Federated muni funds wrap private preferreds sale to fund tender offer

By Susanna Moon

Chicago, Dec. 22 - 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 the auction market preferred shares.

The tender offer was conditioned on the private placement of new preferred shares.

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 previous release by Pittsburgh-based investment manager Federated Investors, Inc.

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 offers expired at 5 p.m. ET on Dec. 20. They began on Nov. 9.

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 new preferreds will allow each fund to maintain its current leveraged investment strategy, Federated Investors said in a previous release.

The information agent is Deutsche Bank Trust Co. Americas (800 735-7777).

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