Eaton Vance Municipal Bond Fund Announces Final Results of Tender Offer

Rhea-AI Summary

Eaton Vance Municipal Bond Fund (EIM) has announced the final results of its cash tender offer. The Fund will purchase 2,846,127 common shares at $10.7664 per share (98% of NAV) from the 15,329,937 shares properly tendered, representing a pro-ration factor of 18.565785%. After the tender offer, the Fund will have 54,076,420 outstanding common shares.

Additionally, EIM announced a Second Conditional Tender Offer measurement period from March 10, 2025, through July 9, 2025. If during this period the Fund's shares trade at an average discount to NAV of more than 7.5%, the Fund will conduct another tender offer for up to 5% of outstanding shares at 98% of NAV within 20 business days of the trigger event.

Positive

• Fund committed to supporting share price through tender offers
• Second conditional tender offer mechanism provides additional shareholder value protection

Negative

• High oversubscription rate (18.57% acceptance) indicates strong selling pressure
• Trading discount to NAV suggests persistent market undervaluation

Insights

Financial Analyst

The completion of EIM's tender offer represents a significant capital markets event, with the fund purchasing 2,846,127 shares at $10.7664 per share, representing a 2% discount to NAV. The low pro-ration factor of 18.57% indicates strong shareholder interest, as the tender was significantly oversubscribed with over 15.3 million shares tendered versus the 2.85 million shares accepted.

The announcement of a potential second conditional tender offer starting March 10, 2025, introduces an important market mechanism. If the fund trades at an average discount exceeding 7.5% during the measurement period, it will trigger another tender for 5% of outstanding shares. This structural feature serves as a discount control mechanism, potentially supporting the fund's market price relative to its NAV.

For investors, the high oversubscription rate in the current tender offer suggests continued pressure on the fund's market price. The second conditional tender offer provides a partial backstop against excessive NAV discounts, though the 5% size limitation and potential pro-ration mean individual investors may receive only a small portion of tendered shares accepted.

BOSTON--(BUSINESS WIRE)-- Eaton Vance Municipal Bond Fund (NYSE American: EIM) (the “Fund”) announced today the final results of the Fund’s cash tender offer for the following amount of its outstanding common shares (the “Tender Offer”). The Tender Offer expired at 5:00 p.m. Eastern Time on January 10, 2025.

The final results of the Tender Offer based on a count by Equiniti Trust Company, LLC, the depositary for the Tender Offer, are provided in the table below.

Common Shares Offered to Purchase Pursuant to the Tender Offer	Common Shares Properly Tendered	Common Shares to be Purchased	Pro-Ration Factor*	Purchase Price**	Number of Outstanding Common Shares after Giving Effect to Tender Offer
2,846,127	15,329,937	2,846,127	18.565785%	$10.7664	54,076,420

* The number of common shares to be purchased divided by the number of common shares properly tendered. The pro-ration factor is subject to rounding adjustment to avoid the purchase of fractional shares.

** Equal to 98% of the relevant Fund’s net asset value (“NAV”) per share as of the close of regular trading on the New York Stock Exchange (NYSE) on January 10, 2025 (the date the Tender Offer expired).

Under the terms and conditions of the Tender Offer, if the number of common shares properly tendered exceeded the number of common shares offered to purchase, the Fund will purchase common shares properly tendered on a pro-rata basis (disregarding fractional shares). As indicated above, the Fund will purchase 18.565785% of the common shares properly tendered. The Fund will purchase the common shares accepted for payment as promptly as practicable.

The information agent for the Tender Offer is EQ Fund Solutions, LLC. Any questions with regard to the Tender Offer may be directed to the information agent toll-free at 1-877-732-3614.

In addition, EIM announced that, in connection with the recent close of the Fund’s Tender Offer on January 10, 2025, the Fund will commence a fourth-month measurement period, beginning March 10, 2025 through July 9, 2025, whereby if, during such period, the Fund’s common shares trade at an average discount to NAV of more than 7.5% (based upon the average of the difference between its volume-weighted average market price and NAV each business day during the period, as measured at the close of the period) (the “Second Trigger Event”), the Fund will conduct a tender offer (the “Second Conditional Tender Offer”) within 20 business days of the date on which the Second Trigger Event occurs. The Second Conditional Tender Offer will be for up to 5% of the Fund’s then-outstanding common shares at 98% of NAV per share as of the close of regular trading on the New York Stock Exchange on the date the tender offer expires.

