Nuveen Dividend Advantage Municipal Fund 3 Issues At-Par Redemption Notice For Auction-Rate Preferred Securities

Nuveen Investments, a leading global provider of investment services to institutions and high-net-worth investors, today announced that the Nuveen Dividend Advantage Municipal Fund 3 (AMEX: NZF) has called for redemption at par a portion of its outstanding auction-rate preferred securities. This redemption will be funded by proceeds received from the issuance of MuniFund Term Preferred Shares (MTP).

NZF is redeeming $4.925 million of its $173.325 million of currently outstanding ARPS.
Series   Cusip #  

Total SharesRedeemed
 

Total AmountRedeemed
  RedemptionDate
W   67070X200   65   $1,625.000   January 18, 2011
TH   67070X309   66   $1,650,000   January 19, 2011
F   67070X408   66   $1,650,000   January 20, 2011
       

MTP is a fixed rate form of preferred stock with a mandatory redemption period, in the case of this offering, of five years. By issuing MTP, the fund seeks to take advantage of the current historically low interest rate environment to lock in an attractive tax-exempt cost of leverage for a period as long as the term of the MTP. Issuing MTP helps the fund mitigate the risk of a significant increase in its cost of leverage should short-term interest rates rise.

Investors should consider the investment objectives and policies, risk considerations, charges and expenses of the fund carefully before investing. For a prospectus which contains this and other information relevant to an investment in MTP shares of the fund, please contact your securities representative or Nuveen Investments, LLC, 333 W. Wacker Drive, Chicago, IL 60606 or www.nuveen.com/cef . Investors should read the prospectus carefully before they invest or send money.

This document is not an offer to sell this security and is not soliciting an offer to buy this security in any state where the offer or sale is not permitted.

For more information about Nuveen closed-end funds, visit www.nuveen.com/cef. ARPS information and updates are posted on Nuveen’s auction-rate preferred resource center at www.nuveen.com/arps.

Nuveen Investments provides high quality investment services designed to help secure the long-term goals of institutions and high net worth investors as well as the consultants and financial advisors who serve them. Nuveen Investments markets its growing range of specialized investment solutions under the high-quality brands of NWQ, Nuveen, Santa Barbara, Symphony, Tradewinds, Winslow Capital and Nuveen HydePark. In total, the Company managed nearly $163 billion as of September 30, 2010. For more information, please visit the Nuveen Investments website at www.nuveen.com.

Copyright Business Wire 2010

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