “related person” within the meaning of the Code. In general, a
“substantial user” of a facility includes a “nonexempt person who regularly uses a part of such facility in his trade or business.” “Related persons” are in general defined to include persons among whom there exists a
relationship, either by family or business, which would result in a disallowance of losses in transactions among them under various provisions of the Code (or if they are members of the same controlled group of corporations under the Code),
including a partnership and each of its partners (and certain members of their families), an S corporation and each of its shareholders (and certain members of their families) and various combinations of these and other relationships. The foregoing
is not a complete description of all of the provisions of the Code covering the definitions of “substantial user” and “related person.”
Although dividends generally will be treated as distributed when paid, dividends declared in October, November or December, payable to
shareholders of record on a specified date in one of those months and paid during the following January, will be treated as having been distributed by the Fund (and received by the shareholders) on December 31 of the year declared. The U.S.
federal income tax status of all distributions will be reported to shareholders annually.
Federal income tax law imposes an alternative
minimum tax with respect to individuals, trusts and estates. Interest on certain municipal securities, such as bonds issued to make loans for housing purposes or to private entities (but not to certain
tax-exempt organizations such as universities and non-profit hospitals), is included as an item of tax preference in determining the amount of a taxpayer’s
alternative minimum taxable income. The Fund does not intend to invest in municipal securities the interest on which is a tax preference item. Bonds issued in 2009 or 2010 generally will not be treated as private activity bonds, and interest earned
on such bonds (and Fund distributions consisting of such interest) generally will not be treated as a tax preference item and generally will not result in or increase a corporate shareholder’s liability for the federal alternative minimum tax.
Tax-exempt income, including exempt-interest dividends paid by the Fund, is taken into account in
calculating the amount of social security and railroad retirement benefits that may be subject to federal income tax.
58
If the Fund invests in certain
pay-in-kind securities, zero coupon 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 generally 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 to its shareholders, at least annually, all or substantially all of its investment company taxable income (determined without regard to the deduction for dividends paid), including such accrued income, to qualify to be treated as a
RIC under the Code and avoid U.S. federal income and excise taxes.
Certain of the Fund’s investment practices are subject to special
provisions of the Code that, among other things, may affect the Fund’s ability to qualify as a RIC, defer the use of certain deductions or losses of the Fund, affect the holding period of securities held by the Fund, and alter the character of
the gains or losses realized by the Fund. These provisions may also require the Fund to recognize income or gain without receiving cash with which to make distributions in the amounts necessary to satisfy the requirements for maintaining RIC status
and for avoiding income and excise taxes. The Fund will monitor its transactions and may make certain tax elections in order to mitigate the effect of these rules and prevent disqualification of the Fund for treatment as a RIC.
Capital losses in excess of capital gains (“net capital losses”) are not permitted to be deducted against a RIC’s net
investment income. Instead, for U.S. federal income tax purposes, potentially subject to certain limitations, the Fund may carry net capital losses from any taxable year forward to offset capital gains in future years. If the Fund has a net capital
loss, the excess of the Fund’s net short-term capital losses over its net long-term capital gains is treated as a short-term capital loss arising on the first day of the Fund’s next taxable year, and the excess (if any) of the Fund’s
net long-term capital losses over its net short-term capital gains is treated as a long-term capital loss arising on the first day of the Fund’s next taxable year. The carryover of capital losses may be limited under the general loss limitation
rules if the Fund experiences an ownership change as defined in the Code. Generally, the Fund may not carry forward any losses other than net capital losses. Under certain circumstances, the Fund may elect to treat certain losses as though they were
incurred on the first day of the taxable year immediately following the taxable year in which they were actually incurred. As of October 31, 2022, the Fund’s tax year end, the Fund had unused capital loss carryforwards available for
federal income tax purposes to be applied against future capital gains, if any, as follows:
|
|
|
|
|
| Not subject to expiration: |
|
|
|
| Short-Term |
|
$ |
3,016,967 |
|
| Long-Term |
|
$ |
2,058,506 |
|
| Total |
|
$ |
5,075,473 |
|
The repurchase, sale or exchange of Common Stock normally will result in capital gain or loss to holders of
Common Stock who hold their shares as capital assets. Generally, a shareholder’s gain or loss will be long-term capital gain or loss if the shares have been held for more than one year even though the increase in value in such Common Stock may
be at least partly attributable to tax-exempt interest income. For non-corporate taxpayers, long-term capital gains are taxed at rates of up to 20%. Short-term capital
gains and other ordinary income are taxed to non-corporate taxpayers at ordinary income rates. If a shareholder sells or otherwise disposes of shares of Common Stock before holding them for six months, any
loss on the sale or disposition will be treated as a long-term capital loss to the extent of any amounts treated as distributions to the shareholder of long-term capital gain (including any amount credited to the shareholder as undistributed capital
gain) or disallowed to the extent of exempt-interest dividends are received by a shareholder. Any loss realized on a sale or exchange of (or upon entering into a contract or option to repurchase) shares of the Fund will be disallowed to the extent
those shares of the Fund are replaced (including, without limitation, under the Plan) by substantially identical shares of the Fund within a period of 61 days beginning 30 days before and ending 30 days after the date of disposition of the original
shares, or to the extent the shareholder enters into a contract or option to repurchase shares within such period. In that event, the basis of the replacement shares of the Fund will be adjusted to reflect the disallowed loss.
59
The Fund is required in certain circumstances to withhold (as “backup withholding”) a
portion of dividends (including exempt-interest dividends) and certain other payments paid to certain holders of the Fund’s shares who do not furnish to the Fund their correct taxpayer identification numbers (in the case of individuals, their
social security numbers) and certain certifications, or who are otherwise subject to backup withholding. The backup withholding rate is 24%. 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 federal income tax liability, provided the required information and forms are timely furnished to the IRS.
The Code provides that every shareholder required to file a tax return must include for information purposes on such return the amount of tax-exempt interest received during the taxable year, including any exempt-interest dividends received from the Fund.
The description of certain federal tax provisions above relates only to U.S. federal income tax consequences for shareholders who are U.S.
persons, i.e., generally, U.S. citizens or residents or U.S. corporations, partnerships, trusts or estates, and who are subject to U.S. federal income tax and hold their shares as capital assets. Except as otherwise provided, this description
does not address the special tax rules that may be applicable to particular types of investors, such as financial institutions, insurance companies, securities dealers, other RICs, or tax-exempt or tax-deferred plans, accounts or entities. Investors that are not U.S. persons may be subject to different U.S. federal income tax treatment, including a non-resident alien
U.S. withholding tax at the rate of 30% or any lower applicable treaty rate on amounts treated as ordinary dividends from the Fund (other than certain dividends reported by the Fund as (i) interest-related dividends, to the extent such
dividends are derived from the Fund’s “qualified net-interest income,” or (ii) short-term capital gain dividends, to the extent such dividends are derived from the Fund’s
“qualified short-term gain”) or, in certain circumstances, unless an effective IRS Form W-8BEN or W-8BEN-E or other
authorized withholding certificate is on file, to backup withholding on certain other payments from the Fund. “Qualified net interest income” is the Fund’s net income derived from U.S.-source interest and original issue discount,
subject to certain exceptions and limitations. “Qualified short-term gain” generally means the excess of the net short-term capital gain of the Fund for the taxable year over its net long-term capital loss, if any. Backup withholding will
not be applied to payments that have been subject to the 30% (or lower applicable treaty rate) withholding tax on shareholders who are neither citizens nor residents of the United States.
Unless certain non-U.S. entities that hold Fund shares comply with IRS requirements that will
generally require them to report information regarding U.S. persons investing in, or holding accounts with, such entities, a 30% withholding tax may apply to certain Fund distributions payable to such entities. A
non-U.S. shareholder may be exempt from the withholding described in this paragraph under an applicable intergovernmental agreement between the U.S. and a foreign government, provided that the shareholder and
the applicable foreign government comply with the terms of such agreement.
The foregoing is a general summary of certain provisions of
the Code and regulations thereunder presently in effect as they directly govern the federal income 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. Moreover, the foregoing does not address many of the factors that may be determinative of whether an investor will be liable for the alternative minimum tax. Shareholders are advised to consult their own tax advisors for more detailed
information concerning the federal, foreign, state and local tax consequences of purchasing, holding and disposing of Fund shares.
STATE AND LOCAL TAX MATTERS
The exemption from U.S. federal income tax for exempt-interest dividends generally does not result in
exemption for such dividends under the income or other tax laws of any state or local taxing authority. In some states, however, the portion of any exempt-interest dividends derived from interest received by the Fund on its holdings of that
state’s securities and those of its political subdivisions and instrumentalities is exempt from the
60
state’s income tax. The Fund will report annually to its shareholders the percentage of interest income earned by the Fund during the preceding year on
tax-exempt obligations indicating, on a state-by-state basis, the source of such income. Shareholders of the Fund are advised to
consult their own tax advisors about state and local tax matters.
FINANCIAL STATEMENTS
The audited financial statements, financial highlights and notes thereto and the independent registered public accounting firm’s report
thereon appearing in the Fund’s Annual Report for the fiscal year ended October 31, 2022 are incorporated
herein by reference in this SAI. The information with respect to the six months ended April
30, 2023 is unaudited and is included in the Fund’s 2023 Semi-Annual Report, which is incorporated herein by reference. In addition, any reports and
other documents subsequently filed with the SEC pursuant to Section 30(b)(2) of the 1940 Act and Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act prior to the termination of the offering will be incorporated by reference into this SAI and
deemed to be part of this SAI from the date of the filing of such reports and documents. The information incorporated by reference is considered to be part of this SAI, and later information that the Fund files with the SEC will automatically update
and supersede this information. The information contained in, or that can be accessed through, the Fund’s website is not part of this SAI.
Incorporated materials not delivered with the SAI may be obtained, without charge, by calling
(800) 257-8787, by writing to the Fund at 333 West Wacker Drive, Chicago, Illinois 60606, or from the Fund’s website (http://www.nuveen.com).
CUSTODIAN AND TRANSFER AGENT
The custodian of the assets of the Fund is State Street Bank and Trust Company, One Congress Street, Boston, Massachusetts 02114-2016 (the
“Custodian”). The Custodian performs custodial, fund accounting and portfolio accounting services. The Fund’s transfer, shareholder services and dividend paying agent is Computershare Inc. and Computershare Trust Company, N.A.,
located at 250 Royall Street, Canton, Massachusetts 02021.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP, an independent registered public accounting firm, provides auditing services to the Fund. The principal business address of
KPMG is 200 East Randolph Street, Chicago, Illinois, 60601.
LEGAL MATTERS
Certain legal matters in connection with shares of Common Stock will be passed upon for the Fund by Morgan, Lewis & Bockius LLP,
located at 1111 Pennsylvania Avenue, NW, Washington, DC 20004. Morgan, Lewis & Bockius LLP will rely as to certain matters under Minnesota law on the opinion of [ ].
ADDITIONAL INFORMATION
A Registration Statement on Form N-2, including amendments thereto, relating to the shares of the Fund
offered hereby, has been filed by the Fund with the SEC, Washington, DC. The Prospectus and this SAI 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 SAI 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. Copies of the Registration
Statement may be inspected without charge at the SEC’s principal office in Washington, DC, and copies of all or any part thereof may be obtained from the SEC upon the payment of certain fees prescribed by the SEC.
61
APPENDIX A
Ratings of Investments
S&P Global Ratings—A brief description of the applicable S&P Global Ratings, a Division of S&P Global Inc.
(“S&P”), rating symbols and their meanings (as published by S&P) follows:
A S&P issue credit rating is a current
opinion of the creditworthiness of an obligor with respect to a specific financial obligation, a specific class of financial obligations, or a specific financial program (including ratings on medium-term note programs and commercial paper programs).
