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 California Dividend Advantage Municipal Fund 3 (AMEX: NZH) has successfully completed the public offering of $44 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 NZH PrB.
Additionally, the fund has called for redemption at par all of its outstanding auction-rate preferred securities. This redemption will be funded by the above-mentioned proceeds received from the issuance of MuniFund Term Preferred Shares (MTP).
NZH is redeeming all of its $43.175 million of currently outstanding ARPS.
Total Shares Redeemed
Total Amount Redeemed
|M||67070Y307||863||$21,575,000||June 30, 2011|
|TH||67070Y208||864||$21,600,000||June 29, 2011|
MTP is a fixed rate form of preferred stock with a mandatory redemption period, in the case of this 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 its cost of leverage should short-term interest rates rise.