Fort Dearborn Income Securities, Inc. (NYSE: FDI) (the “Fund”) announced today that the Board of Directors of the Fund approved permitting the Fund to invest up to 15% of the Fund’s net assets in non-investment grade debt, effective on or about January 1, 2011. UBS Global Asset Management (Americas) Inc. (“UBS Global AM”) does not intend to significantly change how the Fund has been managed. Rather, it is seeking to grow the breadth of the Fund’s investable universe by increasing the Fund’s permitted investments in non-investment grade debt to up to 15% of the Fund’s net assets. The investment in non-investment grade debt will be utilized as an opportunistic allocation at times when the fixed income portfolio team views the sector to be attractive. UBS Global AM believes that permitting the Fund to selectively add to certain attractive non-investment grade debt securities may help the Fund to improve its overall total return. There are risks involved in investing in non-investment grade debt, including the following: The risk that the issuer of bonds with ratings of BB (S&P) or Ba (Moody’s) or below, or deemed of equivalent quality, will default or otherwise be unable to honor a financial obligation. These securities are considered to be predominately speculative with respect to an issuer’s capacity to pay interest and repay principal in accordance with the terms of the obligations. Lower-quality bonds are more likely to be subject to an issuer’s default or downgrade than investment grade (higher-quality) bonds. Fort Dearborn Income Securities, Inc. is a closed-end bond fund managed by UBS Global AM. The Fund invests principally in investment grade, long-term, fixed income debt securities. The primary objective of the Fund is to provide its shareholders with:
- A stable stream of current income consistent with external interest rate conditions, and
- A total return over time that is above what they could receive by investing individually in the investment grade and long-term maturity sectors of the bond market.