It takes into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the obligation and takes into account the currency in which the obligation is denominated. The opinion evaluates the obligor’s
capacity and willingness to meet its financial commitments as they come due, and may assess terms, such as collateral security and subordination, which could affect ultimate payment in the event of default. The issue credit rating is not a
recommendation to purchase, sell, or hold a financial obligation, inasmuch as it does not comment as to market price or suitability for a particular investor.
Issue credit ratings are based on current information furnished by the obligors or obtained by S&P from other sources it considers
reliable. S&P does not perform an audit in connection with any credit rating and may, on occasion, rely on unaudited financial information. Credit ratings may be changed, suspended, or withdrawn as a result of changes in, or unavailability of,
such information, or based on other circumstances.
Issue credit ratings can be either long term or short term. Short-term ratings are
generally assigned to those obligations considered short-term in the relevant market. In the U.S., for example, that means obligations with an original maturity of no more than 365 days—including commercial paper. Short-term ratings are also
used to indicate the creditworthiness of an obligor with respect to put features on long-term obligations. The result is a dual rating, in which the short-term rating addresses the put feature, in addition to the usual long-term rating. Medium-term
notes are assigned long-term ratings.
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. |
Issue ratings are an
assessment of default risk, but may incorporate an assessment of relative seniority or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior obligations, to reflect the lower priority in bankruptcy, as
noted above. (Such differentiation may apply when an entity has both senior and subordinated obligations, secured and unsecured obligations, or operating company and holding company obligations.)
AAA
An obligation rated
‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.
A-1
AA
An obligation rated ‘AA’ differs from the highest-rated obligations only to a 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.
BB, B, CCC, CC, and C
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 ‘C’ rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages
allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the ‘C’ rating may be assigned to subordinated
debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument’s terms.
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 S&P 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.
A-2
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.
NR
This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not
rate a particular obligation as a matter of policy.
Short-Term Issue Credit Ratings
A-1
A short-term obligation rated ‘A-1’ is rated in the highest category by S&P. 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. Ratings of ‘B-1’, ‘B-2’, and
‘B-3’ may be assigned to indicate finer distinctions within the ‘B’ category. 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.
B-1.
A short-term obligation rated ‘B-1’ is regarded as having significant speculative
characteristics, but the obligor has a relatively stronger capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.
B-2.
A short-term obligation rated ‘B-2’ is regarded as having significant speculative
characteristics, and the obligor has an average speculative-grade capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.
B-3.
A short-term obligation rated ‘B-3’ is regarded as having significant speculative
characteristics, and the obligor has a relatively weaker capacity to meet its financial commitments over the short-term compared to other speculative-grade obligors.
A-3
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 S&P 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.
Dual Ratings
S&P assigns “dual” ratings to all debt issues that have a put option or demand feature as part of their structure. The first
rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term rating symbols are used for bonds to denote the long-term maturity and the short-term rating
symbols for the put option (for example, ‘AAA/A-1+’). With U.S. municipal short-term demand debt, note rating symbols are used with the short-term issue credit rating symbols (for example, ‘SP-1+/A-1+’).
Moody’s Investors Service,
Inc.—A brief description of the applicable Moody’s Investors Service, Inc. (“Moody’s”) rating symbols and their meanings (as published by Moody’s) follows:
Municipal Bonds
Aaa
Bonds that 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.
Aa
Bonds mat 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 mat make the long-term risks appear somewhat larger than in ‘Aaa’ securities.
A
Bonds that 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 that suggest a susceptibility to impairment sometime in the future.
Baa
Bonds that 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 that 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.
A-4
B
Bonds that 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 that 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 that are rated ‘Ca’ represent obligations that are speculative in a high degree. Such issues are often in default or have other
marked shortcomings.
C
Bonds that 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.
#(hatchmark): Represents issues that are secured by escrowed funds held in cash, held in
trust, invested and reinvested in direct, non-callable, non-prepayable United States government obligations or non-callable, non-prepayable obligations unconditionally guaranteed by the U.S. Government, Resolution Funding Corporation debt obligations.
Con. (...): Bonds for which the security depends upon the completion of some act or the fulfillment of some condition are rated conditionally.
These are bonds secured by (a) earnings of projects under construction, (b) earnings of projects unseasoned in operation experience, (c) rentals that begin when facilities are completed, or (d) payments to which some other
limiting condition attaches. The parenthetical rating denotes probable credit stature upon completion of construction or elimination of the basis of the condition.
(P): When applied to forward delivery bonds, indicates the rating is provisional pending delivery of the bonds. The rating may be revised
prior to delivery if changes occur in the legal documents or the underlying credit quality of the bonds.
Note: Moody’s applies
numerical modifiers 1,2 and 3 in each generic rating classification from Aa through Caa. The modifier 1 indicates mat the issue ranks in the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks in the lower end of its generic rating category.
Short-Term Loans
MIG 1/VMIG 1
This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated
broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group.
MIG 3/VMIG 3
This designation
denotes favorable quality. All security elements are accounted for but there is lacking the undeniable strength of the preceding grades. Liquidity and cash flow protection may be narrow and market access for refinancing is likely to be less well
established.
A-5
MIG 4/VMIG 4
This designation denotes adequate quality. Protection commonly regarded as required of an investment security is present and although not
distinctly or predominantly speculative, there is specific risk.
SG
This designation denotes speculative quality. Debt instruments in this category lack margins of protection.
Commercial Paper
Issuers (or supporting
institutions) rated Prime-1 have a superior ability for repayment of senior short-term debt obligations. Prime-1 repayment ability will normally be evidenced by the
following characteristics:
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Leading market positions in well-established industries. |
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High rates of return on funds employed. |
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Conservative capitalization structures with moderate reliance on debt and ample asset protection.
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Broad margins in earnings coverage of fixed financial charges and high internal cash generation.
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Well-established access to a range of financial markets and assured sources of alternate liquidity.
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Issuers (or supporting institutions) rated Prime-2 have a strong ability for
repayment of 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.
Issuers (or supporting institutions) rated Prime-3 have an acceptable ability for repayment of senior
short-term debt obligations. The effect of industry characteristics and market composition may be more pronounced. Variability in earnings and profitability may result in changes in the level of debt protection measurements and the requirement for
relatively high financial leverage. Adequate alternate liquidity is maintained.
Issuers rated Not Prime do not fall within any of the
Prime rating categories.
Fitch Ratings—A brief description of the applicable Fitch Ratings (“Fitch”) ratings symbols and
meanings (as published by Fitch) follows:
Long-Term Credit Ratings
Investment Grade
AAA
Highest credit quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally
strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
AA
Very high credit quality.
‘AA’ ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.
A
High credit quality.
‘A’ ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions
than is the case for higher ratings.
A-6
BBB
Good credit quality. ‘BBB’ ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment
of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.
Speculative Grade
BB
Speculative. ‘BB’ ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse
economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade.
B
Highly speculative.
‘B’ ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business
and economic environment.
CCC, CC, C
High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable
business or economic developments. A ‘CC rating indicates that default of some kind appears probable. ‘C’ ratings signal imminent default.
DDD, DD, and D Default
The
ratings of obligations in this category are based on their Prospects for achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be estimated with any
precision, the following serve as general guidelines. ‘DDD’ obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest ‘DD’ indicates
potential recoveries in the range of 50%-90%, and ‘D’ the lowest recovery potential, i.e., below 50%. Entities rated in this category have defaulted on some or all of their obligations.
Entities rated ‘DDD’ have the highest Prospect for resumption of performance or continued operation with or without a formal reorganization process. Entities rated ‘DD’ and ‘D’ are generally undergoing a formal
reorganization or liquidation process; those rated ‘DD’ are likely to satisfy a higher portion of their outstanding obligations, while entities rated ‘D’ have a poor Prospect for repaying all obligations.
Short-Term Credit Ratings
The following
ratings scale applies to foreign currency and local currency ratings. A Short-term rating has a time horizon of less than 13 months for most obligations, or up to three years for US public finance, in line with industry standards, to reflect unique
risk characteristics of bond, tax, and revenue anticipation notes that are commonly issued with terms up to three years. Short-term ratings thus place greater emphasis on the liquidity necessary to meet financial commitments in a timely manner.
Fl
Highest credit quality.
Indicates the strongest capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature.
F2
Good credit quality. A
satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of the higher ratings.
A-7
F3
Fair credit quality. The capacity for timely payment of financial commitments is adequate; however, near-term adverse changes could result in a
reduction to non-investment grade.
B
Speculative Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and
economic conditions.
C
High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable
business and economic environment.
D
Default. Denotes actual or imminent payment default.
Notes to Long-term and Short-term ratings:
“+” or “-” may be appended to a rating to denote relative status within major rating categories. Such suffixes are not
added to the ‘AAA’ Long-term rating category, to categories below ‘CCC, or to Short-term ratings other than ‘FT.
‘NR’ indicates that Fitch Ratings does not rate the issuer or issue in question.
‘Withdrawn’: A rating is withdrawn when Fitch Ratings deems the amount of information available to be inadequate for rating
purposes, or when an obligation matures, is called, or refinanced.
Rating Watch: Ratings are placed on Rating Watch to notify investors
that there is a reasonable probability of a rating change and the likely direction of such change. These are designated as “Positive”, indicating a potential upgrade, “Negative”, for a potential downgrade, or
“Evolving”, if ratings may be raised, lowered or maintained. Rating Watch is typically resolved over a relatively short period.
A Rating Outlook indicates the direction a rating is likely to move over a one to two year period. Outlooks may be positive, stable, or
negative. A positive or negative Rating Outlook does not imply a rating change is inevitable. Similarly, ratings for which outlooks are ‘stable’ could be downgraded before an outlook moves to positive or negative if circumstances warrant
such an action. Occasionally, Fitch Ratings may be unable to identify the fundamental trend. In these cases, the Rating Outlook may be described as evolving.
A-8
APPENDIX B
DERIVATIVE STRATEGIES AND RISKS
Set forth below is additional information regarding the various techniques involving the use of derivatives.
FINANCIAL FUTURES
A financial future is an
agreement between two parties to buy and sell a security for a set price on a future date. They have been designed by boards of trade which have been designated “contracts markets” by the Commodity Futures Trading Commission (the
“CFTC”).
The purchase of financial futures is for the purpose of hedging the Fund’s existing or anticipated holdings of
long-term debt securities. For example, if the Fund desires to increase its exposure to long-term bonds and has identified long-term bonds it wishes to purchase at a future time, but expects market interest rates to decline (thereby causing the
value of those bonds to increase), it might purchase financial futures. If interest rates did decrease, the value of those to-be-purchased long-term bonds would
increase, but the value of the Fund’s financial futures would be expected to increase at approximately the same rate, thereby helping maintain the Fund’s purchasing power. When the Fund purchases a financial future, it deposits in cash or
securities an “initial margin”, typically equal to an amount between 1% and 5% of the contract amount. Thereafter, the Fund’s account is either credited or debited on a daily basis in correlation with the fluctuation in price of the
underlying future or other requirements imposed by the exchange in order to maintain an orderly market. The Fund must make additional payments to cover debits to its account and has the right to withdraw credits in excess of the liquidity, the Fund
may close out its position at any time prior to expiration of the financial future by taking an opposite position. At closing a final determination of debits and credits is made, additional cash is paid by or to the Fund to settle the final
determination and the Fund realizes a loss or gain depending on whether on a net basis it made or received such payments.
