Federated Hermes Premier Municipal Income Fund announces tender offer
Federated Hermes Premier Municipal Income Fund (NYSE: FMN) has announced plans for a cash tender offer for up to 32% of its outstanding common shares. The offer, set to commence on September 13, 2024, will allow shareholders to tender shares at 99% of the fund's NAV. This move aims to provide shareholders with a potentially better share price than market rates, while non-participating shareholders may benefit from the accretive impact on NAV. The fund will continue to operate as an exchange-listed closed-end fund, focusing on AMT-free tax-exempt income within a leveraged structure. The tender offer is part of an agreement with Saba Capital Management, L.P., which includes standstill covenants and voting commitments.
Il Federated Hermes Premier Municipal Income Fund (NYSE: FMN) ha annunciato piani per un offerta pubblica di acquisto in contante per fino al 32% delle sue azioni ordinarie in circolazione. L'offerta, che inizierà il 13 settembre 2024, permetterà agli azionisti di cedere le azioni a 99% del NAV del fondo. Questa mossa ha l'obiettivo di fornire agli azionisti un prezzo delle azioni potenzialmente migliore rispetto ai tassi di mercato, mentre gli azionisti non partecipanti potrebbero beneficiare dell'impatto accrescitivo sul NAV. Il fondo continuerà a operare come un fondo chiuso quotato in borsa, concentrandosi su entrate esenti da AMT all'interno di una struttura con leva. L'offerta di acquisto fa parte di un accordo con Saba Capital Management, L.P., che include clausole di stallo e impegni di voto.
El Federated Hermes Premier Municipal Income Fund (NYSE: FMN) ha anunciado planes para una oferta de recompra en efectivo de hasta el 32% de sus acciones comunes en circulación. La oferta, que comenzará el 13 de septiembre de 2024, permitirá a los accionistas ofrecer sus acciones a 99% del NAV del fondo. Este movimiento tiene como objetivo ofrecer a los accionistas un precio de acción potencialmente mejor que las tasas de mercado, mientras que los accionistas que no participen podrían beneficiarse del impacto acumulativo en el NAV. El fondo continuará funcionando como un fondo cerrado cotizado en bolsa, centrándose en ingresos exentos de AMT dentro de una estructura apalancada. La oferta de recompra es parte de un acuerdo con Saba Capital Management, L.P., que incluye cláusulas de congelación y compromisos de votación.
Federated Hermes Premier Municipal Income Fund (NYSE: FMN)는 현재 발행된 보통주 32%까지 현금 공개 매수 제안을 발표했습니다. 이번 제안은 2024년 9월 13일에 시작되며, 주주들은 펀드의 NAV의 99%로 주식을 매도할 수 있습니다. 이 조치는 주주들에게 시장 가격보다 나은 주가를 제공하려는 목적을 가지고 있으며, 비참여 주주들은 NAV에 긍정적인 영향을 받을 수 있습니다. 이 펀드는 여전히 상장 폐쇄형 펀드로 운영되며, AMT 면세 소득에 초점을 맞춰 레버리지 구조 내에서 활동할 것입니다. 매수 제안은 Saba Capital Management, L.P.와의 계약의 일환으로, 스탠드스틸 조항과 투표 의무를 포함합니다.
Le Federated Hermes Premier Municipal Income Fund (NYSE: FMN) a annoncé des plans pour une offre publique de rachat en espèces pouvant aller jusqu'à 32% de ses actions ordinaires en circulation. L'offre, qui commencera le 13 septembre 2024, permettra aux actionnaires de céder leurs actions à 99% de la valeur liquidative (NAV) du fonds. Ce mouvement vise à offrir aux actionnaires un prix d'action potentiellement meilleur que les tarifs du marché, tandis que les actionnaires ne participant pas pourraient bénéficier de l'impact cumulatif sur la NAV. Le fonds continuera à fonctionner comme un fonds fermé coté en bourse, se concentrant sur les revenus exonérés d'AMT au sein d'une structure à effet de levier. L'offre de rachat fait partie d'un accord avec Saba Capital Management, L.P., qui comprend des clauses de gel et des engagements de vote.
