BlackRock, Inc. today announced that its Closed-End Fund Board
of Directors/Trustees (the “Board”) has recently approved changes
to certain non-fundamental investment policies for each of
BlackRock Preferred Income Strategies Fund (NYSE: PSY), BlackRock
Preferred & Corporate Income Strategies Fund (NYSE: PSW),
BlackRock Preferred Opportunity Trust (NYSE: BPP) and BlackRock
Preferred & Equity Advantage Trust (NYSE: BTZ) (collectively,
the “Funds”). As a result of these policy changes, the Funds will
no longer focus their investments primarily on preferred
securities. Instead, each Fund will transition into portfolios
investing in a broader spectrum of securities across the capital
structure. With regard to BTZ, the Fund will no longer invest a
substantial portion of its assets in equity securities, nor will it
utilize an option-writing strategy.
The Funds’ current and amended non-fundamental policies are as
follows:
Non-Fundamental Investment Policy with Respect to
Preferred Securities Ticker Current
Amended (same for all Funds) PSY Under normal market
conditions, at least 80% of the Fund’s total assets will be
invested in preferred securities. Under normal market
conditions, at least 80% of the Fund’s total assets will be
invested in credit-related securities, including, but not limited
to, investment grade corporate bonds, high yield bonds, bank loans,
preferred securities or convertible bonds or derivatives with
economic characteristics similar to these credit-related
securities. PSW Under normal market conditions, at least 80%
of the Fund’s total assets will be invested in a portfolio of
preferred securities and corporate debt securities. Under normal
market conditions, the Fund will invest at least 65% of its total
assets in preferred securities and may invest up to 35% of its
total assets in debt securities. BPP Under normal market
conditions, at least 80% of the Fund’s total assets will be
invested in preferred securities. BTZ Under normal market
conditions, at least 80% of the Fund’s total assets will be
invested in preferred and equity securities and derivatives with
economic characteristics similar to individual or groups of equity
securities.
The Board has taken these actions in response to BlackRock’s
perception of the current and prospective market environment for
preferred securities, including recent changes to the criteria that
govern the ratings of the Funds’ preferred shares. BlackRock and
the Board believe the amended policies will better position the
Funds to achieve their investment objectives and are in the best
interests of the Funds’ shareholders. The approved changes will not
alter any Fund’s investment objective and each Fund will continue
to be managed in accordance with its investment objectives.
In addition to the foregoing, the Board also approved changes to
each Fund’s restriction on credit quality of eligible investments.
Previously, each Fund was restricted to investing, under normal
market conditions, no more than 20% of its total assets in
securities rated below investment grade at the time of purchase.
The amended policy allows each Fund to invest, under normal market
conditions, without limitation in securities rated below investment
grade at the time of purchase. While this policy affords the Funds
additional flexibility to invest in securities rated below
investment grade at time of purchase, it is anticipated, under
current market conditions, that each of the Funds will have an
average credit quality of at least investment grade.
As disclosed in its prospectus, each Fund is required to provide
shareholders 60 days notice of a change to its current
non-fundamental policy with respect to investing in preferred
securities. Accordingly, a notice describing the changes discussed
above will be mailed to shareholders of record as of September 4,
2009. Following the prescribed 60-day notice period, BlackRock
anticipates that it will gradually reposition the Funds’ portfolios
over time, and that during such period, each Fund may continue to
hold a substantial portion of its assets in preferred securities.
The notice will also generally describe certain risks relating to
each Fund’s new investment policy. At this time, it is uncertain
how long the repositioning may take, and the Funds may continue to
be subject to risks associated with investing a substantial portion
of their assets in preferred securities until the repositioning is
complete. No action is required by shareholders of the Funds in
connection with this change.
In connection with this change in non-fundamental policy, each
of the Funds will undergo a name change to reflect its new
portfolio characteristics. The new names of the Funds will be
announced at or prior to the expiration of the 60-day notice
period. Each Fund will continue to trade on New York Stock Exchange
under its current ticker symbol.
About BlackRock
BlackRock is one of the world’s largest publicly traded
investment management firms. At June 30, 2009, BlackRock’s assets
under management were $1.373 trillion. The firm manages assets on
behalf of institutions and individuals worldwide through a variety
of equity, fixed income, cash management and alternative investment
products. In addition, a growing number of institutional investors
use BlackRock Solutions® investment system, risk management and
financial advisory services. The firm is headquartered in New York
City and has employees in 21 countries throughout the U.S., Europe
and Asia Pacific. For additional information, please visit the
firm's website at www.blackrock.com.
Forward-Looking Statements
This press release, and other statements that BlackRock may
make, may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act, with respect to
BlackRock’s future financial or business performance, strategies or
expectations. Forward-looking statements are typically identified
by words or phrases such as “trend,” “potential,” “opportunity,”
“pipeline,” “believe,” “comfortable,” “expect,” “anticipate,”
“current,” “intention,” “estimate,” “position,” “assume,”
“outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,”
“achieve,” and similar expressions, or future or conditional verbs
such as “will,” “would,” “should,” “could,” “may” or similar
expressions.
BlackRock cautions that forward-looking statements are subject
to numerous assumptions, risks and uncertainties, which change over
time. Forward-looking statements speak only as of the date they are
made, and BlackRock assumes no duty to and does not undertake to
update forward-looking statements. Actual results could differ
materially from those anticipated in forward-looking statements and
future results could differ materially from historical
performance.
With respect to each Fund, the following factors, among others,
could cause actual events to differ materially from forward-looking
statements or historical performance: (1) changes in political,
economic or industry conditions, the interest rate environment or
financial and capital markets, which could result in changes in the
Fund’s net asset value; (2) the performance of the Fund’s
investments; (3) the impact of increased competition; (4) the
extent and timing of any distributions or share repurchases; (5)
the impact of legislative and regulatory actions and reforms and
regulatory, supervisory or enforcement actions of government
agencies relating to the Fund or BlackRock, as applicable; (6)
BlackRock’s ability to attract and retain highly talented
professionals; and (7) the impact of legislative and regulatory
actions and reforms and regulatory, supervisory or enforcement
actions of government agencies relating to BlackRock, Barclays PLC,
Bank of America, Merrill Lynch or PNC.
The Annual and Semi-Annual Reports and other regulatory filings
of the Funds with the SEC are accessible on the SEC's website at
www.sec.gov and on BlackRock’s website at
www.blackrock.com, and may discuss these or other factors
that affect the Funds. The information contained on our website is
not a part of this press release.
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