The sale of
financial futures is for the purpose of hedging the Fund’s existing or anticipated holdings of long-term debt securities. For example, if the Fund owns long-term bonds and market interest rates were expected to increase (causing those
bonds’ values to decline), it might sell financial futures. If interest rates did increase, the value of long-term bonds in the Fund’s portfolio would decline, but the value of the Fund’s financial futures would be expected to
increase at approximately the same rate thereby keeping the net asset value of the Fund from declining as much as it otherwise would have.
Among the risks associated with the use of financial futures by the Fund as a hedging or anticipatory device, perhaps the most significant is
the imperfect correlation between movements in the price of the financial futures and movements in the price of the debt securities which are the subject of the hedge.
Thus, if the price of the financial future moves less or more than the price of the securities which are the subject of the hedge, the hedge
will not be fully effective. To compensate for this imperfect correlation, the Fund may enter into financial futures in a greater dollar amount than the dollar amount of the securities being hedged if the historical volatility of the prices of such
securities has been greater than the historical volatility of the financial futures. Conversely, the Fund may enter into fewer financial futures if the historical volatility of the price of the securities being hedged is less than the historical
volatility of the financial futures.
The market prices of financial futures may also be affected by factors other than interest rates.
One of these factors is the possibility that rapid changes in the volume of closing transactions, whether due to volatile markets or movements by speculators, would temporarily distort the normal relationship between the markets in the financial
future and the chosen debt securities. In these circumstances as well as in periods of rapid and large price movements. The Fund might find it difficult or impossible to close out a particular transaction.
B-1
OPTIONS ON FINANCIAL FUTURES
The Fund may also purchase put or call options on financial futures which are traded on a U.S. Exchange or board of trade and enter into
closing transactions with respect to such options to terminate an existing position. The purchase of put options on financial futures is analogous to the purchase of put options by the Fund on its portfolio securities to hedge against the risk of
rising interest rates. As with options on debt securities, the holder of an option may terminate his position by selling an option of the Fund. There is no guarantee that such closing transactions can be effected.
INDEX CONTRACTS
INDEX FUTURES
A tax-exempt bond index which assigns relative values to the
tax-exempt bonds included in the index is traded on the Chicago Board of Trade. The index fluctuates with changes in the market values of all tax-exempt bonds included
rather than a single bond. An index future is a bilateral agreement pursuant to which two parties agree to take or make delivery of an amount of cash-rather than any security-equal to a specified dollar amount times the difference between the index
value at the close of the last trading day of the contract and the price at which the index future was originally written. Thus, an index future is similar to traditional financial futures except that settlement is made in cash.
INDEX OPTIONS
The Fund may also
purchase put or call options on U.S. Government or tax- exempt bond index futures and enter into closing transactions with respect to such options to terminate an existing position. Options on index futures
are similar to options on debt instruments except that an option on an index future gives the purchaser the right, in return for the premium paid, to assume a position in an index contract rather than an underlying security at a specified exercise
price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance of the
writer’s futures margin account which represents the amount by which the market price of the index futures contract, at exercise, is less than the exercise price of the option on the index future.
Bond index futures and options transactions would be subject to risks similar to transactions in financial futures and options thereon as
described above.
SWAP AGREEMENTS
Swap
agreements are two-party contracts entered into primarily by institutional investors, typically 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) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or swapped between the parties are calculated with respect to a notional amount
(the amount or value of the underlying asset used in computing the particular interest rate, return, or other amount to be exchanged) of a particular security, or in a basket of securities representing a particular index. Swap agreements may
include, by way of example, (i) interest rate swaps, in which one party exchanges a commitment to pay a floating, shorter-term interest rate (typically by reference to the rate of a specific security or index) for the other party’s
commitment to pay a fixed, longer-term interest rate (either as specifically agreed, or by reference to a specified security or index); (ii) interest rate caps, in which, in return for a premium, one party agrees to make payments to the other
to the extent that interest rates exceed a specified rate or cap; (iii) interest rate floors, in which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified level or
floor; (iv) interest rate collars, in which a party sells a cap and purchases a floor, or vice versa, in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels or collar amounts; (v) total
return swaps, in which one party commits to pay the total return of an underlying security or asset in return for receiving from the other party a specified return or the return of another instrument (typically a floating short-term interest rate),
and (vi) credit default swap, in which the buyer pays a periodic fee in return for a contingent payment by the seller upon a credit
B-2
event (such as a default) happening with respect to a specified instrument, typically in an amount equivalent to the loss incurred on a specific investment in that security due to the credit
event.
The Fund may enter into such swap agreements for any purpose consistent with the Fund’s investment objective, such as for the
purpose of attempting to obtain, enhance, or preserve a particular desired return or spread at a lower cost to the Fund than if the Fund had invested directly in an instrument that yielded that desired return or spread. The Fund also may enter into
swaps in order to protect against an increase in the price of securities that the Fund anticipates purchasing at a later date.
Whether
the Fund’s use of swap agreements will be successful in furthering its investment objective will depend, in part, on the ability to predict correctly whether certain types of investments are likely to produce greater returns than other
investments and the changes in the future values, indices, or rates covered by the swap agreement. Swap agreements may be considered to be illiquid. Moreover, the Fund bears the risk of loss of the amount expected to be received under a swap
agreement in the event of the default or bankruptcy of a swap agreement counterparty. The Fund will enter swap agreements only with counterparties that Nuveen Fund Advisors reasonably believes are capable of performing under the swap agreements. If
there is a default by the other party to such a transaction, the Fund will have to rely on its contractual remedies (which may be limited by bankruptcy, insolvency or similar laws) pursuant to the agreements related to the transaction. Certain
restrictions imposed on the Fund by the Code may limit the Fund’s ability to use swap agreements. The swap market is largely unregulated.
B-3
APPENDIX C
Nuveen Proxy Voting Policies
Nuveen proxy voting guidelines
Nuveen Asset Management, LLC, Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC
Applicability
These Guidelines apply to
employees of Nuveen acting on behalf of Nuveen Asset Management, LLC (“NAM”), Teachers Advisors, LLC (“TAL”) and TIAA-CREF Investment Management, LLC (“TCIM”) (each an “Adviser” and collectively referred to as
the “Advisers”)
I. Introduction
Our voting practices are guided by our obligations to our clients.
These Guidelines set forth the manner in which the Advisers intend to vote on proxy matters involving publicly traded portfolio companies
held in client portfolios, and serve to assist clients, portfolio companies and other interested parties in understanding how the Advisers intend to vote on proxy-related issues. As indicated in these Guidelines, we monitor portfolio companies’
environmental, social and governance (ESG) practices in an effort to ensure that boards consider these factors in the context of their strategic deliberations. The Guidelines are not exhaustive and do not necessarily dictate how the Advisers will
ultimately vote with respect to any proposal or resolution.
We vote proxies in accordance with what we believe is in the best interest of
our clients. In making those decisions, we are principally guided by advancing long-term shareholder value and may take into account many factors, including input from our investment teams and third-party research. Among other factors, we consider
specific company context, including ESG practices and financial performance. It is our belief that a one-size-fits-all approach
to proxy voting is not appropriate.
Our proxy voting decisions with respect to shareholder resolutions may be influenced by several
additional factors: (i) whether the shareholder resolution process is the appropriate means of addressing the issue; (ii) whether the resolution promotes economic performance and shareholder value; (iii) whether the resolution
promotes ESG best practices; and (iv) whether the information and actions recommended by the resolution are reasonable and practical.
The Guidelines are implemented by Nuveen’s Responsible Investing Team (RI Team) and applied in consideration of the facts and
circumstances of the particular resolution. The RI Team relies on its professional judgment informed by proprietary research and reports provided by a various third-party research providers. The portfolio managers of the Advisers maintain the
ultimate decision-making authority with respect to how proxies will be voted, and may determine to vote contrary to the Guidelines if such portfolio manager determines it is in the best interest of the respective Adviser’s clients to do so. The
rationale for votes submitted contrary to the Guidelines will be documented and maintained.
II. Accountability and transparency
Board of directors
Elect
directors
General Policy: We generally vote in favor of the board’s nominees but will consider withholding or voting against
some or all directors in the following circumstances:
When we conclude that the actions of directors are unlawful,
unethical, negligent, or do not meet fiduciary standards of care and loyalty, or are otherwise not in the best interest of shareholders. Such actions would include:
Egregious compensation practices
Lack of responsiveness to a failed vote
Unequal treatment of shareholders
C-1
Adoption of inappropriate antitakeover devices
When a director has consistently failed to attend board and committee meetings without an appropriate rationale
being provided
Independence
When board independence is not in line with local market regulations or best practices
When a member of executive management sits on a key board committee that should be composed of only independent directors
When directors have failed to disclose, resolve or eliminate conflicts of interest that affect their decisions
Board refreshment
When there is insufficient diversity on the board and the company has not demonstrated its commitment to adding diverse
candidates
When we determine that director tenure is excessive and there has been no recent board refreshment
Contested elections
General
Policy: We will support the candidates we believe will represent the best interests of shareholders.
Majority vote for the election
of directors
General Policy: We generally support shareholder resolutions asking that companies amend their governance documents to
provide for director election by majority vote.
Establish specific board committees
General Policy: We generally vote against shareholder resolutions asking the company to establish specific board committees unless we
believe specific circumstances dictate otherwise.
Annual election of directors
General Policy: We generally support shareholder resolutions asking that each member of the board of a publicly traded operating company
stand for re-election annually.
Cumulative voting
General Policy: We generally do not support proposals asking that shareholders be allowed to cumulate votes in director elections, as
this practice may encourage the election of special interest directors.
Separation of Chairman and Chief Executive Officer
General Policy: We will consider supporting shareholder resolutions asking that the roles of chairman and CEO be separated when we
believe the company’s board structure and operation has insufficient features of independent board leadership, such as the lack of a lead independent director. In addition, we may also support resolutions on a case-by- case basis where we believe, in practice, that there is not a bona-fide lead independent director acting with robust responsibilities or the company’s ESG practices or business performance
suggest a material deficiency in independent influence into the company’s strategy and oversight.
Shareholder rights
Proxy access
General
Policy: We will consider on a case-by-case basis shareholder proposals asking that the company implement a form of proxy access. In making our voting decision, we
will consider several factors, including, but not limited to: current performance of the company, minimum filing thresholds, holding periods, number of director nominees that can be elected, existing governance issues and board/management
responsiveness to material shareholder concerns.
C-2
Ratification of auditor
General Policy: We will generally support the board’s choice of auditor and believe that the auditor should be elected annually.
However, we will consider voting against the ratification of an audit firm where non-audit fees are excessive, where the firm has been involved in conflict of interest or fraudulent activities in connection
with the company’s audit, where there has been a material restatement of financials or where the auditor’s independence is questionable.
Supermajority vote requirements
General Policy: We will generally support shareholder resolutions asking for the elimination of supermajority vote requirements.
Dual-class common stock and unequal voting rights
General Policy: We will generally support shareholder resolutions asking for the elimination of dual classes of common stock or other
forms of equity with unequal voting rights or special privileges.
Right to call a special meeting
General Policy: We will generally support shareholder resolutions asking for the right to call a special meeting. However, we believe a
25% ownership level is reasonable and generally would not be supportive of proposals to lower the threshold if it is already at that level.
Right to act by written consent
General Policy: We will consider on a case-by-case basis
shareholder resolutions requesting the right to act by written consent.
Antitakeover devices (poison pills)
General Policy: We will consider on a case-by-case basis
proposals relating to the adoption or rescission of antitakeover devices with attention to the following criteria:
Whether the company has
demonstrated a need for antitakeover protection
Whether the provisions of the device are in line with generally accepted governance
principles
Whether the company has submitted the device for shareholder approval
Whether the proposal arises in the context of a takeover bid or contest for control
We will generally support shareholder resolutions asking to rescind or put to a shareholder vote antitakeover devices that were adopted without
shareholder approval.
