Invesco Van Kampen to drop municipals insurance requirement, need for 'A' or better rating

By Toni Weeks

San Diego, Oct. 6 - Invesco Van Kampen Trust for Insured Municipals announced in a press release that its board of trustees will eliminate the non-fundamental requirement that it invests in municipal securities that are insured at the time of purchase by insurers whose claims-paying ability is rated "A" or better by at least one nationally recognized statistical rating organization.

Up till now, the fund's policy has been to invest at least 80% of its total assets in such funds during normal market conditions, but the supply of insured municipal securities has decreased dramatically, Invesco said.

Over the past few years, many municipal bond insurers have had their credit ratings downgraded, and only two insurers remain that are rated "A" or greater, of which one is insuring new municipal bonds. As a result, Invesco will eliminate the "A" rating requirement along with the overall insurance requirement, effective in January.

Along with its board, the company believes the changes will allow it to better manage the fund's portfolio in the best interest of shareholders and to meet the fund's investment objective.

In correlation with the policy change, the fund will change its name to Invesco Van Kampen Trust for Value Municipals.

Invesco clarified in the release that it is not changing its investment objective of seeking to provide common shareholders with a high level of current income exempt from federal income tax, consistent with preservation of capital, or its fundamental policy of investing at least 80% of its total assets in municipal securities.

Invesco is an independent investment management company based in Atlanta.

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