Nuveen Investments, a leading global provider of investment services to institutions and high-net-worth investors, today provided an overview of its progress in refinancing auction-rate preferred shares (ARPS) issued by its closed-end funds (CEFs). The firm highlighted the recent launch of Variable Rate Demand Preferred (VRDP) shares to replace ARPS of four different municipal bond CEFs, and noted that tender option bonds (TOBs) continue to serve as an important refinancing tool for municipal funds. The company also revised the expected timing for refinancing ARPS of four taxable closed-end funds and scheduled a conference call on ARPS for Wednesday, August 13 at 9:30 a.m., Central Time.

“We continue to advance our goals to lower the relative cost of leverage over time for our funds and provide liquidity at par for preferred shareholders,” said Bill Adams, Executive Vice President, Nuveen Investments. “While we are pleased to be making steady progress, we share the sense of urgency felt by many investors and recognize that much work remains to be done. One of the most encouraging developments to date has been the successful issuance of the first Variable Rate Demand Preferred Shares. As we announced early on, we believe this new security will be a critical element for being able to address the industry’s ARPS refinancing challenge.”

Nuveen Investments sponsors 120 closed-end funds, of which 100 have outstanding auction-rate securities. As of today, $1.7 billion of ARPS, or approximately 40% of the $4.3 billion originally outstanding FundPreferred shares issued by Nuveen’s taxable CEFs, have been redeemed. Four more Nuveen taxable CEFs expect to redeem an additional aggregate amount of $920 million of ARPS as discussed below. As also discussed below, $1.5 billion of ARPS, or approximately 14% of the $11.1 billion originally outstanding MuniPreferred shares issued by Nuveen’s municipal CEFs, have been or are in the process of being redeemed, in part with proceeds from the successful issuance of VRDP. Nuveen has also arranged for a liquidity facility to support the issuance of additional VRDP to refinance an additional $1.25 billion of ARPS.

Posted: 08|13|08 at 9:43 am. Filed under: News.