Reincorporation
General Policy: We will evaluate on a case-by-case basis
proposals for reincorporation taking into account the intention of the proposal, established laws of the new domicile and jurisprudence of the target domicile. We will not support the proposal if we believe the intention is to take advantage of laws
or judicial interpretations that provide antitakeover protection or otherwise reduce shareholder rights.
Corporate political influence
General Policies:
We
will generally support reasonable shareholder resolutions seeking disclosure or reports relating to a company’s direct political contributions, including board oversight procedures.
We will generally support reasonable shareholder resolutions seeking disclosure or reports relating to a company’s charitable
contributions and other philanthropic activities.
We may consider not supporting shareholder resolutions that appear to promote a
political agenda that is contrary to the long-term health of the corporation.
C-3
We will evaluate on a
case-by-case basis shareholder resolutions seeking disclosure of a company’s lobbying expenditures.
Closed-end funds
We recognize that many exchange-listed closed-end funds (“CEFs”) have adopted particular
corporate governance practices that deviate from certain policies set forth in the Guidelines. We believe that the distinctive structure of CEFs can provide important benefits to investors, but leaves CEFs uniquely vulnerable to opportunistic
traders seeking short-term gains at the expense of long-term shareholders. Thus, to protect the interests of their long-term shareholders, many CEFs have adopted measures to defend against attacks from short-term oriented activist investors. As
such, in light of the unique nature of CEFs and their differences in corporate governance practices from operating companies, we will consider on a case-by-case basis
proposals involving the adoption of defensive measures by CEFs. This is consistent with our approach to proxy voting that recognizes the importance of case-by-case
analysis to ensure alignment with investment team views, and voting in accordance with the best interest of our shareholders.
Compensation issues
Advisory
votes on executive compensation (say on pay)
General Policy: We will consider on a case-by-case basis the advisory vote on executive compensation (say on pay). We expect well-designed plans that clearly demonstrate the alignment between pay and performance, and we encourage companies to be
responsive to low levels of support by engaging with shareholders. We also prefer that companies offer an annual non-binding vote on executive compensation. In absence of an annual vote, companies should
clearly articulate the rationale behind offering the vote less frequently.
We generally note the following red flags when evaluating
executive compensation plans:
Undisclosed or Inadequate Performance Metrics: We believe that performance goals for compensation
plans should be disclosed meaningfully. Performance hurdles should not be too easily attainable. Disclosure of these metrics should enable shareholders to assess whether the plan will drive long-term value creation.
Excessive Equity Grants: We will examine a company’s past grants to determine the rate at which shares are being issued. We will
also seek to ensure that equity is being offered to more than just the top executives at the company. A pattern of excessive grants can indicate failure by the board to properly monitor executive compensation and its costs.
Lack of Minimum Vesting Requirements: We believe that companies should establish minimum vesting guidelines for senior executives who
receive stock grants. Vesting requirements help influence executives to focus on maximizing the company’s long-term performance rather than managing for short-term gain.
Misalignment of Interests: We support equity ownership requirements for senior executives and directors to align their interests with
those of shareholders.
Special Award Grants: We will generally not support mega-grants. A company’s history of such excessive
grant practices may prompt us to vote against the stock plans and the directors who approve them. Mega-grants include equity grants that are excessive in relation to other forms of compensation or to the compensation of other employees and grants
that transfer disproportionate value to senior executives without relation to their performance. We also expect companies to provide a rationale for any other one-time awards such as a guaranteed bonus or a
retention award.
Excess Discretion: We will generally not support plans where significant terms of awards—such as coverage,
option price, or type of awards—are unspecified, or where the board has too much discretion to override minimum vesting or performance requirements.
Lack of Clawback Policy: We believe companies should establish clawback policies that permit recoupment from any senior executive who
received compensation as a result of defective financial reporting, or whose behavior caused financial harm to shareholders or reputational risk to the company.
C-4
Equity-based compensation plans
General Policy: We will review equity-based compensation plans on a
case-by-case basis, giving closer scrutiny to companies where plans include features that are not performance-based or where potential dilution or burn rate total is
excessive. As a practical matter, we recognize that more dilutive broad-based plans may be appropriate for human-capital intensive industries and for small- or mid-capitalization firms and start-up companies.
We generally note the following red flags when evaluating equity incentive plans:
Evergreen Features: We will generally not support option plans that contain evergreen features, which reserve a specified
percentage of outstanding shares for award each year and lack a termination date.
Reload Options: We will generally not support
reload options that are automatically replaced at market price following exercise of initial grants.
Repricing Options: We will
generally not support plans that authorize repricing. However, we will consider on a case-by-case basis management proposals seeking shareholder approval to reprice
options. We are likely to vote in favor of repricing in cases where the company excludes named executive officers and board members and ties the repricing to a significant reduction in the number of options.
Undisclosed or Inappropriate Option Pricing: We will generally not support plans that fail to specify exercise prices or that establish
exercise prices below fair market value on the date of grant.
Golden parachutes
General Policy: We will vote on a case-by-case basis on
golden parachute proposals, taking into account the structure of the agreement and the circumstances of the situation. However, we would prefer to see a double trigger on all
change-of-control agreements and no excise tax gross-up.
Shareholder resolutions on executive compensation
General Policy: We will consider on a case-by-case basis
shareholder resolutions related to specific compensation practices. Generally, we believe specific practices are the purview of the board.
III.
Guidelines for ESG shareholder resolutions
We generally support shareholder resolutions seeking reasonable disclosure of the environmental
or social impact of a company’s policies, operations or products. We believe that a company’s management and directors should determine the strategic impact of environmental and social issues and disclose how they are dealing with these
issues to mitigate risk and advance long-term shareholder value.
Environmental issues
Global climate change
General
Policy: We will generally support reasonable shareholder resolutions seeking disclosure of greenhouse gas emissions, the impact of climate change on a company’s business activities and products and strategies designed to reduce the
company’s long-term impact on the global climate.
Use of natural resources
General Policy: We will generally support reasonable shareholder resolutions seeking disclosure or reports relating to a company’s
use of natural resources, the impact on its business of declining resources and its plans to improve the efficiency of its use of natural resources.
Impact on ecosystems
General
Policy: We will generally support reasonable shareholder resolutions seeking disclosure or reports relating to a company’s initiatives to reduce any harmful impacts or other hazards to local, regional or global ecosystems that result from
its operations or activities.
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Animal welfare
General Policy: We will generally support reasonable shareholder resolutions asking for reports on the company’s impact on animal
welfare.
Issues related to customers
Product responsibility
General Policy: We will generally support reasonable shareholder resolutions seeking disclosure relating to the quality, safety and
impact of a company’s goods and services on the customers and communities it serves.
Predatory lending
General Policy: We will generally support reasonable shareholder resolutions asking companies for disclosure about the impact of lending
activities on borrowers and about policies designed to prevent predatory lending practices.
Issues related to employees and suppliers
Diversity and nondiscrimination
General Policies:
We will
generally support reasonable shareholder resolutions seeking disclosure or reports relating to a company’s nondiscrimination policies and practices, or seeking to implement such policies, including equal employment opportunity standards.
We will generally support reasonable shareholder resolutions seeking disclosure or reports relating to a company’s workforce, board
diversity, and gender pay equity policies and practices.
Global labor standards
General Policy: We will generally support reasonable shareholder resolutions seeking a review of a company’s labor standards and
enforcement practices, as well as the establishment of global labor policies based upon internationally recognized standards.
Issues
related to communities
Corporate response to global health risks
General Policy: We will generally support reasonable shareholder resolutions seeking disclosure or reports relating to significant
public health impacts resulting from company operations and products, as well as the impact of global health pandemics on the company’s operations and long-term growth.
Global human rights codes of conduct
General Policy: We will generally support reasonable shareholder resolutions seeking a review of a company’s human rights standards
and the establishment of global human rights policies, especially regarding company operations in conflict zones or areas of weak governance.
Disclosures
Nuveen Asset Management, LLC, Teachers Advisors, LLC, and TIAA-CREF Investment Management, LLC are SEC registered investment advisers and subsidiaries of
Nuveen, LLC
Nuveen proxy voting policy
Nuveen Asset
Management, LLC, Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC
Applicability
This Policy applies to Nuveen employees acting on behalf of Nuveen Asset Management, LLC, Teachers Advisors, LLC, and TIAA-CREF Investment
Management, LLC
C-6
Policy purpose and statement
Proxy voting is the primary means by which shareholders may influence a publicly traded company’s governance and operations and thus
create the potential for value and positive long-term investment performance. When an SEC registered investment adviser has proxy voting authority, the adviser has a fiduciary duty to vote proxies in the best interests of its clients and must not
subrogate its clients’ interests to its own. In their capacity as fiduciaries and investment advisers, Nuveen Asset Management, LLC (“NAM”), Teachers Advisors, LLC (“TAL”) and TIAA-CREF Investment Management, LLC
(“TCIM”), (each an “Adviser” and collectively, the “Advisers”), vote proxies for the Portfolio Companies held by their respective clients, including investment companies and other pooled investment vehicles,
institutional and retail separate accounts, and other clients as applicable. The Advisers have adopted this Policy, the Nuveen Proxy Voting Guidelines, and the Nuveen Proxy Voting Conflicts of Interest Policy for voting the proxies of the Portfolio
Companies they manage. The Advisers leverage the expertise and services of an internal group referred to as the Responsible Investing Team (RI Team) to administer the Advisers’ proxy voting. The RI Team adheres to the Advisers’ Proxy
Voting Guidelines which are reasonably designed to ensure that the Advisers vote client securities in the best interests of the Advisers’ clients.
Policy statement
Proxy voting is a key
component of a Portfolio Company’s corporate governance program and is the primary method for exercising shareholder rights and influencing the Portfolio Company’s behavior. Nuveen makes informed voting decisions in compliance with Rule 206(4)-6 (the “Rule”) of the Investment Advisers Act of 1940, as amended (the “Advisers Act”) and applicable laws and regulations, (e.g., the Employee Retirement Income Security Act of 1974,
“ERISA”).
Enforcement
As
provided in the TIAA Code of Business Conduct, all employees are expected to comply with applicable laws and regulations, as well as the relevant policies, procedures and compliance manuals that apply to Nuveen’s business activities. Violation
of this Policy may result in disciplinary action up to and including termination of employment.
Terms and definitions
Advisory Personnel includes the Adviser’s portfolio managers and/or research analysts.
Proxy Voting Guidelines (the “Guidelines”) are a set of pre-determined
principles setting forth the manner in which the Advisers intend to vote on specific voting categories, and serve to assist clients, Portfolio Companies, and other interested parties in understanding how the Advisers intend to vote on proxy-related
matters. The Guidelines are not exhaustive and do not necessarily dictate how the Advisers will ultimately vote with respect to any proposal or resolution.
Portfolio Company includes any publicly traded company held in an account that is managed by an Adviser.
Policy requirements
Investment advisers, in
accordance with the Rule, are required to (i) adopt and implement written policies and procedures that are reasonably designed to ensure that proxies are voted in the best interest of clients, and address resolution of material conflicts that
may arise, (ii) describe their proxy voting procedures to their clients and provide copies on request, and (iii) disclose to clients how they may obtain information on how the Advisers voted their proxies.
The Nuveen Proxy Voting Committee (the “Committee”), the Advisers, the RI Team and Nuveen Compliance are subject to the respective
requirements outlined below under Roles and Responsibilities.
