Nuveen Investments, a leading global provider of investment services to institutions as well as individual investors, today announced that two municipal bond closed-end funds have issued Variable Rate Demand Preferred (VRDP) shares through private placements with qualified institutional buyers, as defined pursuant to Rule 144A under the Securities Act of 1933. The proceeds of the issuance will be used to redeem all of the outstanding MuniFund Term Preferred (MTP) shares of each of the funds as previously announced. In addition, as previously announced, one of the funds will redeem all of its outstanding Variable Rate MuniFund Term Preferred (VMTP) shares.
VRDP issuance details are as follow:
VRDP Issuance Amount ($mm)
|Nuveen Ohio Quality Income Municipal Fund||NUO||Series 1||1,480||$148.000||Royal Bank of Canada|
|Nuveen California Dividend Advantage Municipal Fund 3||NZH||Series 1||1,600||$160.000||Barclays Bank PLC|
VRDP shares include a liquidity feature that allows holders of VRDP to have their shares purchased by a liquidity provider in the event that sell orders have not been matched with purchase orders and successfully settled in a remarketing. These VRDP shares qualify as equity for income tax purposes. This affords VRDP share dividends the same tax treatment as the income on the fund’s underlying investments, notwithstanding VRDP terms that require the fund to redeem VRDP shares still owned by the liquidity provider if there are six months of continuous, unsuccessful remarketing.