BlackRock Municipal Income Fund, Inc. (MUI) Announces Variable Rate Demand Preferred Shares Action

Rhea-AI Summary

BlackRock Municipal Income Fund, Inc. (NYSE: MUI) has announced its intention to redeem 3,763 Series W-7 Variable Rate Demand Preferred Shares on August 7, 2024. The redemption price will be equal to the liquidation preference of $100,000 per share, along with any accumulated and unpaid dividends up to the day before the redemption date. This action, announced by BlackRock Advisors, , represents a significant financial move for the Fund. The press release emphasizes that this announcement is neither an offer to sell nor a solicitation to buy any securities.

Positive

• Redemption of preferred shares may improve the Fund's capital structure
• Potential reduction in dividend obligations for the Fund

Negative

• Outflow of $376.3 million from the Fund's assets
• Possible decrease in leverage for the Fund

Insights

Financial Analyst

The announcement by BlackRock Municipal Income Fund, Inc. (MUI) to redeem a portion of its Variable Rate Demand Preferred Shares (VRDP) is a strategic financial move that warrants attention from investors. This action, involving the redemption of 3,763 Series W-7 VRDP shares, carries several implications:

• The total redemption value amounts to approximately $376.3 million, considering the $100,000 liquidation preference per share.
• This redemption may indicate the fund's intention to optimize its capital structure, potentially reducing leverage or preparing for a different financing arrangement.
• The timing of the redemption, set for August 7, 2024, gives current VRDP holders a significant notice period, allowing them to prepare for the upcoming change in their investment portfolio.

For MUI shareholders, this move could have mixed effects. On one hand, reducing VRDP shares might lower the fund's cost of capital if the shares are being replaced with lower-cost financing. On the other hand, if this represents a deleveraging effort, it could potentially impact the fund's income-generating capacity.

It's important for investors to monitor any subsequent announcements from BlackRock regarding potential replacement financing or changes in the fund's strategy. The impact on the fund's net asset value (NAV) and distribution rate should be closely watched in the coming months.

While this action doesn't necessarily signal a major shift in the fund's overall strategy, it does reflect active management of the fund's capital structure, which is generally a positive sign for long-term investors.

NEW YORK--(BUSINESS WIRE)-- BlackRock Advisors, LLC today announced BlackRock Municipal Income Fund, Inc. (NYSE: MUI, the “Fund”) intends to redeem 3,763 Series W-7 Variable Rate Demand Preferred Shares on August 7, 2024, at a redemption price equal to the liquidation preference of $100,000 per share, together with accumulated and unpaid dividends through the day prior to the redemption date.

This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities.

About BlackRock

BlackRock’s purpose is to help more and more people experience financial well-being. As a fiduciary to investors and a leading provider of financial technology, we help millions of people build savings that serve them throughout their lives by making investing easier and more affordable. For additional information on BlackRock, please visit www.blackrock.com/corporate

Availability of Fund Updates

BlackRock will update performance and certain other data for the Fund on a monthly basis on its website in the “Closed-end Funds” section of www.blackrock.com as well as certain other material information as necessary from time to time. Investors and others are advised to check the website for updated performance information and the release of other material information about the Fund. This reference to BlackRock’s website is intended to allow investors public access to information regarding the Fund and does not, and is not intended to, incorporate BlackRock’s website in this release.

Forward-Looking Statements

This press release, and other statements that BlackRock or the Fund may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to the Fund’s or BlackRock’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

BlackRock cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made, and BlackRock assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

With respect to the Fund, the following factors, among others, could cause actual events to differ materially from forward-looking statements or historical performance: (1) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets, which could result in changes in demand for the Fund or in the Fund’s net asset value; (2) the relative and absolute investment performance of the Fund and its investments; (3) the impact of increased competition; (4) the unfavorable resolution of any legal proceedings; (5) the extent and timing of any distributions or share repurchases; (6) the impact, extent and timing of technological changes; (7) the impact of legislative and regulatory actions and reforms, and regulatory, supervisory or enforcement actions of government agencies relating to the Fund or BlackRock, as applicable; (8) terrorist activities, international hostilities, health epidemics and/or pandemics and natural disasters, which may adversely affect the general economy, domestic and local financial and capital markets, specific industries or BlackRock; (9) BlackRock’s ability to attract and retain highly talented professionals; (10) the impact of BlackRock electing to provide support to its products from time to time; and (11) the impact of problems at other financial institutions or the failure or negative performance of products at other financial institutions.

Annual and Semi-Annual Reports and other regulatory filings of the Fund with the Securities and Exchange Commission (“SEC”) are accessible on the SEC's website at www.sec.gov and on BlackRock’s website at www.blackrock.com, and may discuss these or other factors that affect the Fund. The information contained on BlackRock’s website is not a part of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240724598214/en/

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Source: BlackRock Closed-End Funds

FAQ

What action is BlackRock Municipal Income Fund, Inc. (MUI) taking with its Variable Rate Demand Preferred Shares?

BlackRock Municipal Income Fund, Inc. (MUI) is redeeming 3,763 Series W-7 Variable Rate Demand Preferred Shares on August 7, 2024.

What is the redemption price for MUI's Variable Rate Demand Preferred Shares?

The redemption price is equal to the liquidation preference of $100,000 per share, plus accumulated and unpaid dividends through the day prior to the redemption date.

When will MUI redeem its Variable Rate Demand Preferred Shares?

MUI intends to redeem the Variable Rate Demand Preferred Shares on August 7, 2024.

How many Variable Rate Demand Preferred Shares is MUI redeeming?

MUI is redeeming 3,763 Series W-7 Variable Rate Demand Preferred Shares.