Although it is the general policy to vote all applicable proxies received in
a timely fashion with respect to securities selected by an Adviser for current clients, the Adviser may refrain from voting in certain circumstances where such voting would be disadvantageous, materially burdensome or impractical, or otherwise
inconsistent with the overall best interest of clients.
C-7
Roles and responsibilities
Nuveen Proxy Voting Committee
The purpose of the Committee is to establish a governance framework to oversee the proxy voting activities of the Advisers in accordance with
the Policy. The Committee has delegated responsibility for the implementation and ongoing administration of the Policy to the RI Team, subject to the Committee’s ultimate oversight and responsibility as outlined in the Committee’s Proxy
Voting Charter.
Advisers
| 1. |
Advisory Personnel maintain the ultimate decision-making authority with respect to how proxies will be voted,
unless otherwise instructed by a client, and may determine to vote contrary to the Guidelines and/or a vote recommendation of the RI Team if such Advisory Personnel determines it is in the best interest of the Adviser’s clients to do so. The
rationale for all such contrary vote determinations will be documented and maintained. |
| 2. |
When voting proxies for different groups of client accounts, Advisory Personnel may vote proxies held by the
respective client accounts differently depending on the facts and circumstances specific to such client accounts. The rationale for all such vote determinations will be documented and maintained. |
| 3. |
Advisory Personnel must comply with the Nuveen Proxy Voting Conflicts of Interest Policy with respect to
potential material conflicts of interest. |
Responsible Investing Team
| 1. |
Performs day-to-day
administration of the Advisers’ proxy voting processes. |
| 2. |
Seeks to vote proxies in adherence to the Guidelines, which have been constructed in a manner intended to align
with the best interests of clients. In applying the Guidelines, the RI Team, on behalf of the Advisers, takes into account many factors, including, but not limited to: |
Input from Advisory Personnel
Third party research
Specific
Portfolio Company context, including environmental, social and governance practices, and financial performance.
| 3. |
Delivers copies of the Advisers’ Policy to clients and prospective clients upon request in a timely
manner, as appropriate. |
| 4. |
Assists with the disclosure of proxy votes as applicable on corporate website(s) and elsewhere as required by
applicable regulations. |
| 5. |
Prepares reports of proxies voted on behalf of the Advisers’ investment company clients to their Boards or
committees thereof, as applicable. |
| 6. |
Performs an annual vote reconciliation for review by the Committee. |
| 7. |
Arranges the annual service provider due diligence, including a review of the service provider’s potential
conflicts of interests, and presents the results to the Committee. |
| 8. |
Facilitates quarterly Committee meetings, including agenda and meeting minute preparation.
|
| 9. |
Complies with the Nuveen Proxy Voting Conflicts of Interest Policy with respect to potential material conflicts
of interest. |
| 10. |
Creates and retains certain records in accordance with Nuveen’s Record Management program.
|
| 11. |
Ensures proxy voting service provider makes and retains certain records as required under applicable
regulation. |
| 12. |
Assesses, in cooperation with Advisory Personnel, whether securities on loan should be recalled in order to
vote their proxies. |
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Nuveen Compliance
| 1. |
Ensures proper disclosure of Advisers’ Policy to clients as required by regulation or otherwise.
|
| 2. |
Ensures proper disclosure to clients of how they may obtain information on how the Advisers voted their
proxies. |
| 3. |
Assists the RI Team with arranging the annual service provider due diligence and presenting the results to the
Committee. |
| 4. |
Monitors for compliance with this Policy and retains records relating to its monitoring activities pursuant to
Nuveen’s Records Management program. |
Governance
Review and approval
This Policy
will be reviewed at least annually and will be updated sooner if substantive changes are necessary. The Policy Leader, the Committee and the NEFI Compliance Committee are responsible for the review and approval of this Policy.
Implementation
Nuveen has
established the Committee to provide centralized management and oversight of the proxy voting process administered by the RI Team for the Advisers in accordance with its Proxy Voting Committee Charter and this Policy.
Exceptions
Any request for a
proposed exception or variation to this Policy will be submitted to the Committee for approval and reported to the appropriate governance committee(s), where appropriate.
Related documents
Nuveen Proxy Voting Committee
Charter
Nuveen Policy Statement on Responsible Investing
Nuveen Proxy Voting Guidelines
Nuveen Proxy Voting Conflicts of Interest Policy and Procedures
Nuveen proxy voting conflicts of interest policy and procedures
Applicability
This Policy applies to employees
of Nuveen (“Nuveen”) acting on behalf of Nuveen Asset Management, LLC (“NAM”), Teachers Advisors, LLC (“TAL”) and TIAA-CREF Investment Management, LLC (“TCIM”), (each an “Adviser” and collectively
referred to as the “Advisers”)
Policy purpose and statement
Proxy voting by investment advisers is subject to U.S. Securities and Exchange Commission (“SEC”) rules and regulations, and for
accounts subject to ERISA, U.S. Department of Labor (“DOL”) requirements. These rules and regulations require policies and procedures reasonably designed to ensure proxies are voted in the best interest of clients and that such procedures
set forth how the adviser addresses material conflicts that may arise between the Adviser’s interests and those of its clients. The purpose of this Proxy Voting Conflicts of Interest Policy and Procedures (“Policy”) is to describe how
the Advisers monitor and address the risks associated with Material Conflicts of Interest arising out of business and personal relationships that could affect proxy voting decisions.
Nuveen’s Responsible Investing Team (“RI Team”) is responsible for providing vote recommendations, based on the Nuveen Proxy
Voting Guidelines (the “Guidelines”), to the Advisers and for administering the voting of proxies on behalf of the Advisers. When determining how to vote proxies, the RI Team adheres to the
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Guidelines which are reasonably designed to ensure that the Advisers vote proxies in the best interests of the Advisers’ clients.
Advisers may face certain potential Material Conflicts of Interest when voting proxies. The procedures set forth below have been reasonably
designed to identify, monitor, and address potential Material Conflicts of Interest to ensure that the Advisers’ voting decisions are based on the best interest of their clients and are not the product of a conflict.
Policy statement
The Advisers have a fiduciary
duty to vote proxies in the best interests of their clients and must not subrogate the interests of their clients to their own.
Enforcement
As provided in the TIAA Code of Business Conduct, all employees are expected to comply with applicable laws and regulations, as well as the
relevant policies, procedures and compliance manuals that apply to Nuveen’s business activities. Violation of this Policy may result in disciplinary action up to and including termination of employment.
Terms and definitions
Advisory Personnel
includes the Advisers’ portfolio managers and research analysts.
Conflicts Watch List (“Watch List”) refers to a
list maintained by the RI Team based on the following:
| 1. |
The positions and relationships of the following categories of individuals are evaluated to assist in
identifying a potential Material Conflict with a Portfolio Company: |
| |
ii. |
Nuveen Executive Leadership Team |
| |
iii. |
RI Team members who provide proxy voting recommendations on behalf of the Advisers, |
| |
iv. |
Advisory Personnel, and |
| |
v. |
Household Members of the parties listed above in Nos. 1(i)–1(iv) |
The following criteria constitutes a potential Material Conflict:
| |
• |
|
Any individual identified above in 1(i)–1(v) who serves on a Portfolio Company’s board of directors;
and/or |
| |
• |
|
Any individual identified above in 1(v) who serves as a senior executive of a Portfolio Company.
|
| 2. |
In addition, the following circumstances have been determined to constitute a potential Material Conflict:
|
| |
i. |
Voting proxies for Funds sponsored by a Nuveen Affiliated Entity (i.e., registered investment funds and other
funds that require proxy voting) held in client accounts, |
| |
ii. |
Voting proxies for Portfolio Companies that are direct advisory clients of the Advisers and/or the Nuveen
Affiliated Entities, |
| |
iii. |
Voting proxies for Portfolio Companies that have a material distribution relationship* with regard to the
products or strategies of the Advisers and/or the Nuveen Affiliated Entities, |
| |
iv. |
Voting proxies for Portfolio Companies that are institutional investment consultants with which the Advisers
and/or the Nuveen Affiliated Entities have engaged for any material business opportunity* and |
| |
v. |
Any other circumstance where the RI Team, the Nuveen Proxy Voting Committee (the “Committee”), the
Advisers, Nuveen Legal or Nuveen Compliance are aware of in which the Adviser’s duty to serve its clients’ interests could be materially compromised. |
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In addition, certain conflicts may arise when a Proxy Service Provider or their affiliate(s), have determined
and/or disclosed that a relationship exists with i) a Portfolio Company ii) an entity acting as a primary shareholder proponent with respect to a Portfolio Company or iii) another party. Such relationships include, but are not limited to, the
products and services provided to, and the revenue obtained from, such Portfolio Company or its affiliates. The Proxy Service Provider is required to disclose such relationships to the Advisers, and the RI Team reviews and evaluates the Proxy
Service Provider’s disclosed conflicts of interest and associated controls annually and reports its assessment to the Committee.
Household Member includes any of the following who reside or are expected to reside in your household for at least 90 days a year:
i) spouse or Domestic Partner, ii) sibling, iii) child, stepchild, grandchild, parents, grandparent, stepparent, and in-laws (mother, father, son, daughter, brother, sister).
Domestic Partner is defined as an individual who is neither a relative of, or legally married to, a Nuveen employee but shares a
residence and is in a mutual commitment similar to marriage with such Nuveen employee.
Material Conflicts of Interest (“Material
Conflict”) A conflict of interest that reasonably could have the potential to influence a recommendation based on the criteria described in this Policy.
Nuveen Affiliated Entities refers to TIAA and entities that are under common control with the Advisers and that provide investment
advisory services to third party clients.† TIAA and the Advisers will undertake reasonable efforts to identify and manage any
potential TIAA-related conflicts of interest.
Portfolio Company refers to any publicly traded company held in an account that is
managed by an Adviser or a Nuveen Affiliated Entity.
Proxy Service Provider(s) refers to any independent third-party vendor(s) who
provides proxy voting administrative, research and/or recordkeeping services to Nuveen.
Proxy Voting Guidelines (the
“Guidelines”) are a set of pre-determined principles setting forth the manner in which the Advisers generally intend to vote on specific voting categories and serve to assist clients, Portfolio
Companies, and other interested parties in understanding how the Advisers generally intend to vote proxy-related matters. The Guidelines are not exhaustive and do not necessarily dictate how the Advisers will ultimately vote with respect to any
proposal or resolution.
Proxy Voting Conflicts of Interest Escalation Form (“Escalation Form”) Used in limited
circumstances as described below to formally document certain requests to deviate from the Guidelines, the rationale supporting the request, and the ultimate resolution.
| * |
Such criteria is defined in a separate standard operating procedure. |
| † |
Such list is maintained in a separate standard operating procedure. |
Policy requirements
The Advisers have a
fiduciary duty to vote proxies in the best interests of their clients and must not subrogate the interests of their clients to their own.
The RI Team and Advisory Personnel are prohibited from being influenced in their proxy voting decisions by any individual outside the
established proxy voting process. The RI Team and Advisory Personnel are required to report to Nuveen Compliance any individuals or parties seeking to influence proxy votes outside the established proxy voting process.
The RI Team generally seeks to vote proxies in adherence to the Guidelines. In the event that a potential Material Conflict has been
identified, the Committee, the RI Team, Advisory Personnel and Nuveen Compliance are required to comply with the following:
Proxies are
generally voted in accordance with the Guidelines. In instances where a proxy is issued by a Portfolio Company on the Watch List, and the RI Team’s vote direction is in support of company management and either contrary to the Guidelines or the
Guidelines require a case by case review, then the RI Team vote
C-11
recommendation is evaluated using established criteria‡ to determine
whether a potential conflict exists. In instances where it is determined a potential conflict exists, the vote direction shall default to the recommendation of an independent third-party Proxy Service Provider based on such provider’s benchmark
policy. To the extent the RI Team believes there is a justification to vote contrary to the Proxy Service Provider’s benchmark recommendation in such an instance, then such requests are evaluated and mitigated pursuant to an Escalation Form
review process as described in the Roles and Responsibilities section below. In all cases votes are intended to be in line with the Guidelines and in the best interests of clients.
