BNY Mellon Municipal Closed-End Fund Announces Proposed Reorganization With and Into a BNY Mellon Municipal Open-End Fund
BNY Municipal Income (DMF) announced a significant reorganization plan, merging with BNY AMT-Free Municipal Bond Fund, transitioning from a closed-end to an open-end fund structure. The reorganization, scheduled for June 20, 2025, requires stockholder approval at a special meeting on June 2, 2025.
This decision follows stockholders' approval of a non-binding proposal at the June 2024 Annual Meeting to consider measures allowing share monetization at or near net asset value. The Fund's NYSE-listed shares (DMF) will cease trading and be delisted around June 18, 2025.
Additionally, the Fund announced plans to redeem all 1,209 outstanding Variable Rate MuniFund Term Preferred Shares at $25,000 per share plus accumulated dividends, funded through portfolio securities sales. The Fund's dividend reinvestment plan will terminate on June 6, 2025, with the last eligible distribution record date around May 14, 2025.
BNY Municipal Income (DMF) ha annunciato un piano di riorganizzazione significativo, fondendosi con BNY AMT-Free Municipal Bond Fund, passando da una struttura di fondo chiuso a una di fondo aperto. La riorganizzazione, prevista per il 20 giugno 2025, richiede l'approvazione degli azionisti in un incontro speciale il 2 giugno 2025.
Questa decisione segue l'approvazione da parte degli azionisti di una proposta non vincolante durante l'Assemblea Annuale di giugno 2024, per considerare misure che consentano la monetizzazione delle azioni a o vicino al valore patrimoniale netto. Le azioni quotate in borsa del Fondo (DMF) cesseranno di essere scambiate e verranno delistate intorno al 18 giugno 2025.
Inoltre, il Fondo ha annunciato piani per il rimborso di tutte le 1.209 Azioni Preferenziali a Tasso Variabile MuniFund Term, a $25.000 per azione più dividendi accumulati, finanziati attraverso la vendita di titoli del portafoglio. Il piano di reinvestimento dei dividendi del Fondo terminerà il 6 giugno 2025, con l'ultima data di registrazione per la distribuzione idonea intorno al 14 maggio 2025.
BNY Municipal Income (DMF) anunció un plan de reorganización significativo, fusionándose con BNY AMT-Free Municipal Bond Fund, pasando de una estructura de fondo cerrado a una de fondo abierto. La reorganización, programada para el 20 de junio de 2025, requiere la aprobación de los accionistas en una reunión especial el 2 de junio de 2025.
Esta decisión sigue a la aprobación de los accionistas de una propuesta no vinculante en la Asamblea Anual de junio de 2024 para considerar medidas que permitan la monetización de acciones a o cerca del valor neto de los activos. Las acciones del Fondo cotizadas en la NYSE (DMF) dejarán de negociarse y serán deslistadas alrededor del 18 de junio de 2025.
Además, el Fondo anunció planes para redimir todas las 1.209 Acciones Preferentes de Tasa Variable MuniFund Term a $25,000 por acción más dividendos acumulados, financiados a través de la venta de valores de la cartera. El plan de reinversión de dividendos del Fondo finalizará el 6 de junio de 2025, con la última fecha de registro de distribución elegible alrededor del 14 de mayo de 2025.
BNY Municipal Income (DMF)는 BNY AMT-Free Municipal Bond Fund와 합병하여 폐쇄형 펀드 구조에서 개방형 펀드 구조로 전환하는 중대한 조직 개편 계획을 발표했습니다. 이 조직 개편은 2025년 6월 20일로 예정되어 있으며, 2025년 6월 2일 특별 회의에서 주주 승인을 요구합니다.
이 결정은 2024년 6월 연례 회의에서 주주들이 순자산 가치에 근접한 주식의 수익화 조치를 고려하는 비구속 제안에 대한 승인을 받은 후 이루어졌습니다. NYSE에 상장된 펀드의 주식(DMF)은 2025년 6월 18일경 거래가 중단되고 상장 폐지됩니다.
또한, 펀드는 모든 1,209개의 변동금리 MuniFund Term 우선주를 주당 $25,000 및 누적 배당금으로 상환할 계획을 발표했으며, 이는 포트폴리오 증권 판매를 통해 자금을 조달합니다. 펀드의 배당금 재투자 계획은 2025년 6월 6일에 종료되며, 마지막 적격 배당 기록일은 2025년 5월 14일경입니다.
BNY Municipal Income (DMF) a annoncé un plan de réorganisation significatif, fusionnant avec BNY AMT-Free Municipal Bond Fund, passant d'une structure de fonds fermé à une structure de fonds ouvert. La réorganisation, prévue pour le 20 juin 2025, nécessite l'approbation des actionnaires lors d'une assemblée spéciale le 2 juin 2025.
