DWS Municipal Income Trust and DWS Strategic Municipal Income Trust Announce Completion of Preferred Shares Refinancing
November 10 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”) each announced today the completion of the
issuance of a new series of Variable Rate MuniFund Term Preferred
Shares, Series 2020-1 (“Series 2020-1 VMTPS”) in a private
offering. KTF issued 3,975 shares of Series 2020-1 VMTPS with an
aggregate liquidation preference of $198,750,000, and KSM issued
700 shares of Series 2020-1 VMTPS with an aggregate liquidation
preference of $70,000,000. Each Fund used the proceeds from the
sale of its Series 2020-1 VMTPS to fund the redemption of all of
its outstanding Floating Rate Municipal Term Preferred Shares,
Series 2018 (“Series 2018 MTPS”). Each Fund’s Series 2018 MTPS was
redeemed at its liquidation preference per share plus unpaid
dividends accumulated from the original issue date to, but
excluding, the redemption date. As a result of its Series 2020-1
VMTPS issuance and the redemption of its outstanding Series 2018
MTPS, each Fund’s leverage attributable to preferred shares remains
unchanged.
The Series 2020-1 VMTPS are variable rate preferred shares with
a stated maturity of November 10, 2049 and an early termination
date tied to a rate period termination date (the “Rate Period
Termination Date”), which initially will be 36 months from the date
of original issuance. Absent an agreement with the holder(s) of the
Series 2020-1 VMTPS to extend the original 36 month period and
retain the Series 2020-1 VMTPS on the same or new terms, the Series
2020-1 VMTPS are subject to mandatory redemption six months after
the Rate Period Termination Date, unless earlier refinanced or
remarketed to another party. Series 2020-1 VMTPS dividends are set
weekly at a fixed spread (dependent on the then current ratings of
the Series 2020-1 VMTPS) over the Securities Industry and Financial
Markets Association Municipal Swap Index. The Series 2020-1 VMTPS
of each Fund rank senior in priority to its outstanding common
shares as to payments of dividends and distributions upon
liquidation.
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. Municipal securities are
subject to the risk that litigation, legislation or other political
events, local business or economic conditions or the bankruptcy of
the issuer could have a significant effect on an issuer’s ability
to make payments of principal and/or interest. The market for
municipal bonds may be less liquid than for taxable bonds and there
may be less information available on the financial condition of
issuers of municipal securities than for public corporations.
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. Municipal securities are
subject to the risk that litigation, legislation or other political
events, local business or economic conditions or the bankruptcy of
the issuer could have a significant effect on an issuer’s ability
to make payments of principal and/or interest. The market for
municipal bonds may be less liquid than for taxable bonds and there
may be less information available on the financial condition of
issuers of municipal securities than for public corporations.
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 the 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.
“War, terrorism, economic uncertainty, trade disputes, public
health crises (including the recent pandemic spread of the novel
coronavirus) and related geopolitical events could lead to
increased market volatility, disruption to US and world economies
and markets and may have significant adverse effects on the fund
and their investments.”
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-079560-1)
(11/20)
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version on businesswire.com: https://www.businesswire.com/news/home/20201110006029/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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