The Advisers are required to adhere to the baseline standards and guiding principles governing client and personnel conflicts as outlined in
the TIAA Conflicts of Interest Policy to assist in identifying, escalating and addressing proxy voting conflicts in a timely manner.
| ‡ |
Such criteria is defined in a separate standard operating procedure. |
Roles and responsibilities
Nuveen Proxy Voting
Committee
| 1. |
Annually, review and approve the criteria constituting a Material Conflict involving the individuals and
entities named on the Watch List. |
| 2. |
Review and approve the Policy annually, or more frequently as required. |
| 3. |
Review Escalation Forms as described above to determine whether the rationale of the recommendation is clearly
articulated and reasonable relative to the potential Material Conflict. |
| 4. |
Review RI Team Material Conflicts reporting. |
| 5. |
Review and consider any other matters involving the Advisers’ proxy voting activities that are brought to
the Committee. |
Responsible Investing Team
| 1. |
Promptly disclose RI Team members’ Material Conflicts to Nuveen Compliance. |
| 2. |
RI Team members must recuse themselves from all decisions related to proxy voting for the Portfolio Company
seeking the proxy for which they personally have disclosed, or are required to disclose, a Material Conflict. |
| 3. |
Compile, administer and update the Watch List promptly based on the Watch List criteria described herein as
necessary. |
| 4. |
Evaluate vote recommendations for Portfolio Companies on the Watch List, based on established criteria to
determine whether a vote shall default to the third-party Proxy Service Provider, or whether an Escalation Form is required. |
| 5. |
In instances where an Escalation Form is required as described above, the RI Team member responsible for the
recommendation completes and submits the form to an RI Team manager and the Committee. The RI Team will specify a response due date from the Committee typically no earlier than two business days from when the request was delivered. While the RI Team
will make reasonable efforts to provide a two business day notification period, in certain instances the required response date may be shortened. The Committee reviews the Escalation Form to determine whether a Material Conflict exists and whether
the rationale of the recommendation is clearly articulated and reasonable relative to the existing conflict. The Committee will then provide its response in writing to the RI Team member who submitted the Escalation Form. |
| 6. |
Provide Nuveen Compliance with established reporting. |
| 7. |
Prepare Material Conflicts reporting to the Committee and other parties, as applicable. |
| 8. |
Retain Escalation Forms and responses thereto and all other relevant documentation in conformance with
Nuveen’s Record Management program. |
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Advisory Personnel
| 1. |
Promptly disclose Material Conflicts to Nuveen Compliance. |
| 2. |
Provide input and/or vote recommendations to the RI Team upon request. Advisory Personnel are prohibited from
providing the RI Team with input and/or recommendations for any Portfolio Company for which they have disclosed, or are required to disclose, a Material Conflict. |
| 3. |
From time to time as part of the Adviser’s normal course of business, Advisory Personnel may initiate an
action to override the Guidelines for a particular proposal. For a proxy vote issued by a Portfolio Company on the Watch List, if Advisory Personnel request a vote against the Guidelines and in favor of Portfolio Company management, then the request
will be evaluated by the RI Team in accordance with their established criteria and processes described above. To the extent an Escalation Form is required, the Committee reviews the Escalation Form to determine whether the rationale of the
recommendation is clearly articulated and reasonable relative to the potential Material Conflict. |
Nuveen Compliance
| 1. |
Determine criteria constituting a Material Conflict involving the individuals and entities named on the Watch
List. |
| 2. |
Determine parties responsible for collection of, and providing identified Material Conflicts to, the RI Team
for inclusion on the Watch List. |
| 3. |
Perform periodic reviews of votes where Material Conflicts have been identified to determine whether the votes
were cast in accordance with this Policy. |
| 4. |
Develop and maintain, in consultation with the RI Team, standard operating procedures to support the Policy.
|
| 5. |
Perform periodic monitoring to determine adherence to the Policy. |
| 6. |
Administer training to the Advisers and the RI Team, as applicable, to ensure applicable personnel understand
Material Conflicts and disclosure responsibilities. |
| 7. |
Assist the Committee with the annual review of this Policy. |
Nuveen Legal
| 1. |
Provide legal guidance as requested. |
Governance
Review and approval
This Policy will be reviewed at least annually and will be updated sooner if changes are necessary. The Policy Leader, the Committee and the
NEFI Compliance Committee are responsible for the review and approval of this Policy.
Implementation
Nuveen has established the Committee to provide centralized management and oversight of the proxy voting process administered by the RI Team
for the Advisers in accordance with its Proxy Voting Committee Charter and this Policy.
Exceptions
Any request for a proposed exception or variation to this Policy will be submitted to the Committee for approval and reported to the
appropriate governance committee(s), where appropriate.
C-13
Related documents
Nuveen Proxy Voting Committee Charter
Nuveen Policy Statement on Responsible Investing
Nuveen Proxy Voting Policy
Nuveen Proxy Voting Guidelines
TIAA Conflicts of Interest Policy
C-14
PART C—OTHER INFORMATION
Item 25: Financial Statements and Exhibits.
Financial Highlights for the Nuveen Municipal Income Fund, Inc. (the “Fund” or the “Registrant”) for the:
| |
• |
|
Fiscal period ended April 30, 2023 (unaudited) are incorporated in Part A by reference to the
Registrant’s April 30, 2023 Semi-Annual Report (unaudited) on Form N-CSR, as filed with the
U.S. Securities and Exchange Commission (the “SEC”) via EDGAR Accession No. 0001193125-23-182584 on July 6, 2023; |
| |
• |
|
Fiscal years ended October 31, 2022, 2021, 2020, 2019, and 2018 are incorporated in Part A by reference to
the Registrant’s October 31, 2022 Annual Report (audited) on Form N-CSR, as filed with the SEC via EDGAR Accession No. 0001193125-23-004803 on January 9, 2023; and
|
| |
• |
|
Fiscal years ended October 31, 2017, 2016, 2015, 2014 and 2013 are incorporated in Part A by reference to
the Registrant’s October 31, 2017 Annual Report (audited) on Form N-CSR, as filed with the SEC via EDGAR
Accession No. 0000891804-18-000010 on January 8, 2018. |
Contained in Part B:
Financial
Statements are incorporated in Part B by reference to Registrant’s April 30, 2023 Semi-Annual Report (unaudited) on Form N-CSR, as filed with the SEC via EDGAR Accession No. 0001193125-23-182584 on July
6, 2023, and the Registrant’s October 31, 2022 Annual Report (audited) on Form N-CSR, as filed with the SEC via EDGAR Accession No. 0001193125-23-004803 on January 9, 2023.
|
|
|
|
|
| |
a. |
|
|
Registrant’s Articles of Incorporation dated February
25, 1988, are incorporated herein by reference to Exhibit a. to the Registrant’s Registration Statement on Form N-2 (File Nos. 333-211435 and 811-05488), as filed with the SEC via EDGAR Accession No. 0001193125-16-594420 on May 18, 2016. |
|
|
| |
b. |
|
|
Registrant’s Amended and Restated By-Laws dated May
20, 2020 are incorporated herein by reference to Exhibit b. to the Registrant’s Registration Statement on Form N-2 (File Nos. 333-237289 and 811-05488), as filed with the SEC via EDGAR Accession No. 0001193125-20-249182 on September 18, 2020. |
|
|
| |
c. |
|
|
None. |
|
|
| |
d. |
|
|
None. |
|
|
| |
e. |
|
|
Terms and Conditions of the Dividend Reinvestment Plan are incorporated herein by reference to Exhibit
e. to the Registrant’s Registration Statement on Form N-2 (File Nos. 333-211435 and 811-05488),
as filed with the SEC via EDGAR Accession No. 0001193125-16-594420 on May 18, 2016. |
|
|
| |
f. |
|
|
None. |
|
|
| |
g.1 |
|
|
Investment Management Agreement between the Registrant and Nuveen Fund Advisors, LLC dated October
1, 2014 is incorporated herein by reference to Exhibit g.1 to the Registrant’s Registration Statement on Form N-2 (File Nos. 333-211435 and 811-05488), as filed with the SEC via EDGAR Accession No. 0001193125-16-594420 on May 18, 2016. |
|
|
| |
g.2 |
|
|
Continuance of Management Agreements, dated July
31, 2023, between the Registrant and Nuveen Fund Advisors, LLC is incorporated herein by reference to Exhibit d.3 to Nushares ETF Trust’s Registration Statement on Form N-1A (File Nos. 333-212032 and 811-23161), as filed with the SEC via EDGAR Accession No.
0 001193125-23-219223 on August 23, 2023. |
|
|
| |
g.3 |
|
|
Investment Sub-Advisory Agreement between Nuveen Fund Advisors, LLC and Nuveen Asset Management LLC dated
October 1, 2014 is incorporated herein by reference to Exhibit g.3 to Pre-Effective Amendment No. 1 to the Registrant’s Registration Statement on
Form N-2 (File Nos. 333-211435 and 811-05488), as filed with the SEC via EDGAR Accession No. 0001193125-17-172036 on May 16, 2017. |
|
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|
| |
g.4 |
|
|
Notice of Continuance of Investment Sub-Advisory Agreements, dated July
31, 2023, between Nuveen Fund Advisors, LLC and Nuveen Asset Management, LLC is incorporated herein by reference to Exhibit d.11 to Nushares ETF Trust’s Registration Statement on Form N-1A (File Nos. 333-212032 and 811-23161), as filed with the SEC via EDGAR Accession No.
0 001193125-23-219223 on August 23, 2023. |
|
|
| |
h.1 |
|
|
Distribution Agreement between the Registrant and Nuveen Securities, LLC to be filed by amendment. |
|
|
| |
h.2 |
|
|
Dealer Agreement between Nuveen Securities, LLC and Stifel, Nicolaus & Company, Incorporated to be filed by amendment. |
|
|
| |
i. |
|
|
Nuveen Fund Board Voluntary Deferred Compensation Plan for Independent Directors and Trustees, effective November
1, 2021, is incorporated herein by reference to Exhibit f. to Nuveen Global Net Zero Transition ETF’s Registration Statement on Form N-1A (File Nos. 333-212032 and 811-23161), as filed with the SEC via EDGAR Accession No. 0001193125-22-292568 on November 25,
2022. |
|
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| |
j.1 |
|
|
Amended and Restated Master Custodian Agreement between the Registrant and State Street Bank and Trust Company dated July
15, 2015 is incorporated herein by reference to Exhibit j.1 to the Registrant’s Registration Statement on Form N-2 (File Nos. 333-211435 and 811-05488), as filed with the SEC via EDGAR Accession No. 0001193125-16-594420 on May 18, 2016. |
|
|
| |
j.2 |
|
|
Appendix A, updated as of August
1, 2017, to the Amended and Restated Master Custodian Agreement between the Registrant and State Street Bank and Trust Company dated July 15, 2015 is incorporated herein by reference to Exhibit j.2 to Post-Effective Amendment No.