Der Federated Hermes Premier Municipal Income Fund (NYSE: FMN) hat Pläne für ein Barangebot für bis zu 32% seiner ausstehenden Stammaktien angekündigt. Das Angebot, das am 13. September 2024 beginnen soll, ermöglicht es den Aktionären, Aktien zu 99% des NAV des Fonds anzubieten. Dieser Schritt zielt darauf ab, den Aktionären einen potenziell besseren Aktienkurs als die Marktpreise zu bieten, während nicht teilnehmende Aktionäre möglicherweise von der akkumulierenden Wirkung auf den NAV profitieren können. Der Fonds wird weiterhin als börsennotierter geschlossener Fonds tätig sein, mit einem Fokus auf AMT-freien steuerbefreiten Erträgen innerhalb einer Hebelstruktur. Das Angebot ist Teil einer Vereinbarung mit Saba Capital Management, L.P., die Standstill-Vereinbarungen und Abstimmungspflichten umfasst.
- Potential for shareholders to receive better share price than market rates
- Anticipated accretive impact on NAV for non-participating shareholders
- Commitment to maintain total annual fund operating expenses at no greater than 0.99%
- Agreement with Saba Capital Management, potentially reducing activist pressure
- Reduction in fund size by up to 32% of outstanding common shares
- Potential for pro-rata allocation if tender offer is oversubscribed, limiting full participation
Insights
This tender offer by Federated Hermes Premier Municipal Income Fund (FMN) is a strategic move that could benefit both tendering and non-tendering shareholders. For those who tender, it offers a premium exit opportunity at
The
Investors should note the fund's commitment to maintaining its expense ratio cap at
The tender offer announcement is structured to comply with SEC regulations, particularly the Securities Exchange Act of 1934 and the Investment Company Act of 1940. The fund's commitment to future public announcements and shareholder notifications aligns with legal requirements for transparency in such transactions.
The standstill agreement with Saba Capital is a notable legal development, potentially mitigating governance conflicts. However, investors should scrutinize the full terms when disclosed, as such agreements can impact shareholder rights and fund governance.
The pro-rata mechanism for oversubscribed tenders ensures equitable treatment of shareholders, a key regulatory consideration. Overall, the announcement demonstrates careful legal structuring to balance regulatory compliance with strategic objectives.
Should the number of common shares properly tendered, and not withdrawn, exceed
Those common shareholders who choose to tender their shares can potentially receive a better share price than they might receive in the market. Common shareholders who choose not to tender their shares will benefit from the anticipated accretive impact on the NAV of the common shares due to the tender price being below NAV. The fund also will continue to operate as an exchange-listed closed-end fund—providing long-term shareholders the ability to pursue AMT-free tax-exempt income within a leveraged structure, with the opportunity for enhanced returns.
Absent an unknown material event occurring, the fund's investment advisor does not anticipate that the tender offer will affect the fund's ability to continue to maintain its total annual fund operating expenses at no greater than
The fund's investment advisor recommended the tender offer in connection with entering into an agreement with Saba Capital Management, L.P. ("Saba"). During the effective period of the agreement, Saba has agreed to comply with certain standstill covenants and vote its shares in accordance with the recommendations of the fund's Board of Trustees.
Tender Offer Statement
The fund has not commenced the tender offer described in this press release. This is not a recommendation, an offer to purchase or a solicitation of an offer to sell common shares of the fund and the above statements are not intended to constitute an offer to participate in any tender offer. Information about the tender offer, including its commencement, will be provided by future public announcements. Shareholders will be notified in accordance with the requirements of the Securities Exchange Act of 1934, as amended, and the Investment Company Act of 1940, as amended, either by publication or mailing or both. The tender offer will be made only by an offer to purchase, a related letter of transmittal, and other documents to be filed with the SEC. Shareholders of the fund should read the offer to purchase and tender offer statement and related exhibits when those documents are filed and become available, as they will contain important information about the tender offer. These and other filed documents will be available to investors for free both at the website of the SEC and from the fund.
Investors can view additional portfolio fund and portfolio information in the Products section of FederatedHermes.com/us.
Federated Hermes, Inc. (NYSE: FHI) is a global leader in active, responsible investment management, with
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Certain statements in this press release, such as those related to expenses, the commencement and expiration of the tender offer, performance, investment objectives and strategies, and investor preferences and demand, constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the fund to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Any forward-looking statement, and any level of business activity and financial results, are inherently subject to significant business, market, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond the fund's or its investment adviser's control. Risks and uncertainties could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the fund's annual and semi-annual shareholder reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and none of the fund, its investment adviser, or any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.
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SOURCE Federated Premier Municipal Income Fund
FAQ
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