Nuveen Investments, a leading global provider of investment services to institutions and high-net-worth investors, today announced that, after an extensive independent review, the Board of each of the closed-end funds identified below has rejected the demands contained in demand letters received by each fund related to the refinancing and/or redemption of its Auction Rate Preferred Shares (ARPS).
As previously announced on April 26, 2010, 26 Nuveen leveraged closed-end funds each received a demand letter from a law firm on behalf of purported holders of the funds’ common shares. Each letter alleged that the fund’s Adviser (Nuveen Asset Management) as well as the fund’s Officers and Directors breached their fiduciary duties by favoring the interests of ARPS shareholders over those of common shareholders in connection with each fund’s ARPS refinancing and/or redemption activities, and demanded that the Board take action to remedy those alleged breaches. Subsequently, four additional funds each received a similar demand letter from the same law firm.
In response to each of the demand letters, the funds’ Board established a Demand Committee of certain of its disinterested and independent Directors to investigate the claims made in the demand letters and to report to the full Board its findings and recommendation. The Demand Committee retained independent counsel to assist it in conducting an extensive investigation of the claims made in the demand letters. Based upon its investigation, the Demand Committee found that it is not in the best interests of the funds or its shareholders to take the actions suggested in the demand letters, and recommended that the full Board reject the demands made in the demand letters. After reviewing the findings and recommendation of the Demand Committee, the full Board for each fund unanimously adopted the Committee’s recommendation.
In light of the Board’s actions, the Board has resumed consideration of additional ARPS refinancings. Any future determinations by the Board to refinance a specific fund’s ARPS will continue to be based upon a review of the fund’s specific circumstances, considering, among other factors, the availability and terms of potential alternative sources of leverage, the receipt of applicable ratings and other necessary approvals for such alternative sources of leverage, and overall market conditions.