1 to the Registrant’s Registration Statement on Form N-2 (File Nos. 333-211435 and 811-05488),
as filed with the SEC via EDGAR Accession No. 0001193125-18-063431 on February 28, 2018. |
|
|
| |
j.3 |
|
|
Amendment and revised Appendix A, effective July
31, 2020, to the Amended and Restated Master Custodian Agreement between the Registrant and State Street Bank and Trust Company dated July
15, 2015 is incorporated herein by reference to Exhibit j.2 to Post-Effective Amendment No. 1 to Nuveen AMT-Free Municipal Value Fund’s Registration Statement on Form N-2 (File Nos. 333-223524 and 811-22253), as filed with the SEC via EDGAR Accession No. 0001193125-20-236529 on September 1, 2020. |
|
|
| |
j.4 |
|
|
Amendment and revised Appendix A, effective September
8, 2022, to the Amended and Restated Master Custodian Agreement between the Registrant and State Street Bank and Trust Company dated July
15, 2015 is incorporated herein by reference to Exhibit g.3 to Post-Effective Amendment No. 81 to Nuveen Investment Trust V’s Registration Statement on Form N-1A (File Nos. 333-138592 and 811-21979), as filed with the SEC via EDGAR Accession No.
0001193125-22-314076 on December 29, 2022. |
|
|
| |
k.1 |
|
|
Transfer Agency and Service Agreement between the Registrant and Computershare Inc. and Computershare Trust Company N.A. dated June
15, 2017 is incorporated herein by reference to Exhibit k.1 to Post-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form N-2 (File
Nos. 333-211435 and 811-05488), as filed with the SEC via EDGAR Accession No. 0001193125-19-069049
on March 8, 2019. |
|
|
| |
k.2 |
|
|
First Amendment and updated Schedule A, dated September
7, 2017, to the Transfer Agency and Service Agreement between the Registrant and Computershare Inc. and Computershare Trust Company N.A. dated June 15, 2017 is incorporated herein by reference to Exhibit k.2 to Post-Effective Amendment No.
2 to the Registrant’s Registration Statement on Form N-2 (File Nos. 333-211435 and 811-05488),
as filed with the SEC via EDGAR Accession No. 0001193125-19-069049 on March 8, 2019. |
|
|
| |
k.3 |
|
|
Second Amendment and updated Schedule A, dated February
26, 2018, to the Transfer Agency and Service Agreement dated June
15, 2017 between the Registrant and Computershare Inc. and Computershare Trust Company, N.A. is incorporated herein by reference to Exhibit k.3 to the Registrant’s Registration Statement on Form N-2 (File Nos.
333-237289 and 811-05488), as filed with the SEC via EDGAR Accession
No. 0001193125-20-249182 on September 18, 2020. |
|
|
| |
k.4 |
|
|
Third Amendment and updated Schedule A, dated May
11, 2020, to the Transfer Agency and Service Agreement dated June
15, 2017 between the Registrant and Computershare Inc. and Computershare Trust Company, N.A. is incorporated herein by reference to Exhibit k.4 to the Registrant’s Registration Statement on Form N-2 (File Nos.
333-237289 and 811-05488), as filed with the SEC via EDGAR Accession
No. 0001193125-20-249182 on September 18, 2020. |
|
|
|
|
|
| |
k.5 |
|
|
Amended and Restated Schedule A, effective March
28, 2023, to the Transfer Agency and Service Agreement between the Registrant and Computershare Inc. and Computershare Trust Company N.A. is incorporated herein by reference to Exhibit k.5 to Nuveen California Select Tax Free Income Portfolio’s Registration
Statement on Form N-2 (File Nos. 333-271871 and 811-06623), as filed with the SEC via EDGAR Accession No. 0001193125-23-143216 on May 12, 2023. |
|
|
| |
k.6 |
|
|
Rule 12d1-4 Investment Agreement between RiverNorth Funds as Acquiring Funds and Nuveen CEFs as Acquired
Funds, dated January 19, 2022, is incorporated herein by reference to Exhibit k.6 to Nuveen California Select Tax Free Income Portfolio’s Registration Statement on Form N-2 (File Nos. 333-271871 and 811-06623), as filed with the SEC via EDGAR Accession
No. 0001193125-23-143216 on May 12, 2023. |
|
|
| |
l.1 |
|
|
Opinion of Morgan, Lewis & Bockius LLP to be filed by amendment. |
|
|
| |
1.2 |
|
|
Consent of Morgan, Lewis & Bockius LLP to be filed by amendment. |
|
|
| |
l.3 |
|
|
Opinion of Dorsey & Whitney LLP to be filed by amendment. |
|
|
| |
l.4 |
|
|
Consent of Dorsey & Whitney LLP to be filed by amendment. |
|
|
| |
m. |
|
|
None. |
|
|
| |
n. |
|
|
Consent of independent registered public accountants, KPMG LLP, to be filed by amendment. |
|
|
| |
o. |
|
|
None. |
|
|
| |
p. |
|
|
None. |
|
|
| |
q. |
|
|
None. |
|
|
| |
r.1 |
|
|
Code of Ethics and Reporting Requirements of Nuveen, dated February
15, 2023, is incorporated herein by reference to Exhibit r.1 to Nuveen California Select Tax-Free Income Portfolio’s Registration Statement on Form N-2 (File Nos. 333-271871 and 811-06623), as filed with the SEC via EDGAR Accession No.
0001193125-23-143216 on May 12, 2023. |
|
|
| |
r.2 |
|
|
Code of Ethics for the Independent Trustees of the Nuveen Funds, as last amended May
23, 2019, is incorporated herein by reference to Exhibit r.2 to the Registrant’s Registration Statement on Form N-2 (File Nos. 333-237289 and 811-05488), as filed with the SEC via EDGAR Accession No. 0001193125-20-079331 on March 19, 2020. |
|
|
| |
s. |
|
|
Calculation of Filing Fee Tables is filed herewith. |
|
|
| |
t. |
|
|
Powers of Attorney dated June 14, 2023 are incorporated herein by reference to Exhibit t. to Nuveen Select Tax-Free Income Portfolio’s Registration Statement on Form N-2 (File Nos.
333-271575 and 811-06548), as filed with the SEC via EDGAR Accession No.
0001193125-23-170300 on June 21, 2023. |
Item 26: Marketing Arrangements.
See relevant Sections of the Distribution Agreement and Dealer Agreement to be filed as Exhibits h.1 and h.2, respectively, to this Registration Statement.
Item 27: Other Expenses of Issuance and Distribution
|
|
|
|
|
| Printing and Engraving Fees |
|
$ |
50,000 |
|
| Legal Fees |
|
$ |
60,000 |
|
| Accounting Fees |
|
$ |
10,000 |
|
| Financial Industry Regulatory Authority Fees |
|
$ |
2,000 |
|
| Stock Exchange Listing Fees |
|
$ |
3,000 |
|
| Securities and Exchange Commission Registration Fees |
|
$ |
1,000 |
|
| Miscellaneous Fees |
|
$ |
4,000 |
|
|
|
|
|
|
|
|
$ |
130,000 |
|
|
|
|
|
|
Item 28: Persons Controlled by or under Common Control.
Not applicable.
Item 29: Number of
Holders of Securities.
As of August 31, 2023:
|
|
|
|
|
| Title of Class |
|
Number of Record Holders |
|
| Shares of Common Stock, $0.01 par value |
|
|
4,201 |
|
Item 30: Indemnification.
Article EIGHTH of the Registrant’s Articles of Incorporation provides as follows: To the maximum extent permitted by the Minnesota
Business Corporation Act, as from time to time amended, the Corporation shall indemnify its currently acting and its former directors, officers, employees and agents, and those persons who, at the request of the Corporation serve or have served
another corporation, partnership, joint venture, trust or other enterprise in one or more such capacities. The indemnification provided for herein shall not be deemed exclusive of any other rights to which those seeking indemnification may otherwise
be entitled.
Expenses (including attorneys’ fees) incurred in defending a civil or criminal action, suit or proceeding (including
costs connected with the preparation of a settlement) may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding, if authorized by the Board of Directors in the specific case, upon receipt of an undertaking
by or on behalf of the director, officer, employee or agent to repay that amount of the advance which exceeds the amount which it is ultimately determined that he is entitled to receive from the Corporation by reason of indemnification as authorized
herein; provided, however, that prior to making any such advance at least one of the following conditions shall have been met: (1) the indemnitee shall provide a security for his undertaking, (2) the Corporation shall be insured against
losses arising by reason of any lawful advances, or (3) a majority of a quorum of the disinterested, non-party directors of the Corporation, or an independent legal counsel in a written opinion, shall
determine, based on a review of readily available facts, that there is reason to believe that the indemnitee ultimately will be found entitled to indemnification.
Nothing in these Articles of Incorporation or in the By-Laws shall be deemed to protect or provide
indemnification to any director or officer of the Corporation against any liability to the Corporation or to its security holders to which he would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office (“disabling conduct”), and the Corporation shall not indemnify any of its officers or directors against any liability to the Corporation or to its security holders unless a
determination shall have been made in the manner provided hereafter that such liability has not arisen from such officer’s or director’s disabling conduct. A determination that an officer or director is entitled to indemnification shall
have been properly made if it is based upon (1) a final decision on the merits by a court or other body before whom the proceeding was brought that the indemnitee was not liable by reason of disabling conduct or, (2) in the absence of such
a decision, a reasonable determination, based upon a review of the facts, that the indemnitee was not liable by reason of disabling conduct, by (a) the vote of a majority of a quorum of directors who are neither “interested persons”
of the Corporation as defined in the Investment Company Act of 1940 nor parties to the proceeding, or (b) an independent legal counsel in a written opinion.
The trustees and officers of the Registrant are covered by Joint errors and omissions insurance policies against liability and expenses of
claims of wrongful acts arising out of their position with the Registrant and other Nuveen funds, subject to such policies’ coverage limits, exclusions and retention.
Section 4 of the Dealer Agreement, to be filed as Exhibit h.2 to this Registration Statement, provides for each of the parties thereto,
including the Registrant and the Agent, to indemnify the others, their trustees, directors, certain of their officers, trustees, directors and persons who control them against certain liabilities in connection with the offering described herein,
including liabilities under the federal securities laws.
Insofar as indemnification for liability arising under the Securities Act of
1933 (the “1933 Act”) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is,
therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue.
Item 31: Business and Other Connections of Investment Adviser and Sub-Adviser.
