First Trust Municipal Income Term Fund to sell common shares

By Toni Weeks

San Luis Obispo, Calif., Jan. 29 - First Trust Municipal Income Term Fund said it will conduct an offering of its common shares, according to an N-2 filing with the Securities and Exchange Commission.

The newly organized, diversified, closed-end management investment company seeks to provide current income that is exempt from regular federal income tax, with an equal emphasis on long-term capital appreciation, and to return the original net asset value, before deducting offering costs, to holders of the fund's common shares on or about June 30, 2024, the termination date.

Under normal market conditions, it will invest at least 80% of its managed assets, including investment borrowings, in municipal debt securities and related investments that pay interest that is exempt from regular federal income tax. Managed assets means the average daily gross asset value of the fund, including assets attributable to the fund's leverage, if any, minus the sum of the fund's accrued dividends on any outstanding preferred shares of beneficial interest, if any, and accrued liabilities, other than debt representing leverage.

The fund may invest in municipal securities of any maturity and expects the weighted average maturity of its portfolio to initially be between seven and 15 years. The fund will also seek to maintain a diversified portfolio of securities that has an average weighted investment-grade credit quality.

Tom Futrell and Johnathan N. Wilhelm will be the portfolio managers.

The fund will list its shares on the New York Stock Exchange; the ticker symbol has not been set.

The company registered a token 1,000 shares at $20.00 apiece for a proposed maximum aggregate offering price of $20,000. There will be a 45-day greenshoe to cover over-allotments.

The sales load is expected to be 4.5%.

Wheaton, Ill.-based First Trust Advisors LP will serve as the investment adviser.

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