Cette décision fait suite à l'approbation par les actionnaires d'une proposition non contraignante lors de l'assemblée annuelle de juin 2024 pour envisager des mesures permettant la monétisation des actions à ou près de la valeur nette des actifs. Les actions du Fonds cotées à la NYSE (DMF) cesseront d'être négociées et seront radiées vers le 18 juin 2025.
De plus, le Fonds a annoncé des plans pour racheter toutes les 1.209 actions préférentielles à taux variable MuniFund Term à 25.000 $ par action plus les dividendes accumulés, financés par la vente de titres du portefeuille. Le plan de réinvestissement des dividendes du Fonds prendra fin le 6 juin 2025, la dernière date d'enregistrement pour la distribution éligible étant autour du 14 mai 2025.
BNY Municipal Income (DMF) hat einen bedeutenden Reorganisationsplan angekündigt, der die Fusion mit BNY AMT-Free Municipal Bond Fund umfasst und von einer geschlossenen zu einer offenen Fondsstruktur übergeht. Die Reorganisation, die für den 20. Juni 2025 geplant ist, erfordert die Genehmigung der Aktionäre bei einer außerordentlichen Hauptversammlung am 2. Juni 2025.
Diese Entscheidung folgt der Genehmigung durch die Aktionäre eines unverbindlichen Vorschlags bei der Jahreshauptversammlung im Juni 2024, Maßnahmen zur Monetarisierung von Anteilen zum oder nahe dem Nettovermögenswert zu prüfen. Die an der NYSE notierten Aktien des Fonds (DMF) werden etwa am 18. Juni 2025 den Handel einstellen und von der Börse genommen.
Darüber hinaus hat der Fonds Pläne angekündigt, alle 1.209 ausstehenden variablen MuniFund Term-Vorzugsaktien zu einem Preis von 25.000 USD pro Aktie zuzüglich aufgelaufener Dividenden zurückzukaufen, finanziert durch den Verkauf von Wertpapieren aus dem Portfolio. Der Dividendenreinvestitionsplan des Fonds endet am 6. Juni 2025, wobei das letzte Datum für die Berechnung der Anspruchsberechtigung für die Ausschüttung etwa am 14. Mai 2025 liegt.
- Stockholders gain ability to monetize shares at or near NAV through open-end fund structure
- Reorganization addresses stockholder proposal from June 2024 meeting
- Loss of NYSE listing and potential trading flexibility
- Forced redemption of preferred shares may impact fund's leverage strategy
- Termination of dividend reinvestment plan affects automatic reinvestment benefits
Insights
The proposed reorganization of BNY Mellon Municipal Income, Inc. (DMF) into an open-end fund structure represents a significant positive development for current shareholders who have been seeking greater liquidity at fair value. This transformation directly addresses the June 2024 stockholder-approved proposal requesting the Board to explore options for shareholders to "monetize" their shares at or close to net asset value - a common challenge with closed-end funds.
Closed-end funds like DMF frequently trade at persistent discounts to their NAV on exchanges, creating a valuation gap that frustrates shareholders. The current restructuring will eliminate this discount by converting shares into an open-end fund where investors can redeem directly at NAV. For context, DMF had a market cap of $147.4 million with shares trading at $7.07 as of the announcement date.
The fund's concurrent redemption of all Variable Rate MuniFund Term Preferred Shares demonstrates management's comprehensive approach to this transition, as these preferred shares would be incompatible with the open-end structure. Additionally, the termination of the dividend reinvestment plan is a necessary administrative step in preparation for the reorganization.
This action reflects an increasingly prevalent trend where closed-end fund boards are responding to shareholder activism aimed at addressing persistent NAV discounts. For DMF investors, this provides a clear exit strategy at fair value without the liquidity constraints inherent to closed-end structures, though they will lose the potential benefits of the closed-end structure including the ability to potentially purchase shares at a discount to NAV.
This reorganization represents a fundamental structural transformation with several strategic implications. Converting DMF from a closed-end to an open-end format creates an automatic arbitrage opportunity for existing shareholders, effectively closing any discount to NAV that may currently exist. While closed-end funds offer advantages including stable asset bases that allow for less liquid investments and potentially higher yields, they often suffer from persistent discounts that can range from 5-15% of intrinsic value.
The proposed June 2025 timeline gives current investors approximately 15 months to evaluate their options. Those seeking immediate liquidity might sell on the open market, while those prioritizing full NAV realization would benefit from waiting until the reorganization completes. The termination of the dividend reinvestment plan is a logical operational step since such programs are primarily designed to address closed-end fund mechanics.
The redemption of the VMTP preferred shares is particularly noteworthy as it highlights how the capital structure must be simplified before conversion. The fund will use proceeds from portfolio sales to finance this redemption, which could potentially impact the portfolio composition depending on which securities are liquidated.