A description of any other business, profession, vocation or employment of a substantial nature in which the directors and officers of Nuveen
Fund Advisors, LLC (“Nuveen Fund Advisors”), the Fund’s investment adviser, who serve as officers or Directors of the Fund have engaged during the last two years for his or her account or in the capacity of director, officer,
employee, partner or trustee appears under “Management” in the Statement of Additional Information. Such information for the remaining senior officers appears below:
|
|
|
| Name and Position with Nuveen Fund Advisors |
|
Other Business, Profession,
Vocation or
Employment During Past Two Years |
| Oluseun Salami, Executive Vice President and Chief Financial Officer |
|
Senior Vice President (since 2020) NIS/R&T, Inc.; Senior Vice President and Chief Financial Officer, Nuveen Alternative Advisors LLC
(since 2020), Teachers Advisors, LLC (since 2020), TIAA-CREF Asset Management LLC (since 2020) and TIAA-CREF Investment Management, LLC (since 2020); Executive Vice President (since 2022), formerly, Senior Vice President (2020-2022), and Chief
Financial Officer (since 2020), Nuveen, LLC; Executive Vice President and Chief Financial Officer (since 2022), Nuveen Investments, Inc.; Executive Vice President (since 2021), formerly, Senior Vice President, Chief Financial Officer (2018-2021),
Business Finance and Planning (2020) Chief Accounting Officer (2019-2020), Corporate Controller (2018-2020), Teachers Insurance and Annuity Association of America; formerly, Senior Vice President, Corporate Controller, College Retirement
Equities Fund, TIAA Board of Overseers, TIAA Separate Account VA-1, TIAA-CREF Funds, TIAA-CREF Life Funds (2018-2020). |
|
|
| Megan Sendlak, Managing Director and Controller |
|
Managing Director and Controller (since 2020) of Nuveen Alternatives Advisors LLC, Nuveen Asset Management, LLC, Nuveen Investments, Inc., Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC; Managing Director (since
2019) and Controller (since 2020), formerly, Assistant Controller (2019-2020), of Nuveen Securities, LLC; Managing Director and Controller (since 2020), formerly, Vice President and Corporate Accounting Director (2018-2020) of Nuveen, LLC; Managing
Director and Controller (since 2021), formerly, Vice President and Assistant Controller (2019-2021), of NIS/R&T, INC.; formerly, Vice |
|
|
|
| Name and Position with Nuveen Fund Advisors |
|
Other Business, Profession,
Vocation or
Employment During Past Two Years |
|
|
President and Controller of NWQ Investment Management Company, LLC and Santa Barbara Asset Management, LLC (2020-2021); Vice President and Controller of Winslow Capital Management, LLC (since 2020). |
|
|
| Michael A. Perry, President |
|
Chief Executive Officer (since 2023), formerly, Co-Chief Executive Officer (2019-2023), Executive Vice President (2017-2019) and Managing Director (2015-2017) of Nuveen Securities, LLC; and
Executive Vice President (since 2017) of Nuveen Alternative Investments, LLC. |
|
|
| Erik Mogavero, Managing Director and Chief Compliance Officer |
|
Formerly employed by Deutsche Bank (2013- 2017) as Managing Director, Head of Asset Management and Wealth Management Compliance for the
Americas region and Chief Compliance Officer of Deutsche Investment Management Americas. |
Nuveen Asset Management, LLC (“Nuveen Asset Management”) serves as investment sub-adviser to
the Registrant and also serves as investment sub-adviser to other open-end and closed-end funds and investment adviser to
separately managed accounts. The following is a list of the remaining senior officers of Nuveen Asset Management. The principal business address of each person is 333 West Wacker Drive, Chicago, Illinois 60606.
|
|
|
| Name and Position with Nuveen Asset
Management |
|
Other Business, Profession, Vocation or
Employment During Past Two Years |
| William T. Huffman, President |
|
Executive Vice President (since 2020) of Nuveen Securities, LLC and Nuveen, LLC; President, Nuveen Investments, Inc. (since 2020), Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC (since 2019); Senior Managing
Director (since 2019) of Nuveen Alternative Advisors LLC; Senior Managing Director (since 2022) and Chairman (since 2019) of Churchill Asset Management LLC. |
|
|
| Stuart J. Cohen, Managing Director and Head of Legal |
|
Managing Director and Assistant Secretary (since 2002) of Nuveen Securities, LLC; Managing Director (since 2007) and Assistant Secretary
(since 2003) of Nuveen Fund Advisors, LLC; Managing Director, Associate General Counsel and Assistant Secretary (since 2019) of Teachers Advisors, LLC; Managing Director, General Counsel and Assistant Secretary (since 2019) of TIAA-CREF Investment
Management, LLC; Vice President and Assistant Secretary (since 2008) of Winslow Capital Management, LLC; formerly, Vice President (2007-2021) and Assistant Secretary (2003-2021) of NWQ Investment Management Company, LLC; formerly Vice President
(2007-2021) and Assistant Secretary (2006-2021) of Santa Barbara Asset Management, LLC. |
|
|
|
| Name and Position with Nuveen Asset
Management |
|
Other Business, Profession, Vocation or
Employment During Past Two Years |
|
|
| Travis M. Pauley, Managing Director and Chief Compliance Officer |
|
Regional Head of Compliance and Regulatory Legal (2013-2020) of AXA Investment Managers. |
|
|
| Megan Sendlak, Managing Director and Controller |
|
Managing Director and Controller (since 2020) of Nuveen Alternatives Advisors LLC, Nuveen Investments, Inc., Nuveen Fund Advisors, LLC, Teachers Advisors, LLC and TIAA-CREF Investment Management, LLC; Managing Director (since 2019)
and Controller (since 2020), formerly, Assistant Controller (2019-2020), of Nuveen Securities, LLC; Managing Director and Controller (since 2020), formerly, Vice President and Corporate Accounting Director (2018-2020) of Nuveen, LLC; Managing
Director and Controller (since 2021), formerly, Vice President and Assistant Controller (2019-2021), of NIS/R&T, INC., formerly, Vice President and Controller of NWQ Investment Management Company, LLC and Santa Barbara Asset Management, LLC
(2020-2021);Vice President and Controller of Winslow Capital Management, LLC (since 2020). |
Item 32: Location of Accounts and Records.
Nuveen Fund Advisors, 333 West Wacker Drive, Chicago, Illinois 60606, maintains the Articles of
Incorporation, By-Laws, minutes of the directors and shareholders meetings, and contracts of the Registrant and all advisory material of the investment adviser. Nuveen Asset Management in its
capacity as sub-adviser, may also hold certain accounts and records of the Fund.
State Street
Bank and Trust Company, One Congress Street, Suite 1, Boston, Massachusetts 02114-2016, maintains all general and subsidiary ledgers, journals, trial balances, records of all portfolio purchases and sales, and all other required records not
maintained by Nuveen Fund Advisors or Nuveen Asset Management.
Item 33: Management Services.
Not applicable.
Item 34: Undertakings.
| 3. |
The Registrant undertakes: |
a. Not applicable.
b. that, for the purpose of determining any liability under the Securities Act, each post-effective amendment to this
registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of those securities at that time shall be deemed to be the initial bona fide offering thereof;
c. to remove from registration by means of a post-effective amendment any of the securities being registered which remain
unsold at the termination of the offering;
d. that, for the purpose of determining liability under the Securities Act to any
purchaser:
(1) if the Registrant is relying on Rule 430B:
| |
(A) |
Each prospectus filed by the Registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
| |
(B) |
Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (x), or (xi) for the purpose of providing the information required by Section 10(a) of the Securities Act shall be deemed to be part of and
included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is
part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of
sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
|
| |
(2) |
if the Registrant is subject to Rule 430C: each prospectus filed pursuant to Rule 424 under the Securities Act
as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement
as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in this registration
statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
e. that for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial
distribution of securities:
The undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant
pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned
Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to the purchaser:
| |
(1) |
any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be
filed pursuant to Rule 424 under the Securities Act; |
| |
(2) |
free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used
or referred to by the undersigned Registrants; |
| |
(3) |
the portion of any other free writing prospectus or advertisement pursuant to Rule 482 under the
Securities Act relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and |
| |
(4) |
any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
|
| 4. |
The Registrant undertakes that: |
a. for the purpose of determining any liability under the Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 424(b)(1) under the Securities Act shall be deemed to be part of this Registration Statement as of the
time it was declared effective; and
b. for the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide
offering thereof.
| 5. |
The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference into the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| 6. |
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final
adjudication of such issue. |
| 7. |
The Registrant undertakes to send by first class mail or other means designed to ensure equally prompt
delivery, within two business days of receipt of a written or oral request, any prospectus or Statement of Additional Information. |
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in this City of Chicago, and State of Illinois, on the 22nd day of September 2023.
|
|
|
| NUVEEN MUNICIPAL INCOME FUND, INC. |
|
| /s/ MARK L. WINGET |
| Mark L. Winget
Vice President and Secretary |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed
below by the following persons in the capacities and on the date indicated.
|
|
|
|
|
|
|
| Signature |
|
Title |
|
|
|
Date |
|
|
|
|
| /S/ E. SCOTT WICKERHAM
E. SCOTT WICKERHAM |
|
Vice President and Controller (principal financial and accounting officer) |
|
|
|
September 22, 2023 |
|
|
|
|
| /S/ DAVID J. LAMB
DAVID J. LAMB |
|
Chief Administrative Officer (principal executive officer) |
|
|
|
September 22, 2023 |
|
|
|
|
| TERENCE J. TOTH* |
|
Chairman of the Board and Trustee |
|
|
|
|
|
|
|
|
| JACK B. EVANS* |
|
Trustee |
|
By*: |
|
/s/ MARK L. WINGET
Mark L. Winget Attorney-in-Fact September 22, 2023 |
| WILLIAM C. HUNTER* |
|
Trustee |
|
|
| ALBIN F. MOSCHNER* |
|
Trustee |
|
|
|
|
|
|
| AMY B.R. LANCELLOTTA* |
|
Trustee |
|
|
|
|
|
|
|
|
| JOANNE T. MEDERO* |
|
Trustee |
|
|
|
|
|
|
|
|
| JOHN K. NELSON* |
|
Trustee |
|
|
|
|
|
|
|
|
| MATTHEW THORNTON III* |
|
Trustee |
|
|
|
|
|
|
|
|
| MARGARET L. WOLFF* |
|
Trustee |
|
|
|
|
|
|
|
|
| ROBERT L. YOUNG* |
|
Trustee |
|
|
|
|
|
|
|
| By*: |
|
/s/ MARK L. WINGET |
|
|
Mark L. Winget |
|
|
Attorney-in-Fact |
|
|
September 22, 2023 |
| * |
The powers of attorney authorizing Mark L. Winget, among others, to execute this Registration Statement, and
Amendments thereto, for the Trustees of the Registrant on whose behalf this Registration Statement is filed, have been executed and filed as
Exhibit (t) and incorporated herein by reference. |
EXHIBIT INDEX
EX-FILING FEES
Calculation of Filing Fee Tables
Form N-2
(Form Type)
Nuveen Municipal
Income Fund, Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered and Carry Forward Securities
|
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Security
Type |
|
Security
Class Title |
|
Fee
Calculation or Carry
Forward
Rule |
|
Amount
Registered |
|
Proposed
Maximum Offering
Price Per
Unit |
|
Maximum
Aggregate Offering
Price (1) |
|
Fee
Rate |
|
Amount of
Registration Fee |
|
Carry
Forward Form
Type |
|
Carry
Forward File
Number |
|
Carry
Forward Initial
effective date |
|
Filing Fee
Previously Paid In
Connection with
Unsold
Securities to be
Carried Forward |
| |
| Newly Registered Securities |
| |
|
|
|
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|
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|
|
| Fees to Be
Paid |
|
Equity |
|
Common Shares |
|
Rule 457(o) |
|
— |
|
— |
|
$1,000,000 |
|
$110.20 |
|
$110.20 |
|
— |
|
— |
|
— |
|
— |
| |
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| Fees
Previously Paid |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| |
| Carry Forward Securities |
| |
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| Carry
Forward Securities |
|
— |
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— |
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— |
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— |
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— |
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— |
|
— |
|
— |
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— |
|
— |
|
— |
|
— |
| |
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| |
|
Total Offering Amounts |
|
|
|
$1,000,000 |
|
|
|
$110.20 |
|
|
|
|
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|
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| |
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| |
|
Total Fees Previously Paid |
|
|
|
|
|
|
|
$0.00 |
|
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| |
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| |
|
Total Fee Offsets |
|
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|
$0.00 |
|
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| |
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| |
|
Net Fee Due |
|
|
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|
$110.20 |
|
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| (1) |
Estimated pursuant to Rule 457(o) under the Securities Act of 1933, as amended, solely for the purpose of
determining the registration fee. |
Nuveen Muni Income (NYSE:NMI)
Historical Stock Chart
Von Jan 2025 bis Feb 2025
Nuveen Muni Income (NYSE:NMI)
Historical Stock Chart
Von Feb 2024 bis Feb 2025
