Update on Leverage Refinancing Plans for DWS Municipal Income Trust and DWS Strategic Municipal Income Trust
August 24 2020 - 5:00PM
Business Wire
DWS Municipal Income Trust (NYSE: KTF) and DWS Strategic
Municipal Income Trust (NYSE: KSM) (each, a “Fund,” and
together, the “Funds”) announced today a new refinancing plan that
is expected to result in the outstanding leverage remaining
unchanged for each Fund. Pursuant to the new refinancing plan, each
Fund intends to redeem all of its currently outstanding Floating
Rate Municipal Term Preferred Shares, Series 2018 (the “Series 2018
MTPS”). The redemption of each Fund’s Series 2018 MTPS will be
conditioned on the receipt of proceeds from the issuance of new
preferred shares in an amount equal to the aggregate liquidation
preference of the Series 2018 MTPS. The Series 2018 MTPS of each
Fund will be redeemed at its liquidation preference per share plus
an amount equal to any unpaid dividends and other distributions on
such share accumulated from and including the Series original issue
date to (but excluding) the optional redemption date for such
Series.
To facilitate the implementation of the new refinancing plan,
effective as of today, the terms of the Series 2018 MTPS have been
modified to (i) extend the Series 2018 MTPS term redemption date to
June 1, 2021, and (ii) permit the Funds, at any time after
September 1, 2020, to redeem the Series 2018 MTPS with the proceeds
of new leverage. In connection with these changes, effective
September 3, 2020, the current Series 2018 MTPS dividend rate of
the SIFMA Municipal Swap Index (the “SIFMA Index”) plus 1.00% will
increase to the SIFMA Index plus 1.75%. DWS Investment Management
Americas, Inc. and/or its affiliates, and not the Funds, will bear
the cost of this incremental increase in the Series 2018 MTPS
dividend rate. Except for the above-described changes and certain
related technical amendments, the material terms, rights and
preferences of each Fund’s Series 2018 MTPS remain the same. The
aggregate Series 2018 MTPS liquidation preference for KTF remains
at $198,750,000, and the aggregate Series 2018 MTPS liquidation
preference for KSM remains at $70,000,000.
For more information on the Funds, visit dws.com or call (800)
349-4281.
IMPORTANT INFORMATION
DWS Municipal Income Trust. Bond investments are subject to
interest-rate, credit, liquidity and market risks to varying
degrees. When interest rates rise, bond prices generally fall.
Credit risk refers to the ability of an issuer to make timely
payments of principal and interest. Investing in derivatives
entails special risks relating to liquidity, leverage and credit
that may reduce returns and/or increase volatility. Leverage
results in additional risks and can magnify the effect of any gains
or losses. Although the fund seeks income that is exempt from
federal income taxes, a portion of the fund’s distributions may be
subject to federal, state and local taxes, including the
alternative minimum tax.
DWS Strategic Municipal Income Trust. Bond investments are
subject to interest-rate, credit, liquidity and market risks to
varying degrees. When interest rates rise, bond prices generally
fall. Credit risk refers to the ability of an issuer to make timely
payments of principal and interest. Investing in derivatives
entails special risks relating to liquidity, leverage and credit
that may reduce returns and/or increase volatility. Leverage
results in additional risks and can magnify the effect of any gains
or losses. Although the fund seeks income that is exempt from
federal income taxes, a portion of the fund’s distributions may be
subject to federal, state and local taxes, including the
alternative minimum tax.
Closed-end funds, unlike open-end funds, are not continuously
offered. There is a one-time public offering and once issued,
shares of closed-end funds are bought and sold in the open market
through a stock exchange. Shares of closed-end funds frequently
trade at a discount to their net asset value. The price of a fund’s
shares is determined by a number of factors, several of which are
beyond the control of the fund. Therefore, the fund cannot predict
whether its shares will trade at, below or above net asset
value.
Past performance is no guarantee of future results.
This press release shall not constitute an offer to sell or a
solicitation to buy, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer or
solicitation or sale would be unlawful prior to registration or
qualification under the laws of such state or jurisdiction.
Certain statements contained in this release may be
forward-looking in nature. These include all statements relating to
plans, expectations, and other statements that are not historical
facts and typically use words like “expect,” “anticipate,”
“believe,” “intend,” and similar expressions. Such statements
represent management’s current beliefs, based upon information
available at the time the statements are made, with regard to the
matters addressed. All forward-looking statements are subject to
risks and uncertainties that could cause actual results to differ
materially from those expressed in, or implied by, such statements.
Management does not undertake any obligation to update or revise
any forward-looking statements, whether as a result of new
information, future events, or otherwise. The following factors,
among others, could cause actual results to differ materially from
forward-looking statements: (i) the effects of adverse changes in
market and economic conditions; (ii) legal and regulatory
developments; and (iii) other additional risks and uncertainties,
including public health crises (including the recent pandemic
spread of the novel coronavirus), war, terrorism, trade disputes
and related geopolitical events.
NOT FDIC/ NCUA INSURED • MAY LOSE VALUE • NO
BANK GUARANTEE NOT A DEPOSIT • NOT INSURED BY ANY FEDERAL
GOVERNMENT AGENCY
DWS Distributors, Inc. 222 South Riverside Plaza Chicago,
IL 60606-5808 www.dws.com Tel (800) 621-1148 © 2020 DWS Group GmbH
& Co. KGaA. All rights reserved
The brand DWS represents DWS Group GmbH & Co. KGaA and any
of its subsidiaries such as DWS Distributors, Inc. which offers
investment products or DWS Investment Management Americas, Inc. and
RREEF America L.L.C. which offer advisory services. (R-077913-1)
(08/20)
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version on businesswire.com: https://www.businesswire.com/news/home/20200824005614/en/
For additional information:
DWS Press Office (212) 454-4500 Shareholder Account
Information (800) 294-4366 DWS Closed-End Funds (800)
349-4281
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