Mainstay plans Defined Term Intermediate Duration Municipal Bond Fund

By Toni Weeks

San Luis Obispo, Calif., Feb. 6 - The Mainstay Defined Term Intermediate Duration Municipal Bond Fund registered its common shares in an N-2 filing with the Securities and Exchange Commission.

The newly organized, diversified, closed-end management investment company seeks current income exempt from regular U.S. federal income taxes but possibly includable in taxable income for purposes of the federal alternative minimum tax. Total return is the secondary objective of the fund, which will have a roughly 12-year limited term.

Under normal market conditions, the fund will invest at least 80% of its managed assets in municipal bonds and will maintain a portfolio with an intermediate duration ranging from three to 10 years to seek to mitigate the risk of rising interest rates.

Robert DiMella and John Loffredo will lead the portfolio management team.

The fund registered a token 1,000 shares with additional shares for an over-allotment option. The terms, including the public offering price, sales load, management fees and annual operating expenses, have not yet been determined. In addition, the underwriters have not yet been named.

Parsippany, N.J.-based New York Life Investment Management LLC will serve as the investment adviser. MacKay Shields LLC, the subadviser, will provide day-to-day management of the portfolio.

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