If the conditions of the Second Trigger Event are met, then additional terms and conditions of the Second Conditional Tender Offer will be set forth in the Fund’s offering materials filed with the U.S. Securities and Exchange Commission (the “SEC”), which will be distributed to the Fund’s common shareholders, and in additional press releases, as applicable. If the number of common shares tendered in the Second Conditional Tender Offer exceeds the maximum amount of the Second Conditional Tender Offer, the Fund will purchase shares from tendering shareholders on a pro-rata basis (disregarding fractional common shares). Accordingly, there is no assurance that the Fund will purchase all of a shareholder’s common shares tendered in the Second Conditional Tender Offer. The Fund may determine not to accept shares tendered in the Second Conditional Tender Offer under various circumstances, as will be set forth in the offering materials. Further information about the Second Conditional Tender Offer will be announced in future press releases and the Fund’s offering materials.

About the Fund

Except for sales of shares pursuant to a tender offer, common shares of the Fund are available for purchase or sale only through secondary market trading at their current market price. Shares of closed-end funds (such as the Fund) often trade at a discount from their NAV. The market price of Fund shares may vary from NAV based on factors affecting the supply and demand for shares, such as Fund distribution rates relative to similar investments, investors’ expectations for future distribution changes, the clarity of the Fund’s investment strategy and future return expectations, and investors’ confidence in the underlying markets in which the Fund invests. Fund shares are subject to investment risk, including possible loss of principal invested. Fund shares are not FDIC-insured and are not deposits or other obligations of, or guaranteed by, any bank. The Fund is not a complete investment program and you may lose money investing in the Fund. An investment in the Fund may not be appropriate for all investors. Before investing in the Fund, prospective investors should consider carefully the Fund’s investment objective, strategies, risks, charges and expenses.

Eaton Vance is part of Morgan Stanley Investment Management, the asset management division of Morgan Stanley.

About Morgan Stanley Investment Management

Morgan Stanley Investment Management, together with its investment advisory affiliates, has more than 1,400 investment professionals around the world and $1.6 trillion in assets under management or supervision as of September 30, 2024. Morgan Stanley Investment Management strives to provide outstanding long-term investment performance, service, and a comprehensive suite of investment management solutions to a diverse client base, which includes governments, institutions, corporations and individuals worldwide. For further information about Morgan Stanley Investment Management, please visit www.morganstanley.com/im.

About Morgan Stanley

Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm's employees serve clients worldwide including corporations, governments, institutions and individuals. For more information about Morgan Stanley, please visit www.morganstanley.com.

Important Notice

This announcement is not a recommendation, an offer to purchase or a solicitation of an offer to sell shares of the Fund. The Tender Offer was made only by an offer to purchase, a related letter of transmittal and other documents filed with the SEC as exhibits to a tender offer statement on Schedule TO, with all such documents available on the SEC’s website at www.sec.gov. The Fund has also made available to shareholders without charge the offer to purchase and the letter of transmittal. Shareholders should read these documents carefully, as they contain important information about the Tender Offer.

This press release is for informational purposes only and is not intended to, and does not, constitute an offer to purchase or sell shares of the Fund. Additional information about the Fund, including performance and portfolio characteristic information, is available at eatonvance.com.

Statements in this press release that are not historical facts are “forward-looking statements” as defined by the U.S. securities laws. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to uncertainties and other factors which are, in some cases, beyond the Fund’s control and could cause actual results to differ materially from those set forth in the forward-looking statements. All forward-looking statements are as of the date of this release only; the Fund undertakes no obligation to update or review any forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250114697949/en/

Investor Contact: (800) 262-1122

Source: Eaton Vance Municipal Bond Fund

FAQ

What was the pro-ration factor for EIM's January 2025 tender offer?

The pro-ration factor was 18.565785%, meaning the Fund purchased 18.565785% of the common shares properly tendered by each participating shareholder.

How many shares will EIM purchase in the January 2025 tender offer?

EIM will purchase 2,846,127 common shares at $10.7664 per share.

What is the purchase price for EIM's January 2025 tender offer?

The purchase price is $10.7664 per share, which equals 98% of the Fund's NAV as of January 10, 2025.

What are the conditions for EIM's Second Conditional Tender Offer?

If EIM shares trade at an average discount to NAV of more than 7.5% during March 10-July 9, 2025, the Fund will conduct another tender offer for up to 5% of outstanding shares at 98% of NAV.

How many shares were tendered in EIM's January 2025 tender offer?

A total of 15,329,937 common shares were properly tendered in the offer.