By Susanna Moon
Chicago, Dec. 23 - Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund issued $45.4 million of variable-rate municipal term preferred shares in a private offering to fund the tender offer for its auction market preferred shares.
The Municipal Income Fund issued 1,080 preferreds for proceeds of $27.0 million and the Intermediate Municipal Income Fund issued 737 preferreds for proceeds of $18.4 million.
The floating-rate preferreds have a mandatory-term redemption date of Dec. 22, 2014, and dividends are set weekly to a fixed spread against the Securities Industry and Financial Markets Association Municipal Swap index, according to a press release by Pittsburgh-based investment manager Federated Investors, Inc.
As a result of the tender offers and preferred issues, each fund's leverage amount remains largely unchanged, and each fund maintains its current leveraged strategy, the release noted.
The tender offer, which ended at 5 p.m. ET on Dec. 20, was conditioned on the private placement of new preferred shares.
As previously noted, the funds accepted for payment 1,080 shares, or about 64.4%, of its series A auction market preferred shares, and Federated Premier Intermediate Municipal Income Fund accepted 737 shares, or about 50.4%, of the preferreds.
The tender offer price was 96% of the per-share liquidation preference of $25,000, or $24,000, plus accrued dividends through the expiration date.
The information agent is Deutsche Bank Trust Co. Americas (800 735-7777).
| Issuers: | Federated Premier Municipal Income Fund and Federated Premier Municipal Income Fund
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| Issue: | Variable-rate municipal term preferred shares
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| Amount: | $45.4 million
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| Maturity: | Dec. 22, 2014
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| Dividend: | Set weekly to a fixed spread against the Securities Industry and Financial Markets Association Municipal Swap index
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| Settlement date: | Dec. 22
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|
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| Municipal Income Fund
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| Amount: | $27.0 million
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| Shares: | 1,080 preferreds
|
|
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| Intermediate Municipal Income Fund
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| Amount: | $18.4 million
|
| Shares: | 737 preferreds
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