On Thursday, February 21, 2013, the Board of Directors of Dreyfus Municipal Income, Inc. (NYX: DMF) today authorized the Fund to redeem up to an additional 25 percent of the Fund’s original amount of outstanding auction rate preferred stock (“ARPS”), subject to market, regulatory and other conditions and factors. It is currently anticipated that, upon redemption, the leverage provided by the ARPS would be replaced through the creation of tender option bonds (“TOBs”). The timing and amount for such redemptions and refinancing of the ARPS could occur within approximately a 12-month period, but will be determined by the availability of acceptable terms on the TOBs, market, regulatory and other factors, and Fund management is not certain when, or if, such amount will be redeemed and refinanced. Before any such redemption of the ARPS, the Fund would issue a notice containing specific details regarding the redemption , which would include a press release that also would be placed on the Dreyfus website.
The ability of the Fund to utilize TOBs is based, in part, on the eligibility of its underlying municipal bonds for TOB programs. The extent to which the Fund is able to use TOBs to redeem ARPS depends on market conditions, the Fund’s portfolio composition, the cost of liquidity and the willingness of liquidity providers to support TOBs, among other factors. The TOB structure is less permanent than ARPS since TOBs may be unwound upon the occurrence of certain events, such as a failed remarketing of the TOB securities, and there is no certainty that TOB financing will be available in the future.
In November 2009, the Board authorized an initial redemption of up to 25 percent of the Fund’s then-outstanding ARPS, subject to market, regulatory, timing and other conditions and factors. The Fund subsequently redeemed that amount of ARPS in stages and the leverage provided by the redeemed ARPS was replaced through the creation of TOBs.