From a governance perspective, this action demonstrates the Board's responsiveness to shareholder concerns and activism. The municipal bond fund space has seen increased conversion activity as persistent NAV discounts have attracted activist attention. For shareholders, while they gain guaranteed NAV access, they lose the distinctive benefits of closed-end structures including potentially higher yield profiles and the opportunity to purchase assets at discounts.
At the June 2024 Annual Stockholders Meeting of the Fund, Fund stockholders approved a non-binding proposal that the Fund's Board of Directors consider measures to allow stockholders to "monetize" their shares of the Fund's common stock at or close to net asset value. The Board of Directors of the Fund has determined that the proposed reorganization of the Fund with and into the Acquiring Fund is the best option in response to the stockholders' proposal.
The Fund's shares of common stock are listed on the New York Stock Exchange ("NYSE") under the symbol "DMF". If Fund stockholders approve the reorganization, the Fund's shares of common stock would stop trading on, and would be delisted from, the NYSE on or about June 18, 2025, and the reorganization of the Fund would occur on or about June 20, 2025.
Detailed information on the proposed reorganization will be contained in proxy materials expected to be filed with the
NOTICE OF INTENT TO REDEEM PREFERRED SHARES
The Fund has filed with the SEC a notice of intention to redeem all 1,209 issued and outstanding shares of the Fund's Variable Rate MuniFund Term Preferred Shares, designated as "Series 2023-1 Variable Rate MuniFund Term Preferred Shares," par value
The details of the redemption of all outstanding VMTP shares of the Fund are as follows:
Fund & Common Share Symbol |
Series |
Share
|
Preferred
|
Redemption
|
BNY Mellon Municipal Income, Inc. |
2023-1 |
1,209 |
05589T401 |
04/02/2025 |
(NYSE: DMF) |
The address of the redemption and paying agent of the VMTP shares, The Bank of New York Mellon, is 240 Greenwich Street,
The VMTP shares to be redeemed have not been registered under the Securities Act of 1933 or any state securities laws, and, unless so registered, may not be offered or sold in
TERMINATION OF DIVIDEND REINVESTMENT PLAN
The Fund has determined to terminate its dividend reinvestment plan (the "DRP"), effective June 6, 2025, pursuant to and in accordance with the terms of the DRP. As a result, the DRP will not be available for distributions by the Fund after June 6, 2025. The last distribution record date that will be eligible for participation in the DRP will be on or about May 14, 2025.
Important Information
BNY Mellon Investment Adviser, Inc., the investment adviser for the Fund and the Acquiring Fund, is part of BNY Investments. BNY Investments is one of the world's largest asset managers, with
BNY Investments is a division of BNY, which has
Closed-end funds generally are traded on the secondary market through one of the stock exchanges. The Fund's investment returns and principal values will fluctuate so that an investor's shares may be worth more or less than the original cost. Shares of closed-end funds may trade above (a premium) or below (a discount) the net asset value of the Fund's portfolio. There is no assurance that the Fund will achieve its investment objective.
This release is for informational purposes only and should not be considered as investment advice or a recommendation of any particular security. This release is not intended to, and shall not, constitute an offer to purchase or sell shares of any of the BNY Funds, including the Fund or the Acquiring Fund.
In connection with the proposed reorganization, a definitive prospectus/proxy statement will be filed with the SEC. All stockholders are advised to read the definitive prospectus/proxy statement in its entirety when it becomes available because it will contain important information regarding the Fund, the Acquiring Fund, the reorganization, the Board's considerations in recommending the reorganization, and the persons soliciting proxies in connection with the reorganization and the interests of these persons in the reorganization, as well as related matters. The definitive prospectus/proxy statement is expected to be mailed to Fund stockholders on or about April 28, 2025. Stockholders may obtain a free copy of the definitive prospectus/proxy statement (when available) and other documents filed by the Fund or the Acquiring Fund with the SEC, including the Fund's most recent annual report to stockholders, on the SEC's website at http://www.sec.gov, and copies of this information may be obtained, after paying a duplicating fee, by electronic request at the following e-mail address: publicinfo@sec.gov. Copies of these documents, once available, may be obtained without charge, upon request, by calling 1-800-373-9387 or by visiting www.bny.com/investments/closed-end-funds.html.
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For Press Inquiries:
BNY Mellon Investment Adviser, Inc.
Jessica Greaney
jessica.greaney@bny.com
For Other Inquiries:
BNY Mellon Securities Corporation
The National Marketing Desk
240 Greenwich Street
1-800-334-6899
Source: BNY Mellon Municipal Income, Inc.
FAQ
When will the BNY Municipal Income (DMF) reorganization with AMT-Free Municipal Bond Fund complete?
What happens to DMF shares after the reorganization approval?
How many VMTP shares will DMF redeem and at what price?
When does DMF's dividend reinvestment plan (DRP) terminate?
What is the record date for DMF stockholders to vote on the reorganization?
