Putnam Looks to Merge Closed-End Muni Bond Funds

Putnam Investments wants to merge two closed-end municipal bond funds into open-end funds with similar investment strategies.

The plans call for the merger of the $67 million (PCA Quote) Putnam California Investment Grade Municipal Trust into the $2.08 billion (PCTEX Quote) Putnam California Tax Exempt Income Fund, while the $38 million (PMN Quote)Putnam New York Investment Grade Municipal Trust would be merged into the $1.16 billion (PTEIX Quote) Putnam New York Tax Exempt Income Fund.

In the case of Putnam California Invesment Grade Municipal Trust, the proposed merger is at least partly in response to an attempt by a shareholder, the Mildred B. Horejsi Trust, to gain control of the closed-end fund and fire Putnam as an investment manager. On Jan. 22, the trust announced a tender offer for the fund's outstanding common shares of $14.16 a share. ...