Two Nuveen Closed-End Funds Announce Pricing and Placement of $741 Million Private Offering of VRDP
December 28 2010 - 4:42PM
Business Wire
Nuveen Investments, a leading global provider of investment
services to institutions and high-net-worth investors, today
announced that the Nuveen Insured Municipal Opportunity Fund, Inc.
(NYSE: NIO) and Nuveen Insured California Premium Income Municipal
Fund 2, Inc. (NYSE: NCL) have completed private offerings of
Variable Rate Demand Preferred (VRDP) shares placed with qualified
institutional buyers of $667.2 million and $74 million
respectively, as defined pursuant to Rule 144A under the Securities
Act of 1933.
The proceeds from each offering will be used to redeem at par
all of the funds’ outstanding auction-rate preferred shares (ARPS).
The funds’ Board of Trustees has approved each redemption, which
total more than $738 million. Each refinancing is expected to lower
the relative costs of leverage for the funds over time while also
providing liquidity at par for the holders the funds’ ARPS.
VRDP shares include a liquidity feature that allows holders of
VRDP to have their shares purchased by a liquidity provider in the
event that sell orders have not been matched with purchase orders
and successfully settled in a remarketing. The liquidity feature
for these funds’ VRDP is being provided by Citibank, N.A. The VRDP
shares comply with the requirements of IRS Notice 2008-55, as
extended by IRS Notice 2010-03, and qualify as equity for income
tax purposes. This affords VRDP share dividends the same tax
treatment as the income on the fund’s underlying investments,
notwithstanding VRDP terms that require the fund to redeem VRDP
shares still owned by the liquidity provider if there are six
months of continuous, unsuccessful remarketing.
VRDP dividends will be set weekly at a rate established by
Citigroup Global Markets Inc. as remarketing agent, subject to a
maximum rate which will increase over time in the event of an
extended period of unsuccessful remarketing.
This notice is being provided pursuant to Regulation FD (Fair
Disclosure) to ensure that the fund’s common and preferred
shareholders have been informed of the fund’s issuance of VRDP and
its intention to redeem its outstanding ARPS, which may not occur
as scheduled.
No VRDP shares have been registered under the Securities Act of
1933 (the Securities Act) or any state securities laws. Unless so
registered, no VRDP shares may be offered or sold in the United
States except pursuant to an exemption from the registration
requirements of the Securities Act and applicable state securities
laws. This press release is neither an offer to sell nor a
solicitation of an offer to buy any of these securities.
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.
FORWARD LOOKING STATEMENTS
Certain statements made in this release are forward-looking
statements. Actual future results or occurrences may differ
significantly from those anticipated in any forward-looking
statements due to numerous factors. These include, but are not
limited to:
- market developments;
- legal and regulatory developments;
and
- other additional risks and
uncertainties.
Nuveen and the closed-end funds managed by Nuveen and its
affiliates undertake no responsibility to update publicly or revise
any forward-looking statements.
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