DWS Municipal Income Trust (NYSE: KTF)
DWS Strategic Municipal Income Trust (NYSE: KSM)
(each, a “Fund,” and together, the “Funds”) each announced that all conditions to the closing of its tender offer for up to 100% of its outstanding original preferred shares have been satisfied. Each tender offer expired at 5:00 p.m. New York City time on November 16, 2012. KTF has accepted for payment a total of 37,773 of its remarketed preferred shares (approximately 95.0% of its outstanding remarketed preferred shares), and KSM has accepted for payment a total of 2,419 of its auction rate preferred shares (approximately 86.4% of its outstanding auction rate preferred shares). The original preferred shares of each Fund that were not tendered remain outstanding.
Each Fund also announced that it has successfully issued floating rate municipal term preferred shares (“MTPS”) in a private offering. KTF has issued 37,773 shares of MTPS totaling $188,865,000, and KSM has issued 2,419 shares of MTPS totaling $60,475,000. Each Fund used the proceeds from its MPTS offering to pay for the preferred shares that it accepted in its tender offer. KTF had offered to purchase up to 100% of its outstanding remarketed preferred shares at a price equal to 96% of the remarketed preferred shares’ per share liquidation preference of $5,000 ($4,800 per remarketed preferred share) plus any unpaid dividends accrued through the tender offer expiration date. KSM had offered to purchase up to 100% of its outstanding auction rate preferred shares at a price equal to 96% of the auction rate preferred shares’ per share liquidation preference of $25,000 ($24,000 per auction rate preferred share) plus any unpaid dividends accrued through the tender offer expiration date. As a result of its preferred share tender offer and corresponding MTPS issuance, each Fund’s leverage amount remains unchanged.
MTPS are a floating rate form of preferred shares with a mandatory-term redemption date of December 1, 2015, unless extended, and dividends that are set weekly to a fixed spread against the Securities Industry and Financial Markets Association Municipal Swap Index. Each Fund’s MTPS rank on parity with those of its original preferred shares that remain outstanding after its tender offer. MTPS are senior in priority to each Fund’s outstanding common shares as to payments of dividends.