Two Nuveen Closed-End Funds Announce Actions Regarding MuniFund Term Preferred Shares
Nuveen Investments, a leading global provider of investment services to institutions as well as high-net-worth and affluent investors, today announced that the Nuveen Ohio Dividend Advantage Municipal Fund (AMEX: NXI) called for redemption at par all of its outstanding auction-rate preferred securities (ARPS). The fund’s Board of Trustees has approved this redemption, which totals $12.5 million and will be funded by proceeds received from the issuance of MuniFund Term Preferred Shares (MTP).
NXI is redeeming all of its $12.5 million of currently outstanding ARPS.
|Total Shares||Total Amount||Redemption|
|W||67070C206||500||$12,500,000||April 12, 2011|
Additionally, the Nuveen New Jersey Dividend Advantage Municipal Fund (AMEX: NXJ) has successfully completed the public offering of $44.861 million of MuniFund Term Preferred Shares (MTP). The net proceeds from this offering of MTP shares will be used to refinance all of the fund’s outstanding auction-rate preferred securities (ARPS). MTP shares are expected to trade on the New York Stock Exchange (NYSE) within 30 days of original issuance under the symbol NXJ PrA.
MTP is a fixed rate form of preferred stock with a mandatory redemption period, in the case of the NXJ offering, of three years. By issuing MTP, the fund seeks to take advantage of the current historically low interest rate environment to lock in an attractive tax-exempt cost of leverage for a period as long as the term of the MTP. Issuing MTP helps the fund mitigate the risk of a significant increase in the cost of leverage should short-term interest rates rise.
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